Surf Report: Free and Open

Issue 37: 06.06.2021 (Free Version)

“I make mistakes, I am out of control and at times hard to handle. But if you can't handle me at my worst, then you sure as hell don't deserve me at my best.” —Marilyn Monroe
INTRODUCTION
June 6, 2021

Hi everyone—I’m so glad to have you here. What a week.

Looks can be deceiving and perspective matters.

Imagine being the first person to suggest that the sun isn’t actually rising, we’re just on a big sphere that’s spinning. I wonder how many people took it seriously as an idea but were too afraid to say so?

Most people didn’t take it seriously and as a result were unable to make sense of a lot of other things, relying instead on deities to be the “just so” explanation of why things happened the way they did.

We say that the run rises in the east, but we understand that in reality it’s actually us who are rotating in front of it. Despite knowing what’s really happening, most people prefer to pay attention and talk about what appears to be happening instead.

This has everything to to with investing.

Right now more and more people who invest in the stock market are waking up to the fact that it’s continually being manipulated with selective bailouts and preferential treatment that prevent large corrections and bankruptcies. Governments and central banks think that by doing this they are helping. Unfortunately, this just prevents information from making its way through the system by naturally removing mismanaged companies and bad capital allocators.

Like park rangers putting out tiny fires and unintentionally letting the conditions for a devastating wildfire to grow, the government prefers the appearance of health and stability to actual health and stability.

One only needs to look at the shenanigans happening in the memestock and altcoin worlds, where pump-and-dump schemes and artificial stock halting prevails, to see what happens when economic calculation no longer works and ridiculousness is the real indicator of profit potential.

Somehow this clownworld is seen as the place where the sensible go to invest their hard-earned money, and Bitcoin is the volatile, risky place to be. Just look at all of its up and down price action. Looks dangerous. Must be dangerous.

But like the perspective shift required to understand the heliocentric model of the solar system, it’s actually Bitcoin that’s the sensible free and open market right now, and the stock market that’s risky and makes no sense.

The surprising fact is: the Sharpe ratio of Bitcoin (a measure of investment return that factors in the risk required to get that return) is about the same as a traditional 60/20 stock-bond portfolio, with one key difference: Bitcoin has a far bigger compounded annual growth rate (CAGR)

The people who panic-sell or are margin-called are removed from the system and forced to reevaluate how they’re managing risk, using leverage, and understanding the underlying investment.

And the people who hold through the volatility—both the highest highs and the lowest lows—are rewarded for not making investment decisions based on fear, panic, greed, or impatience.

No authority figure is needed to police things and keep certain players alive or let others fail. The system just does this naturally. This is what a true free and open market looks like.

“Coins just organically change hands to people who are inclined to hold them or who are better at managing risk” —Dr. Adam Back

The price volatility in dollar terms is natural result of people figuring out how to value such a novel asset and are wrapping their heads around what it’s worth to them. For similar reasons, Amazon stock also had huge drawdowns of up to 80% on its way to becoming the behemoth it is and making Jeff Bezos the wealthiest man on the planet 20 years later. Most investors did not hold their shares through Amazon’s volatility because they thought it was just another dot com bookstore bubble waiting to burst.

If you don’t like something when it’s down, then you don’t deserve it when it’s up.

And it’s only by understanding something—not just looking at what it appears to be—that you can truly value it for what it is.

Until next time 🤙,

Mark


“Change happens when the pain of staying the same is greater than the pain of change.” —Tony Robbins

Breaking 🌊

🛒 Etsy is buying Gen Z-focused fashion resale app Depop for $1.62 billion [CNBC]

⚠ Amazon devices will soon automatically share your Internet with neighbors [Ars Technica]

🤷‍♂️ AMC Looks to Issue 25 Million More Shares After 2,300% Rally [Barron’s]

😯 El Salvador will be adopting Bitcoin as legal tender [CNBC] Secondary effects to this law passing could force other nations to give Bitcoin status as "money” under commercial law. Here’s a great thread of the potential implications, and here’s a thread from the El Salvadorean president himself explaining the rationale.

₿💱 Square to Invest in Solar-Powered Bitcoin Mining Facility [Bloomberg]; Apple Pay, the top mobile payment system in America with 43.9 million users, can now be used to spend Bitcoin [CNET]; Google will start allowing crypto companies to advertise to users on their platforms. [Forbes]; eToro, the world’s second largest Bitcoin exchange, announces move to Miami as city establishes itself as what Mayor Suarez calls a “crypto hub” [Miami Herald]; The Reserve Bank of India rolls back previous stance, states that banks can't stop investors from investing in crypto [RepublicWorld]


From The Tweetbox 🐦

“More businesses launched on Stripe since the start of 2020 than did in the rest of Stripe's history before then. Overall rate of migration to the internet economy is hard to overstate.” [Tweet]

“long remote working is long punting of meme stocks and alts. quite a bit more challenging for folks to day trade this stuff in an office location surrounded by coworkers” [Tweet]

“want to build a better product? play more games. game devs are years ahead on product design than your favorite SV unicorn” [Tweet]

“Elon Musk has had a big impact on crypto recently, & because some of his actions have been a bit unconventional, I was inspired to dig in a little deeper to find out what exactly his ‘end game’ is & what I’ve found does not disappoint.” [Thread]

“Paul Tudor Jones called & he said, ‘Do you know that when Bitcoin went from $17,000 to $3000 that 86% of the people that owned it at $17,000, never sold it?’ Well, this was huge in my mind. So here’s something w/ a finite supply & 86% of the owners are religious zealots.” [Tweet]


For The Pros 😎


Worth A Read 📃

The Cost of Cloud, a Trillion Dollar Paradox, from Andreesen Horowitz

We show (using relatively conservative assumptions!) that across 50 of the top public software companies currently utilizing cloud infrastructure, an estimated $100B of market value is being lost among them due to cloud impact on margins — relative to running the infrastructure themselves.


Tip ☝

Cash in on your super old TV.

Your Grandma’s Tube TV Is the Hottest Gaming Tech: Thanks to a retro gaming renaissance, enthusiasts are scouring online marketplaces for 20-year-old CRTs.

"Vintage games weren't designed to look as sharp as we are used to seeing them on HDTVs," Starkweather said. "Moreso than even film or television, video games of the era were directly tied to CRT display technology. They utilized the unique characteristics of a CRT display in order to blend pixels and create details that don't come across on an LCD screen."


Check This Out 👀

Stripe Payment Links. Sell online without a website.


PNGs 🖼

Bitcoin power law corridor as of September 2019. New data plotted in red.


Groms 🐣

Grover—a “Netflix of gadgets”—rents out consumer electronics for a set monthly fee. They’ve increased their subscriber base by 50% in the last six months from 100K to 150K active subscribers. The company also grew its ARR by 2.2x to ~$60.3M in 2020.

(Related stat: There were up to 66,000 monthly searches for "rent a laptop near me" last year.)


Pods & Schools 🐬🐠

🔊 Bitcoin Update w/ Plan B & Dr. Adam Back, on the We Study Billionaires podcast with Preston Pysh

“The way it adapts is kind of biological/evolutionary—people who can’t handle it leave. They put money in, it drops, they panic-sell at a loss. Coins just organically change hands to people who are inclined to hold them or who are better at managing risk”

🔊Alex Epstein - Can Fossil Fuels Save The World?, on the Modern Wisdom podcast

“I’m testifying in front of the Senate… and I give this whole presentation explaining why I think that some of the then-Obama administration’s policies were in the wrong direction, and she just dismisses all of that and asked me ‘Mr. Epstein, are you a scientist?’ and I said ‘No, I’m a philosopher,” and she said “Oh, well why do we have a philosopher?” and I said “It’s to teach you how to think more clearly.”

📚 Wanting: The Power of Mimetic Desire in Everyday Life, by Luke Burgis. I liked this book so much I created a whole Twitter thread of all my favorite excerpts.

"An idea that challenges commonly held assumptions can feel threatening—and that's all the more reason to look more closely at it: to understand why."


Tools of the Trade ⚒

Products I use to make money

Swan. I recently became an official Swan partner because I love them so much. So if you're like me and just want an easy, automated way to buy bitcoin on the regular with the lowest fees in the game, head to https://swanbitcoin.com/Mulvey. You even get $10 for free ✨

StockCharts. I easily make back the small monthly subscription fee with the superpowers it gives me.

Carrd. I use card for all my landing page needs. Use this link or referral code 892PYX69 to start your own web empire.


Disclaimer

Nothing in this email is intended to serve as financial advice. Do your own research.