Text from a friend I invest with. A journey of a thousand miles begins with a single step

You may wonder how applicable my advice is, because I work as a VC, which means early access to information. Well let me tell you that behind the fancy VC veneer, I am a crypto degen. It is how I have made most of my actual money. Spotting these opportunities has almost no correlation with VC investing where your time horizon is 5–10 years out.

I will go through some of my wins, some misses, and sum up the lessons at the end.

1 + 1 = 3

First, working with a friend who is deep in the crypto space is very helpful. 1 +…


PUBLIC EQUITY

This is a recap of my largest concentrated positions in my personal portfolio, and how they have performed

I like having a concentrated portfolio. My biggest holdings through 2020 were Bitcoin, Baidu, Cross-Harbour Holdings, and Cinemark.

Bitcoin

By far my biggest position. I have been accumulating since 2017, buying at prices between $6K–10K. Today, one bitcoin is $50K. I still think it has a long way to run given that BTC’s market cap is 1 trillion while gold is at $10T+. I think $250k/BTC is fair in the next 2–3 years, and $1M / BTC in the next five years (2026)…


VENTURE CAPITAL

Opinions expressed are solely my own and do not express the views or opinions of my employer.

We are seeing the altcoin boom again. Euphoria without a consideration for what expectations are priced in to the token price. Prices are currently driven by short-term considerations and momentum. At some point however, cryptocurrency markets too will be mature and judged by its fundamentals. I write this post to show a long-term investor’s framework for thinking about Uniswap’s valuation.

Uniswap tokens will generate cash flow

Uniswap charges a 0.30% fee on trading volume, of which 0.05% can be distributed to token holders when the “switch” is turned on…


VENTURE CAPITAL

Opinions expressed are solely my own and do not express the views or opinions of my employer.

I initially wrote the below in January 2020, with the aim of giving insight into how I thought about Maker DAO and its valuation. I am posting it now, along with observations on what has happened in the one year since.

Stablecoins

Stablecoins are cryptocurrencies whose value is pegged to a target price, like the US dollar. …


CODE

Using Python to prove a controversial brainteaser

I find the Monty Hall Problem one of the most fascinating brain teasers, because it seems deceivingly simple. When Marilyn Von Savant, the woman with the highest IQ, answered this brainteaser correctly in 1991, she was inundated with over 10,000 letters from academics and Ph.Ds criticizing her “error”, only to be proven later that she was correct.

The problem goes like this:

The Monty Hall Problem

  • You’re on a game show.
  • There are three doors.
  • Behind one of them is a car.
  • Behind the other two are goats.
  • You get to open one door, in hopes of getting the car!

But then, this happens:


PUBLIC EQUITY

Extremely undervalued sum-of-the-parts play with a large margin of safety, trading below net cash & investments

Foreword:

Small-cap ($300M — $2B USD market cap) stocks provide immense opportunity to outperform the general index because bigger managers move to large-cap stocks where more capital can be put to work. This leaves many opportunities in the small and micro-cap space. This is something I experienced from my time working for a variety of fund managers, from a $10B+ long / short equity fund, a $1B activist fund, and a $50M small-cap fund.

Cross-Harbour Holdings Ltd. (0032: HK)


VENTURE CAPITAL

Please keep in mind that everything below is based on limited publicly available information.

Thesis: DuckDuckGo (“DDG”)(https://duckduckgo.com/) will reach a valuation of at least $1B despite Google’s dominance in search. It was last valued at $160M in late 2018.

I predict at least a 5x gain, and up to 30x increase from its rumored valuation of $160M in late 2018. I want to emphasize that DDG does not have to become the next Google — this investment is suitable for a series B or C investment for a good risk adjusted return.

DDG is a search engine focused on user…


VENTURE CAPITAL

Summary: I will try to distill down monetary theory help you fundamentally understand how currency and Bitcoin is valued.

I claim that: 1) Bitcoin has negligible intrinsic value without mainstream use as a transactional currency, 2) that despite this, Bitcoin can still hold value based on a different valuation model, 3) a valuation of Bitcoin, and 4) how a cryptocurrency like Facebook’s Libra affects Bitcoin’s valuation.

Let’s start with how the US Dollar, gold, and Bitcoin is valued.

How is the USD valued?

Quick answer: MV=PQ.

Long answer: With the USD, the government expands and contracts the money supply. “PQ” is the total value of…


PERSONAL STORY

Be the standing sheep

In December 2017, I was a recent college graduate working at an investment bank in New York. While I learned a lot from the demanding nature of the job, I was soon contemplating how I could redirect my career to get what I wanted faster, and have fun doing it.

“The tremendous price (of competition) is that you stop asking some bigger questions … don’t always go through the tiny little doors that everyone tries to rush through, maybe go around the corner, go through the vast gate no one is taking.” …

Sangyoon

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