What the Black Panther Party Taught Me About Being a Successful Investor

Picture this: it’s the late 1960s in the midwest USA and the world as you know it is almost unrecognizable.

There is an abundance of mis-information. People would tell you that up is down and right is left. The media portrays almost everything as politically charged and divisive.

It’s kind of hard to tell heads from tails — not to mention fact from fiction…

Sounds familiar?

I recently read about Fred Hampton’s infamous speech in 1969 to his local black panther party. He was helping the congregation grapple with the same internal tension many of us recognize.

How do you reconcile affiliation with an organization when you do not completely agree with their ideology?

Highly educated people knew how to command attention and dominate the conversation. These intellectual elites talked a good talk but their actions didn’t add up to wanting to actually help.

Fred and his neighbors didn’t want to be fooled. They knew what they valued. And more importantly, they knew what authenticity looked like.

To his point, “a person can have as many degrees as a thermometer but that doesn’t mean they have an actual interest in knowledge and furthering themselves”.

You see, there were loads of theories floating around but they lacked a certain rugged refinement that only comes from on the ground experience.

They were tired of having their dreams left exposed to decay by those with no practical skill in making change a reality. And even more tired of being exploited by the government and posers giving them the run around.

Can you imagine going to your local town hall meeting, month after month only to be told that you need to return the following month for your voice to be heard?

Can you imagine the frustration from going through “due process” and seeing no real progress from years of effort?

That was Fred’s reality.

They had spent years trying to follow traditional means of having your voice heard by community leaders but had nothing to show for their efforts.

The same frustrations happen even today.

Huey Newton, the leader of the Black Panthers, advocated taking power into his own hands (via 9mm pistol). Newton was known to police undesirable situations himself…but that didn’t sit quite right with Hampton. Hampton wanted change and he wanted it now, but he didn’t believe in breaking the law or crossing the line into illegality.

All Fred wanted was to hold his leaders accountable for what they do (and not do). He wanted a revolution.

In his words: “A lot of people get the word “revolution” mixed up and they think revolution’s a bad word. Revolution is nothing but like having a sore on your body and then you put something on that sore to cure that infection. And I’m telling you that were living in an infectious society right now. I’m telling you that were living in a sick society. We’re involved in a society that produces criminals, thieves and robbers and rapers. Whenever you are in a society like that, that is a sick society. And anybody that endorses integrating into this sick society before it’s cleaned up is a man who’s committing a crime against the people.”

He goes on…“Any program that’s revolutionary is an advancing program. Revolution is change.”

Fred made some very good points that day and many of them ring true even 50 years later.

The more I reflect on them, the more I realize these are central concepts to guide decision making. Investing is a game of finding truth and profiting from irrational over or under-reaction. No emotions, just level headed judgement accessing the current situation for what it is and evaluating future potential. Prudent decision making is vital.

Here’s what I took away:

Don’t fight reactionary behavior with more irrational behavior.

According to Hampton, “We’ve got to face the fact that some people say you best fight fire with fire, but we say you put fire out best with water. We say you don’t fight racism with racism — we’re gonna fight racism with solidarity. We say you don’t fight capitalism with no black capitalism; you fight capitalism with socialism.”

Trying to fight one action with more of the same only makes the hole deeper, but does not squelch the problem.

The best investors don’t look for ways to spite, seek revenge or otherwise fight market mis-pricing. Instead, they look for the most direct solution and work to implement it.

In real estate investing, for example, if a neighborhood is undervalued, the best thing to do is to acquire and renovate the properties, then reintroduce fairly priced homes to the market. The market gets corrected and the neighborhood thrives. If the investor instead decided to leave the property in disrepair then the poor conditions would remain, limiting the upside potential and overall property desirability.

If something isn’t going in the direction you want, make it less appealing to the proponent

Henderson’s group was struggling to sort friend from foe. People from all walks of life were claiming to help the African-American person improve their lot in life.

Many of these folks were just charlatans that brought more disappointment.

In his words, “We have to understand very clearly that there’s a man in our community called a capitalist. Sometimes he’s black and sometimes he’s white. But that man has to be driven out of our community, because anybody who comes into the community to make profit off the people by exploiting them can be defined as a capitalist.”

He made two salient points here: First that it is wrong to exploit people, and second that the community has a responsibility to make exploitation less profitable if they want it to stop.

People have the power.

Extractors will do anything that’s profitable even to the ultimate detriment of the target audience if they are allowed to operate unchecked. “I’m saying that any program that’s brought into our community should be analyzed by the people of that community. It should be analyzed to see that it meets the relevant needs of that community.”

People are self interested. The people that can help are often out of touch with reality

The conversation of the wealthy elite versus everyone else exists for a reason. The masses have orders of magnitude fewer resources than the wealthy. In Hampton’s words, “We got to face some facts. That the masses are poor, that the masses belong to what you call the lower class, and when I talk about the masses, I’m talking about the white masses, I’m talking about the black masses, and the brown masses, and the yellow masses, too.”

The superficial divisions do not matter, what matters is that those on the bottom recognize their station and organize themselves.

Theory gone untested is dangerous

Theory is not gospel. Theory is an idea up for debate and able to be disproven. Theory is essentially a long held hypothesis that is open for feedback.

It’s important to keep this in mind especially when discussing investment opportunities. Only a law can be taken as fact. “I don’t care how much theory you got, if it don’t have any practice applied to it, then that theory happens to be irrelevant. Right? Any theory you get, practice it. And when you practice it you make some mistakes. When you make a mistake, you correct that theory, and then it will be corrected theory that will be able to be applied and used in any situation. That’s what we’ve got to be able to do.”

Strong investors create a hypothesis, look for confirmation, then act on the idea. If it plays out then the theory was proven. It is does not, then the theory was invalidated.

Labels don’t matter, real progress does

In a quote above, Hampton referenced capitalists trying to exploit the community fo their own benefit. The key term here is exploiting. This is what gives capitalism a bad name.

As prudent investors our job is to set the line of demarcation between label and benefit. We decide if we want to throw the baby out with the bath water or take what you can and leave the rest. Not about a racial divide, it’s about ethos. True progress in our communities and profitable ventures have nothing to do with the programs, dishiki a proprieter wears or “wokeness”. These are all labels that distract from the ultimate judgement of utility and appropriateness.

“Any program that’s revolutionary is an advancing program. Revolution is change.”

The best investors look for the underlying progress the company or investment in making in their local area or industry. Only real progress, not media matters. If progress is being made, if the people are advancing then that is a good thing, no matter what you want to call it.

Collective Action is how real progress is made

Nothing boils my blood more than thinking about today’s leaders and how utterly out of touch they are with the plight of society. The wealthy are getting wealthier while the rest of us are left to fend for ourselves.

“We say that even though all of those luxuries exist on the mountaintop, we understand that you people and your problems are right here in the valley.” — Fred Hampton

Here in the valley collective action is the only saving grace we have. 50 years later and it’s hard to find an example of participatory economics in practice.

New technology and web3 are changing that.

Collective economics allows for greater change and individual action alone. We are changing the narrative for wealth building and turning it completely on its head.

That might mean that we give up some individual aspirations of the luxurious mountaintop and to improve conditions in the valley.

It’s about time someone did.

If you like where we’re going and want to learn more, we’ve created a free online community on the Discord app. It’s the smartest group chat you’ve ever been apart of and I’m extending you an invitation to join.