Sam breaks down Ryan Cohen’s career arc — founding Chewy.com, selling it for billions, concentrating his personal wealth into Apple and Wells Fargo, then buying 10% of GameStop and turning $76M into $1.1B. Sam and Shaan riff on Cohen’s just-announced 10% stake in Bed Bath and Beyond, debate the “Tai Lopez playbook” of buying distressed retailers, and get into a candid conversation about their own portfolios, dry powder, and the psychology of holding through a down market.
Speakers: Sam Parr (host), Shaan Puri (host)
Ryan Cohen and the Chewy Origin Story [00:00:00]
Sam: Shaan, you and I were sent something from our friend Jack. I’ll fill you in.
There’s this guy named Ryan Cohen. Ryan Cohen started Chewy.com, which is basically Amazon for pet stuff. He started it when he was young — I think he was in his early 20s — and he was aggressive. He raised a ton of money, started out of Florida, so he was very much an individual thinker. Like, “No, we’re not doing Silicon Valley. We’re doing this out of Florida.” He raised like a billion dollars, a huge sum. Ended up selling it for three, four, five, six billion — I don’t know the exact amount. Then it goes public, worth many billions.
But after doing that, he made around $600 million. And after he made that money, there was an article written where he basically says, “I put all of my money into two stocks — Apple and Wells Fargo.” He put like all of it in there. And since that article went live, the money he put in there has gone up 361%.
Then about a year and a half ago, he noticed a brand he loved that wasn’t doing so well. He thought, “These guys could totally revolutionize the game, but they’re getting crushed right now. I’m going to buy 10% of the company.” He did it for $76 million. And that company was GameStop.
When he bought GameStop, that’s when the whole meme stock thing went down — because everyone was like, “Ryan Cohen bought it.” And it worked. He turned the company around, or at least it’s in the process of being turned around. His $76 million turned into $1.1 billion. He currently still owns like 13% of the company and is on their board of directors.
Now, just this morning, it was announced that he bought 10% of Bed Bath and Beyond. He’s doing the same thing. And this guy is a madman. I’m almost positive he’s still only 34 or 35 years old. I also researched on LinkedIn — I’m almost positive it’s just him. Like, he doesn’t have an employee. Maybe an assistant, but it’s basically just him searching around for stuff. This man is crazy and I love him.
GameStop, Bed Bath and Beyond, and the Distressed Retail Playbook [00:05:00]
Shaan: I feel like there should be a ticker for stocks that aren’t small but have fallen 80-plus percent from their highs. Like, “What crazy operators want to come in here and totally turn this thing around?” I feel like you could also have a podcast about that — you find a stock like Bed Bath and Beyond, its highs were at $80, it’s now at what, like six dollars before this announcement, and you ask: what would you do if you were operating this business? Have people come on and battle it out Jeopardy-style and see who comes out with the best strategy.
Sam: That’s kind of cool.
Shaan: Right now there are a whole bunch of growth stocks that are down somewhere between 50 and 80% from their all-time high. Zoom and a bunch of others. There’s that one Buffett phrase: “Be greedy when others are fearful and fearful when others are greedy.” It sure does seem like now is a good time to be greedy when others are fearful. There’s a lot of opportunity everywhere in the market. If these are things you believe in on a 10-year time scale, then this is a fantastic entry point.
Sam: Here’s another interesting one. I was thinking about the Bed Bath and Beyond and GameStop thing — my friend Joe sent this to me. Have you guys heard of Express? Maybe not if you’re in Canada — it’s mostly women’s clothes, like fast fashion before that was even called a thing. Their market cap is around $250 million right now, but their EBITDA is $150 million. I think Express is an interesting one.
Shaan: Yeah, but you’ve got to look at the debt and all the other obligations.
Sam: They do have a ton of debt. That’s the problem.
Shaan: Ryan Cohen is basically doing the Tai Lopez playbook — buying old retailers and spinning them into e-commerce, rejuvenating these big old brands. He’s doing the same playbook as Tai Lopez, just without being Tai Lopez. Which is actually a great idea in general. “Do the Tai Lopez playbook without being Tai Lopez” is a great, great idea.
Dry Powder, Bonds, and Portfolio Positioning [00:10:30]
Sam: When people talk about buying the dip, I hate it — because I’m like, I don’t have any money to buy the dip with.
Shaan: That’s what you’ve got to do.
Sam: I don’t know — whenever people say “buy the dip,” I’m like, with what? I don’t own anything. What do I do?
Shaan: You don’t keep any dry powder? I feel like you’re always Mr. Safety Net with cash and other things. You have dry powder. Why aren’t you buying the dip?
Sam: I have a hundred thousand dollars in cash.
Shaan: Oh, wow. Okay. I think you used to have way more in cash. Now that’s your short-term real estate? You’ve deployed everything, or what?
Sam: I’ve deployed everything. Yeah. I don’t have that much cash. I don’t have enough.
Shaan: What do people just do — keep cash in a checking account?
Sam: Certainly people do that. They do CDs, different versions of like a market-neutral cash position. I own bonds. I own a ton of bonds. Seven figures of bonds.
Shaan: Who told you to do that? Nobody buys bonds on their own. Everybody gets told to buy bonds.
Sam: A lot of my portfolio is 90/10 — 90% equities, 10% bonds.
Shaan: You don’t play? Do you own a bond?
Sam: I don’t own a single bond.
Shaan: Steph, do you?
Sam: I don’t own a single bond. Really. But I feel like Shaan’s right — what rate are you getting on these bonds? Aren’t interest rates at like zero?
Shaan: Yeah, like two percent.
Sam: I don’t know, it’s just like the traditional way of locking yourself into a money-losing position. Congratulations.
Portfolio Check: Are You Down From a Year Ago? [00:14:00]
Sam: Actually, that’s a good question. With all the havoc going on right now, Shaan — is your net worth down from one year ago today, assuming you did not add any new cash?
Shaan: Yeah, for sure. One year ago was like a market high, right? If you’re talking about right after the COVID bounce — COVID crash, then COVID recovery, all happened in like a three- to six-month period — so let’s just take the all-time high last year to today. I’ve got to be down 25 to 30 percent. Easily. Easily 30 percent.
Sam: I would have thought it would have been a lot more, because you have more high-risk stuff.
Shaan: Yeah, but a lot of my net worth is in Amazon stock, and Amazon stock has done fine. It’s down a little, but that one’s not so bad. And that’s a pretty large position, so it’s not super risky in my opinion. Crypto is down, like, over 30 to 35% from last year for most of it. But I have a few altcoin bets that have done really well — I was on here talking about Luna not long ago, Luna’s up 100%. So that doubled while other stuff went down 30. You know, we do all right.
Sam: But Shaan, where’s your psychology at? Because I feel like everyone knows the strategy — buy low, sell high — but when this actually happens, when all your investments go down, it’s so hard to actually maintain that psychology and say, “Oh yeah, I’m totally going to put more money in the market.” Are you like, “Yeah, this is awesome, I’m going to buy the dip”? Or are you struggling?
The Psychology of Holding Through a Down Market [00:17:30]
Shaan: Let me guess — don’t talk, Sam, don’t talk yet. I have a feeling this means nothing to you and you’re totally cool about it.
Actually, it’s even better than that. I don’t even look. Like, why would I look? It’s just going to be down. So I just don’t look, which means I don’t think about it — which is actually the correct way I should have been doing this all along. Like, waking up and seeing green put a nice little pep in my step, but that was sort of a false positive. And now I just don’t look because I’m like, “Oh yeah, of course I’m down five percent again today.” That’s just an average day now, so I just don’t even look.
And because I’m not looking, it doesn’t matter. I wasn’t selling when it was going up, and I’m not selling when it’s going down. So the day-to-day fluctuations don’t really matter. I just get some time back because I don’t want to go look at it and see the carnage. So I just kind of ignore it and go about my day.
Every now and then I’ll pause and ask myself: has anything changed? Do I view these investments differently now? Do I no longer believe these are good investments to be in over a five-to-ten-year period? No. Okay, so then what am I thinking about? There’s nothing to think about, essentially.
Do I buy the dip? That’s one where I like to just chill and sit on the sideline for a bit. I’ve spent a lot of time in my life gambling — I literally played a lot of poker, spent so many days in a casino — and I know the feeling of chasing a loss, trying to win it back. So I want to make sure I’m not doing that. There’s a difference between buying the dip and chasing a loss, throwing good money after bad. I’m just trying to differentiate between the two. Am I on tilt, or do I actually believe this is a good entry point?
Sam: Yeah.
Shaan: The one thing this does do is heighten my focus on earning money. Like, “Oh, I need to earn money. I can’t just rely on my investments completely.” So I got off my ass — I taught my course, I submitted my invoice for the podcast, I do things that will bring cash in. Otherwise it’s easy to get lazy when everything’s just going up. There are days where you could look at your portfolio and it swings up by a whole year’s worth of salary in a single day. That makes you kind of lazy. Like, “Well, if this can earn that much money just doing nothing, why do I need to hustle for that next dollar?”
Sam: I feel like a lot of people are feeling that way right now. They’re like, “Oh right, I have to work.” Which is actually a very healthy position to be in.