Hey friends,
Every week brings something new on the Internet that we can be collectively excited about. The $GME market movement did not disappoint.
Throughout the pandemic and the Internet craze, one technique that I adopted to keep a grasp on reality and have a event to look forward to is designated meal days. Thursday dinner is pho; Monday dinner is poke bowls; Friday breakfast is bagels and lox.
Yesterday morning, as I went out to get fresh bagels, I got three blocks before I realized that I was sans mask. The world felt normal for a few brief minutes amidst fresh air. It was blissfully pleasant. Unfortunately, the rest of the trip required textile acrobatics to pull my sweater over my mouth and undignified communication to get my freshly baked bagels.
Today's Contents:
- Weekly Song: Bottom of the River
- Investing Messiahs
- Bitcoin, Crypto, DeFi, oh my!
- Good Reads
|
|
Weekly Song: Bottom of the River
I've been saving Bottom of the River for the perfect week. Luckily it's upon us. The song is written by DS member Eric Hölljes and performed by his band Delta Rae (Eric is on the left, his brother (Ian) is the blonde on the right, and their sister (Brittany) is in the center). And, well, they are all quite talented. Check out the video.
I was sandwiched between Ian and Eric during college. I'll never forget standing at the bus stop on the freshmen campus and watching the two of them with their guitars going from dorm to dorm to conduct free concerts and admiring their incredible passion and dedication. My siblings and I struggled to successfully co-produce a cheesecake let alone form a band with a dedicated following and tour the United States.
Delta Rae has a special gothic blue-grass vibe and Bottom of the River channels gospel music. Eric explains how he wrote the song: “I woke up with this chorus ‘hold my hand, ooh baby it's a long way down to the bottom of the river’ and I ran to my phone at 3am and I recorded it. Then the next day I brought it to my brother Ian, and I played it for him and he’s like ‘I think that’s a gospel song’ and I was like ‘that’s what I thought!’. It sort of just poured out, and we wanted to write sort of an Old Testament, Biblical, Gothic story."
Why Bottom of the River for this week? Well, it felt like parts of the market were in some sort of maniacal furor. (Drunk and driven by a devil's hunger). Perhaps in the absence of consistent spiritual practice, many Americans have turned to online forums to express devotion to their flavor of business leader, market maker, and single name stocks with almost religious zeal.
"Bottom of the River" by Delta Rae
The wolves will chase you by the pale moonlight
(Drunk and driven by a devil's hunger)
Drive your son like a railroad spike
(Into the water, let it pull him under)
Don't you lift him, let him drown alive
(The good Lord speaks like a rolling thunder)
Let that fever make the water rise
(And let the river run dry)
And I said
[Chorus]
Hold my hand
Ooh, baby, it's a long way down (long way down)
To the bottom of the river
|
|
Let that Fever Make the Water Rise. Who is Your Investing Messiah?
There was a lot of furor this week focused on 'what side' you are for or against in relation to the GME short squeeze? Are you for Wall Street? For WallStreetbets? For short-sellers? For hedge funds? For Robinhood? For Chamath? For the barstoolsports guy?
My view: Is it a revolution? There is so much noise out there, first in politics and now in FinTwit. I'm not going to dive into it other than to say let's keep perspective here. Where are the majority of the market assets? With the major asset manager who make-up the finance establishment - and it seems like Vanguard and Blackrock are doing just fine.
If we’ve learned anything from this, it’s that we give incredible oxygen to extreme voices which make them grow and gain more followers as people seek to find tribes. It felt like the Internet stopped while everyone had to comment and analyze the situation. It was like a collective video game delusion. Where you could pick your leader, contribute a little to the dialogue, and watch as the rest of the chaos ensued. It's entertainment and community. Not investing or revolution.
Here is the original post on GME on r/wallstreetbets Reddit and here is Elizabeth Warren's letter to the SEC.
|
|
On Tribal Affiliations: Bitcoin, Crypto, DeFi, oh my!
The section above was not to dismiss that tribal affiliations aren't powerful. They can indeed create, on occasion, reality. Bitcoin is a prime example of one that has a chance (perhaps even a relatively high probability) of cementing itself long-term.
If you're a cool Bitcoin kid these days or a tech billionaire with a cult-like following, it's now trendy to put #bitcoin with this little graphic at the front of your Twitter profile.  .
My entry into Bitcoin was a philosophical one, as I was introduced by one of my best friends from college, Michael. Michael received departmental honors for literature and once embarked on PhD in a top program before becoming disillusioned with academia. The timing was perfect for him to put philosophy into action with the burgeoning crypto community, and he is now head of product for Casa, a Bitcoin storage company. Bitcoin and the broader crypto community, at its best, has a strong respect for history, philosophy, and futurism. For more on that, I recommend Michael's podcast Byzantine Dreams and this recently released episode with Douglas Ruskhoff, a media theorist, author, and documentarian studying human autonomy in the digital age. I particularly enjoyed the second half of the conversation, when they grapple with how society and capitalists turn these new digital technologies that were once pioneered by philosophical purists into money-making machines and discuss what comes next.
I, too, appreciate the undercurrent of freedom and autonomy that exists and powers the community. That is what got me in the door and excited about the future of Bitcoin. I've been bullish on Bitcoin for a while and bought in early 2015. Should have bought more then, obviously. It's been an interesting ride since then with the big spike in 2018 and the languishing until relatively recently.
Much of how people feel about Bitcoin depends on what price they got in at and how much they hold. At this point, if Bitcoin fluctuates up and down in the tens of thousands, it doesn't really matter to early adopters because it's mostly an upside bet. I'd evaluate buying into Bitcoin now at ~$34,000 totally differently.
Today I consider it still speculative, but what isn't? I had been using GLD as a hedge for inflation this year. I got worried that it had no cash flow supporting it and its value was just as reliant on fiat/investor psychosocial construct as Bitcoin. The big shift from 2018, is that it seems that more holders of bitcoin are evaluating their holding as an institutional digital gold hedge and less as a speculative early adopter. See chart below from Ark.
Now that there has been institutional adoption of bitcoin and the regulation doesn't seem to be locking it down Bitcoin seems much less likely to me to fade out of existence. This view seems shared by Ray Dalio and Cathie Wood as you can read in full (Ark calculations on correlation with other assets is below):
It's still unclear though why or when people will start transacting real goods/services/assets in BTC but possibly that changes quite quickly if investor confidence is lost in the dollar or dollar/euro/sterling all at the same time. So, given the future is uncertain, it feels like Bitcoin should be (at least a small part) of a diversified portfolio.
|
|
Good Reads
Cathie Wood and Ark released Big Ideas 2021.
Electric Vehicles valuation watch from the FT spreadsheet here.
Ben Evans released his "The Great Unbundling" Report Here.
Ray Dalio and Bridgewater provided their written analysis of Bitcoin this week.
|
|
Community Corner
Edify Deck Review: Jeremy Diamond talks with Edify founder Kristen Gallagher on her seed pitch deck that paved the way for a $2M seed round.
|
|
|
Thank you for reading. Please always be in touch.
Best,
Katelyn
|
|
|
|
