My Interview With We Study Markets
I sat down for an extended interview
I recently took some time and sat down for an interview with Matthew Gutierrez from We Study Markets.
I don’t do a lot of media or interviews, but decided to take the time and talk with Matthew. It was an enjoyable and wide ranging conversation about Spilled Coffee, investing, my book and my time as a firefighter. He did a fantastic job and I hope you enjoy it.
Be sure to check out We Study Markets and subscribe to their newsletter as they have some outstanding content on markets and investing, as well as some great interviews.
Here is a link to the full article and below that is a clip of the interview.
Two Way Street: Life and Investing with Eric Soda
A big regret of many elite investors? Selling their best-performing stocks too early.
The same holds for Eric Soda, an author, entrepreneur, and individual investor in Wisconsin who owns a large insurance agency. It was 2008, sometime during the financial crisis, when Soda made his first major investment mistake. He had done the hard work, buying Microsoft during days of panic, but he sold his entire position after he doubled his money.
The experience was painful — Microsoft has trounced the S&P 500 since then, compounding at nearly 30% annually — but Soda says he learned an invaluable lesson that has become the cornerstone of his investment philosophy: often, doing nothing is the best decision. Let winners ride.
“It was a big mistake,” Soda recalls. “I should still have those initial shares. Obviously, it took some luck, but I think the discipline I learned from my Microsoft goof-up has helped me immensely. I’m glad it happened because I was still young, and it’s helped me. That’s why starting early and maintaining a long-term view is so powerful.”
Soda says he’s applied the lesson to his steadfast conviction behind stocks like Apple and Nvidia, which he’s held for years as they keep climbing higher. Below, Soda also shares his journey from self-taught investor and entrepreneur — he never graduated college — to other life lessons, including his days as a firefighter. This interview has been edited lightly for brevity and clarity.
To start, tell us when you first became interested in investing. What drew you in?
At 17, the whole industry wowed me. I read the WSJ and Barrons in paper form because there wasn’t much on the internet. I just started reading and self-educating, because I never went to college. I started my insurance business and taught myself how to run it.
After high school, while building your insurance business, you were also a paid-on-call firefighter who fought fires and pulled people out of car wrecks.
It was one of the highlights of my life. I think about doing that and the things I saw and did every day. It gives you a perspective that you can’t get any other way. I always wanted to be a firefighter — two of my grandparents, my dad, and two of my uncles all were once firefighters. I was always fascinated by it. It’s an eye-opening experience with adrenaline. Going into a burning building? Nothing ever comes close to that.
Tell us about your growing newsletter, Spilled Coffee — including why you launched it — and its mission.
Like many people, I reflected on life during the pandemic: What am I doing? What do I want? Where am I going? I wrote my book during the pandemic and thought about how investing in businesses has been my love since I was a teenager. I wanted to relay what I’ve learned to other individual investors. I wanted to create something that would benefit my 17-year-old self.
Wednesday’s newsletter is business-related or personal, while on Saturday, I do an investing update into my core principles, data, charts, research, and what I’m noticing. I don’t manage money for anyone other than myself, and I don’t work for a research firm, so I can share what I see.
Why did you write your book, Two-Way Street?
I wanted to pass something on and share my knowledge with others. I did a lot of public talks about my path, and this was a way to be sure what I wanted to say could be shared—not just about business but also the life side of it. Many only cared or asked about the business side. The balance is the key. Having both is vital, allowing you to be successful in business and life.
People would ask me how I built my insurance agency. What’s the secret sauce? So I wrote to relay everything I know in book form, where I can be precise with the language and message.
Let’s talk investing: What are some of your core holdings?
My two biggest positions are Apple and Nvidia. I bought Apple in 2014 for around $20 per share, split-adjusted. So when I bought Apple in 2014, I applied what I had learned from the Microsoft mistake and didn’t sell it after it doubled, then doubled again. I still own it and have let Apple keep running.
I bought Nvidia in 2022 and haven’t sold any shares. I’m just going to let it run. I believe Apple and Nvidia are among the best stocks we’ve seen in our lifetime.
You bought Apple in 2014, about two years before Berkshire Hathaway and Warren Buffett.
Well, he had a lot more zeroes on his buys. Look, it’s a great company. But there will eventually be another “Magnificent 7,” and the question is always, who will it be? I think two of the names I own will be a part of it: Crowdstrike and Uber. The other five? I haven’t figured that out. That’s the fun part; that’s the challenge.
Nvidia was cut in half in 2022. What made you interested in owning it then?
The 2022 drawdown was pretty steep, and I kept buying more as it went down. At one point, I got tired of getting cut by a falling knife, so I stopped buying shares, but I waited and waited. It’s set more all-time highs within the last week or so.
Nvidia rose a lot in 2020 and 2021 amid the gaming revolution; more recently, it’s been artificial intelligence. I think they’re a step ahead of everybody in AI, and until that story changes, that’s my core thesis.
If you look at certain metrics, it’s arguably no more expensive than it was a couple of years ago.
Some investors compare it to Cisco, which surged in the 1990s and then cratered. It’s not even close to that, in my view. I think people who call Nvidia the next Cisco are the same people who think we’re in a recession.
How would you describe your investment research and decision-making process?
It starts with reading a lot of books, looking at a lot of charts and data, and just learning as much as I can. I usually hold between eight and 12 stocks, so I am highly convinced.
I looked at buying Lululemon, but I don’t own it. For that stock, I visited a Lululemon store and talked to the employees and managers to get a pulse of what was happening. That’s where I saw things weren’t trending in the right direction. I think the boots-on-the-ground stuff can help.
Years ago, I visited Apple stores to get a pulse. Home Depot, too. Sometimes, employees will tell you what they’re seeing, whether they’re hiring, how busy they are, etc. That’s been extremely helpful to me. It’s not the only thing you should do, but it’s part of the process. The telltale sign is often: Are they busy?
You like to own between eight and 12 stocks. What’s your ideal time horizon?
I like to buy companies that will increase by at least 100%. I ask: Does this stock have the ability to double? But for the most part, I try to hold businesses as long as possible unless the story changes. With Apple and Nvidia, I don’t think they’ll go up forever, but until their fundamentals change, I’m holding. For instance, people have been saying Apple’s best days are behind it for the past five or 10 years, yet it keeps going.
What books have resonated with you?
Hell Yeah or No by Derek Sivers
One Up on Wall Street by Peter Lynch
Your piece “50 Awesome Things” was a nice reminder to enjoy the rewards of our life and investing. Why did you write that?
Many good things happen daily that we don’t even think about. It’s easy to get caught up in the bad or the noise. People replied to me, noting which pieces resonated most: coffee, seeing a friend in person for the first time in a while, laughing so hard that you cry, and witnessing pure joy on my kids’ faces.
What is one of the kindest things someone has done for you?
I have a friend who knows I’m a huge Buffalo Bills fan. When they were replacing the turf at the Bills stadium, he got a 1’x1’ piece in a memorabilia case and sent it to me. It hangs in my office next to my signed Jim Kelly jersey. It was a very cool gesture of friendship.
Anything else you’d like to share or add?
Invest how you want to invest. Not how someone on TV does or how a book tells you to. Buy what you want to buy. Sell when you want and to sell. If you don’t want to sell, then don’t sell. Let your winners ride.
Treat yourself. Celebrate accomplishments and successes. I go for breakfast every Wednesday morning at my favorite breakfast place to publish my Wednesday piece. I take my family out for dinner on Saturday to publish my Saturday piece. It holds me accountable. For other big wins, celebrations, or sales, take the time to celebrate with your family.
Dive deeper
For more, check out Eric’s investing newsletter, Spilled Coffee, for his insights and ideas on business and investing, or read his book, Two-Way Street.
Be sure to check out We Study Markets and the full piece link below.
🎙️ Two-Way Street Plus: Investor Eric Soda on conviction, Nvidia, and more
The Coffee Table ☕
I wanted to share a reminder for long-term investors with the election less than a week away. Remember that regardless which party wins, the election results have zero bearing on the stock market and economy over the long-term. I recently wrote about this. Don’t Mix Politics and Investing.
Another step was taken this week towards 24 hour equity trading. The NYSE announced that it would extend trading on its all electronic exchange to 22 hours a day. It won’t be long until you’ll be able to buy and sell stocks 24 hours a day, seven days a week like you can cryptocurrencies. Like it or not, it’s coming. New York Stock Exchange to extend after-hours trading
This week I came across a mind-boggling stat. Since its inception, Home Depot is up 1,320,686%. Apple is up 181,648% and Nvidia is up 322,585 from their inception dates. Home Depot has been a compounding monster.
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