In this episode of The My First Million podcast, host Sam Parr interviews a guest (Speaker B) who shares two major missed investment opportunities and one successful trade. The guest recounts how he almost wrote a $25,000 angel check into a SaaS platform that helps international students apply to U.S. universities; the company later reached a billion‑dollar valuation, meaning his missed stake would now be worth roughly $5 million. He also missed an early investment in Calm. During the COVID‑19 pandemic he attempted a speculative put option on MGM Resorts, losing $2,000 after misunderstanding the trade’s mechanics. To recoup, he placed a large Bitcoin purchase when the price fell to $4,500, which later recovered, offsetting the loss. The conversation shifts to market dynamics, with the guest explaining the Keynesian beauty‑contest analogy and describing short‑term markets as a popularity contest versus a long‑term weighing machine. He reflects on his personal investing philosophy—recognizing bankroll limits, the importance of diversification, and the emotional impact of both bad and good outcomes—while expressing frustration with speculative valuation bubbles in private‑company fundraising.
Chapters
What happened when you lost $5 million?
Yeah, which one? You look at the list, tell me which one you want to do.
What happened when you lost $5 million?
All right, I didn't exactly lose $5 million, but I did not make the $5 million that I could have made. All right, so this is called Sean's Shitty Investments. This is a new segment we created just now, and I'll tell you about 2 bad investments and 1 good investment I made. So I was talking to a friend of mine, a guy who had been— I had been advising this guy about his startup. This is maybe 4 or 5 years ago. I've been advising him. He didn't live in America. He was building a product for international— his product was around international students applying to U.S. universities. And making it easy. If you don't know, if you live overseas, like I finished high school in China, so I saw this firsthand. If you're in China, you're in India, you're in Malaysia, the goal, like your life goal, is to go to a U.S. university. Doesn't even matter if it's a good one, but it's to go to a U.S. university. And U.S. universities overcharge for that.
And they get in trouble for that too sometimes.
Yeah, actually right now there's a bunch of stuff in the news because they charge like 3 times more for international students.
Yeah, but just so you know, the state is in trouble because they have like 60% Chinese nationals there and they're like, right, what the fuck, you guys are charging $60 grand for these kids.
Exactly. So anyways, I was helping this guy, great founder, really liked the company, was really interested, but I was at a point at that time financially where I was like, okay, if I'm investing in startups, that's a pretty irresponsible investment because, you know, when you invest in startups, high likelihood of failure. So you need to place like 25, 30 bets And so if you say, okay, I'm gonna place, you know, 25, 30 bets and each bet's gonna be $25 grand. Like, I'm basically, I need to have $500,000, I need to have $750,000 that I'm gonna put into this, which means that can't be like your whole net worth, which is like my, this would, that would have been more, $750 grand at that time would have been more than my whole net worth. And so I knew I didn't have the sort of bankroll to do it. But that was an excuse. I could have found a way. I could have wrote the check anyways. I could have banked on myself making more in the future like I did. And bottom line is I didn't. So I would have been the first check into this guy's company, and my sort of $25,000 check, which I was very, very close to writing, would have become a $5 million stake in this guy's business by now.
Wait, how— wait, what's the name of the company?
Um, I don't know if I should say the name.
And how big is it now?
I'll just tell you the name, we'll bleep it out. So it's called— and, um So he told me that they just crossed, you know, the billion-dollar valuation. And so I don't know if they're exactly at that, I don't know if they're a little over, a little under, but the point is they're doing well. And so yeah, I was kicking myself because that would have been a big investment. This has happened to me now two different times where I could have been one of the angel checks into a business, I thought it was a good business, I didn't pull the trigger, And those two would have combined to be worth $10 million plus by now.
What was the other one, Calm?
Yeah.
So this company, this studying abroad company, do they make a lot of revenue or is it just—
Yeah, revenue. And even then, they were pre-revenue at the time, but I was doing the math and I was like, wait, they had an LOI signed by a bunch of universities. And I was like, wait, so if they just match supply and demand. Like, this thing's gonna make money. Didn't have enough conviction.
And is it just a lead gen site?
No, no, it's a full software tool that actually does the application for the student, uh, blah, blah, blah.
The university pays money? Oh, so it's a SaaS company.
It's a free SaaS tool for the user, and then it's a lead gen on the other side where when a kid gets accepted, they get paid that way.
Got it. And they charge the university's money?
Yeah. Like thousands of dollars per student.
Got it. So, okay, so they don't charge the money for the software?
No, the software is used by the actual student, the end customer. Um, so anyways, it was a— it's a great business, big miss on my part. Happy for the guy though, he's an awesome guy, and I really, uh, I like this guy's energy a lot.
I—
you kind of— sometimes you meet people who got— who just have good energy. I don't know how to describe it, but he was one of those people.
So, and you lost again on MGM?
Uh, so no, not again. So basically, I haven't talked about this on the podcast, but I, uh, during COVID I decided to mess around with option trading, which, you know, famous last words. And, uh, so I was literally— this is how dumb I am, right? So, uh, so I don't play in the finance, the public markets that much. I just do very simple things. I just buy companies I think are good for the next 10 years, or I buy index funds. Um, I don't do a whole— I don't do like I don't do leverage buying, I don't do shorts. But I was like, you know what, I don't see any way that MGM, which is MGM Resorts, I was like, I don't see any way that their business doesn't go down with this COVID thing. And so I was thinking about it, and it got cut by like 75%. So the stock price dropped from, I don't know, it was like 25, dropped from 30 down to like 12. and I was like, "Yeah, I still think that this thing is gonna go down." And so I'm literally on one tab, I have like a Khan Academy video of like, "What the hell is a put?" And on the other hand, I've got my Robinhood account and I'm like just pushing buttons. And so I pushed a bunch of buttons and I placed this trade, which basically said, "Okay, I think MGM is gonna go down." And I bought $2,000 worth of options and like, "Let's see what happens." And it turned out MGM did go down, but I needed it to— once I understood my own trade, which was like after I placed it, I was again just pushing buttons. When I was looking at the confirmation, I was like, oh shit, this is a horrible trade. Like, I just basically said that this is gonna go down 40% in the next 7 days. I was like, what is that?
How much did you lose?
$2,000. So I was like, what a stupid bet. So that's my bad— the 2 bad investments that I want to share. On the other side, I bet really big into Bitcoin when it dropped to like 4,500 recently, and now it's back up. So that one made back the money from— for my shitty option trade in Spain.
I completely stay away from stocks. I only buy S&P 500 or Facebook stock. And about 2 weeks ago when it was at the bottom, I was like—
Facebook?
I was like, well, no, when the whole market was real low, like the lowest point, maybe 10 or 2 weeks ago, I sold most everything. And I was like, I was like, I think it's just going to get worse and worse and worse because unemployment and unemployment comes out and it's the highest it's ever been. And, or the unemployment work claims. And then the stock market goes up 20%. I like, I just don't understand how this, I don't understand how this works at all. Because, and then I applied for the loan for, for the Trump enacted. And I'm like, so you're telling me we get free money? That sounds great. But when you start thinking about it, you're like, I'm gonna pay for this eventually. Like, somehow I'm— there's no such thing as free, or we're gonna pay for it eventually. And so this money, it's just— this whole situation, it doesn't make sense to me because the stock market should be going down.
Yes, it will. This is a— this is a sort of a dead cat bounce, or like sort of a false rally. But forgetting— forgetting the market right now because I don't know shit about it, and who also— who cares? Not that interesting. It's a speculator's game. Um, the there's a phrase I learned that I thought was pretty cool. It's called a Keynesian beauty contest. You know what a Keynesian beauty contest is? Okay, so have you ever heard of that sort of economist, uh, I've got his full name, like Maynard, John Maynard Keynes or whatever. Um, anyways, he's a famous guy in the world of economics, Keynesian economics. And a Keynesian beauty contest describes this phenomenon where, let's say there's a— what you think the stock market should be is here's an asset, here's a company, You could buy some of their stock and you buy it if you think that the company is going to become more valuable than it's priced at today. That's what we think should be happening. But what's actually happening is this is a speculator market, right? It's a speculation-driven market. And so you don't— in a short time horizon, you don't— you're not betting that the company is going to improve and actually generate more revenue and whatnot. You're just betting that other people are going to think this is more attractive. But they're also betting that other people are gonna think it's more attractive. So it's a Keynesian beauty contest, is where you're not actually judging the beauty of it, you are thinking what the other judges would think about this thing, and they're thinking about what the other judges would think about this thing, and it becomes this sort of speculative loop. And that's my sort of Wikipedia page of the week.
That's exactly how things are working, and it just annoys me so much. You have so much more control over your life when you actually run the business.
Right. And there's also a great phrase, which is sort of, in the short term, the stock market is a popularity contest, and in the long term, it's a weighing machine. And I think that really describes it well, right? So like, this is also for private companies as well. And when you're, when you're raising a Series A and you're a hyped company, it's a popularity contest. And when people are like, how did this valuation— that doesn't make any sense. It's like, yeah, it makes sense if you, if you understand that this is currently a popularity contest, but over the long haul It does not remain a popularity contest. It becomes a weighing machine. And if you're full of air and there's nothing there, like, your value will go down. And so for all those people who don't understand those valuations, uh, that's why it's frustrating.
I'm just— so I don't, I don't do anything in that world because it's just not— I, I don't know anything about it and I don't want to know. Like, it makes me too angry.
