Yesterday, I visited the 1,000 year-old Khmer temples just outside of Siem Reap, Cambodia. I had seen these magnificent structures more than 20 years ago when I first visited. The Ta Prohm Buddhist temple became famous after being featured in one of the Tomb Raider films. I’ve played through several of the games and it’s incredible how well the development team at Eidos captured the feel of exploring these ancient structures.

 

For me, the highlight of visiting Siem Reap is Angkor Wat. It’s so iconic that it’s featured on the Cambodian flag. The structure is enormous. It’s ringed by a lake and rises steeply over multiple giant levels. The landscaping alone would be a huge accomplishment today. I can’t imagine the labor involved in creating these levels without an internal combustion engine. The stone walls are carved everywhere and there are 160-foot-long stone carvings depicting fights between armies and Gods. I remember going the first time and being awed by the size of the structure.

 

Yet, this time, I was shocked when after a “short” climb, I found myself staring at the stairs which led to the highest level. What happened? How could something so large and physically challenging become a quick easy walk? Angkor Wat couldn’t have changed. How had my perceptions of the place been so different across 20 years?

 

As I thought about it, I realized something had changed. Obviously, Angkor Wat was the same height it had been since completion, but in recent years, Cambodia added wooden stairs that sit above the steep crumbling stone steps. When I first visited in the early 2000s, the stairs were dangerous. In the best sections they were steep and narrower than the length of my foot. In most sections, they were uneven and collapsing. The climb up was challenging. The climb down was perilous. Despite being an experienced marathoner in my early 30s, I still chose to traverse the way down on my butt. The risk of a catastrophic fall was real.

 

The new even wooden stairs that sit on top of the old stone ones don’t change the height of the climb, but they do reduce the effort. In my case, the reduced effort changed my immediate perception of the size of Angkor Wat from immense to merely large.

 

This caused me to start thinking about where my perceptions in the investing world had changed. One answer immediately came to mind. Before 2020, I had never owned gold or silver. I just didn’t see the point. There were people in the weird corners of the financial world who owned and analyzed such things, but I wasn’t really sure what to do with a yellow rock that doesn’t produce a yield; especially when there were interesting high-growth or special-situations stocks to discover.

 

Then, Congress and a big-spending White House decided to make the fever dreams of helicopter Ben Bernanke real and began spraying newly created dollars into the economy. Trillions of dollars of fiat currency units were created with zero additional production of goods and services. Much of that money was stolen via fraud through corporations while a scared population were placated with $1,200 stimulus checks. In exchange for the quick hit of those “stimmies”, everyone got a permanently higher cost of living. That money wasn’t free and that cost was borne more heavily by the poor people who are more affected by inflation than the wealthy.

 

For me, watching the government create $6T of additional currency was like adding stairs to the top of Angkor Wat. All of a sudden, the intellectual journey to understand the value of sound money became easier. DKI bought gold at $1,500, silver at $25, and Bitcoin at $15k. I had never owned any of those assets before. It’s all worked because Congress hasn’t stopped debasing the currency. They won’t stop either. We can vote for team red or team blue, but all fiat fails. All fiat goes to zero. It took epic levels of money printing for me to begin to see how fragile our currency is.

 

My approach wasn’t the only right one. People who just bought the NASDAQ ($QQQ) did well. People who bought $NVDA or some combination of the magnificent seven did fantastic. There was more than one way to win. Along the way, DKI has had multiple multi-baggers (and a couple of losers).

 

As you look at the investment landscape, I think it’s worthwhile to seek out situations where the stairs are being built. Find the places where the world is changing and becoming easier or harder. Most importantly, find the opportunities where your understanding of an asset shifts. If possible, notice that shift and figure out why something feels different. In life, taking the hard stairs is usually worthwhile. In investing, finding the places where things got easy is often the place to search.

 

 

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