In Today's Email:
- 🔥 Shaan's take on the market
- 💸 Robinhood launches a wallet
- 📈 Chart of the day
I saw a funny commercial this weekend.
I was watching football (holy sh*t, amazing games) and a turbotax commercial came on.
It’s a dude in a cubicle. He checks his phone and goes “wow. I’m a millionaire”
He starts packing up his desk to quit. Gets a notification “oh. Not a millionaire”
He’s in a meeting. Checks phone “millionaire” and gives his boss the middle finger
One sec later “not a millionaire :(“
I don’t know if TurboTax was trying to trigger every crypto holder, but they did.
You see - 2022 has not been a fun year for the ole’ portfolio.
I have most of my money in:
- Tech stocks
- Crypto
Long term, I’m betting that technology companies are going to outperform the general market.
That’s it. That’s the whole thesis. It’s been the same since 2010 when I bought my first share of Google.
Well - the problem with long term investing is that its hard not to look at prices short term.
Right now, crypto and tech stocks are getting demolished in the market. If the markets were a prison yard, my portfolio would be some guy named Rico’s b*tch.
Big tech stocks (Facebook, Amazon, Google, etc.) are down 10-15% this year, and growth tech stocks (like Zoom, Peloton, Hubspot, etc.) are down 20-30%.
Crypto is down more (25-35%).
These are great moments to step back and ask some questions:
#1 - Did my belief change? Or just the price?
For example, with tech stocks, I still think companies like Amazon, Google, Facebook are some of the greatest businesses ever invented. I don’t think any of them are worse businesses this year.
For crypto, I think we’ve created a new financial system with superior alternatives to gold, currencies, stock exchanges, and savings accounts. And I think the smartest technical talent is flooding into this market, so it’s going to have the fastest pace of innovation. That’s still true whether ETH is at $4k or $2.2k.
#2 - Am I a tourist? Or a Local?
Tourists leave when the weather gets bad. Locals know that seasons change, and know how to live with the weather cycles.
#3 - Is it crashing? Or is everything on sale?
How silly are our brains. When prices are going up, we wish we had bought more at lower prices.
Then prices go down, and we sit on our hands, too scared to buy.
I had a professor in college who was retired by the age of 35.
I asked her how she retired young, and she said she got lucky because she was able to buy tons of great assets “on sale” for 50-80% off. First was during the dot com crash, she picked up the surviving tech stocks on the cheap (amazon, ebay etc.). Then in the 2008-2009 housing crash, she bought tons of real estate for 80% off.
I’m pretty young in my investing life, but have seen 1 recession, 2 flash crashes, and 2 crypto winters (2014 and 2018) where the market stayed down 1-2 years. Those questions have helped me manage my mental game during the down times (I have a separate set of questions during bull markets)
Here’s a couple twitter threads that I thought did a good job talking in more depth about what’s going on.
I suggest you read both (just click on the images and they'll open up)
$BTC at 35k How did we get here and what possibly comes next? A thread on macro, bitcoin on-chain and derivatives 👇👇
— Dylan LeClair 🟠 (@DylanLeClair_)12:46 AM • Jan 24, 2022
1/ Some things *I think* I’ve learned messing around in crypto for the last 12 months.
— Corey Hoffstein 🏴☠️ (@choffstein)4:59 PM • Jan 23, 2022
So what else is going on?
Robinhood is Launching A Wallet
This is good news.
For the past few years, Robinhood has been telling users they can easily buy crypto… but you couldn’t transfer it to your own wallet.
As they say: “Not your keys, not your coins”.
Well - after years… FINALLY Robinhood has their own wallet that will let you transfer your coins.
Not surprising they are building crypto features…crypto was ~15-20% of their revenue last year.
They got 1m waitlist sign ups for the wallet .. and just opened up access to the first 1,000 beta users.
I’ve been spending a lot of time digging into random Dune dashboards (i love dune and need to invest in it)
Here’s a simple chart that is telling. NFT adoption is a hockey stick:
I know a lot of people think NFTs are silly/useless.
But I’ll share one observation: A few weeks ago I went to a farming conference (like, actual Food farming, not yield farming) in Kansas City. (why? Because it sounded dope and I do dope shit)
Talking to a bunch of people who are totally outside the tech and crypto bubble was interesting. A couple observations:
1/ I told them I invest in startups. They didn’t care. I told them I invest in crypto. Their eyes lit up.
2/ The most common “first crypto” these people owned is….DOGE! They heard Elon say it’s good, and the price was low (it’s only 20 cents! Bitcoin is too expensive for me, i can’t even buy one because it’s $50k. Doge might go way up and be the next bitcoin!”)
3/ Besides Doge, the next thing they wanted to talk about is NFTs. Maybe because celebs are releasing lots of NFTs. Maybe because it’s a picture rather than math. But I now believe that NFTs are going to get adopted a lot faster than people think by the mainstream population
Alright. Thats it.
This is a biig week for the Milk Road.
If you’re loving this newsletter gimme a quick reply with a OH YEAHHHH and lmk you're with me 👊
Shaan “Mahomes” Puri
