Hey Pal,
The newsletter revolves around the theme of optionality. By the end of the letter, you’ll understand what optionality is, applying it to money choices, and examples called NFTs. Enjoy.
Side note, I'll be changing the day I send these to Friday :)
Your 5 In's:
Insight - Optionality
Optionality = Lots of options
2021 has been a year for optionality. Bull-markets, Bitcoin, Spacs, Clubhouse, NFTs, and DeFi. Each a passing fad, a paradigm shift, or neutral...(your choice).
Seek options with limited downside and large upside (relative to your reasoning). Rest of the newsletter will give some context.
Investing - Luck As Your Roommate
Investing comes with high optionality.
You can store money in bonds, stocks, start-ups, cash, crypto, spacs, or (deep breath)...credit default swaps on triple A-rated subprime mortgage bonds:
How do we go about making the "right" choices? Well...
What doors are available:
Optionality is a large room with many doors (options) to open.
Behind every door, lies a room with even more doors to unlock.
How to enter rooms:
Though it's a double-edged sword, taking risks is the requirement to open doors.
It takes trial-by-error to open the doors you want. That’s what investing is.
What door to look for:
Find the room where luck is your roommate.
If you don't like the room you're in, unlock a new one. Eventually, you'll find what you're looking for (trial and error).
I've gone from:
- Investing in JP Morgan and American Express in March 2020
- Thinking I'd hold onto both businesses for 5+ years
- Selling those shares around December 2020
- Reinvesting into bitcoin immediately after
That's what having optionality means. Seeking rooms with limited downside and large upside (relative to your reasoning). Benefitting from trial-by-error.
At the end of the day, the room you choose to enter is entirely up to you. If you don't like the room, avoid it. It's that simple.
Innovation - GIF's Worth Millions
NFTs have become the optionality boom of 2021:
What Are NFTs?
Non Fungible Tokens are cryptographic keys that prove authenticity, ownership, and status for digital "assets".
Art is the current practical application. Think of NFTs as GIFs, pictures, videos, music, or anything online, but with a cryptographic receipt attached. The token's sole purpose is to prove ownership.
NFT Example:
This picture is worth $0:
I screenshot the image a few minutes ago.
Someone somewhere owns the same picture, but with the cryptographic token. This modifies the artwork into an NFT worth 605 ethereum (~$760,000).
Don't believe me? This CryptoPunks NFT was sold a few days ago:
0xd387a6 is a rich pal.
You might be thinking this is stupid. Why would people buy this? Optionality doesn't care about what you think. It's just available.
What Do NFTs Give?
You get ownership of digital data. It's impossible to replicate the token (non-fungible).
Like first place on an arcade game scoreboard:
An NFT purchase gives immutable proof on the blockchain about who the owner is:
Most importantly, NFTs give creators new ways to monetize.
Two years ago, I followed an artist on Instagram. Last month, the creator tokenized their art into NFTs—and made $4 million...selling 3 NFTs...in 9 minutes. Crazy:
Want something crazier? There are NFTs that allow you to redeem a pair of socks for 92 ethereum or...
The availability of optionality in 2021 is game changing. NFTs are a clear example.
Internet - O Canada
Haha silly man go march march:
O Canada, my home and native land:
They spelled my name wrong:
Inbox - Photo Of The Week
Rushil go click click in cold weather without a jacket:
Rushil's 2 Cameras
(by @coldcyrus)
|