Surf Report, Issue 2: Free Edition
Fresh perspective on markets and marketing, every Sunday
INTRODUCTION
October 11, 2020
Hi everyone! So glad to have you back. What a week.
In case you missed it while sheltering in place and masking your way through the paper goods aisle: roughly $2 Trillion has been printed in 2020—over 20% of all the circulating dollars—which is a staggering amount that’s hard to fathom, but has some very smart people more convinced than ever that the future reserve currency will not be the U.S. dollar for much longer. And in order to keep money you’ve already made you need to protect it from the depreciatory effects of time.
Square CEO Jack Dorsey bought 4,709 Bitcoins—$50 Million worth—to be held on the balance sheet of the company, much like cash. (here’s the Square investor announcement). In the grand scheme of Square’s portfolio that’s not a huge sum, but Microstrategy’s CEO Michael Saylor made a similar move not long ago but with $425 Million, using similar logic:
We have an approaching liquidity crisis with all the money being printed by the Federal government, so investors are looking for hedges against inflation
BTC is better than gold as a hedge against inflation since there will only ever be a fixed amount in circulation, while being even more uncorrelated to the markets than the precious metal
What does that mean for people like you and me?
Well, it depends. Your time horizon, employment status, side income streams, monthly burn rate (expenses), debt, dependents, emergency fund… and of course your personal feelings about the future of bitcoin and familiarity with blockchain as a technology.
One thing’s for sure, more minds than ever are on the subject of bitcoin so now’s a perfect time to join them… even if you don’t put quite as much of your own skin in the game just yet.
(If you’re curious where to start just reply to this email, I’m happy to help supply you with the most helpful articles and resources I’ve found so far)
Thanks again for coming along with me on this. Let’s go.
—Mark
“The excessive increase of anything often causes a reaction in the opposite direction.” —Plato, from The Republic
Breaking 🌊
Nvidia pledges to build Britain’s largest supercomputer following $40 billion bid for Arm. Nvidia, a graphics card maker historically associated with the gaming industry that found a second home among cryptocurrency miners, is now a part of healthcare and pharmaceutical innovations. “Tackling the world’s most pressing challenges in health care requires massively powerful computing resources to harness the capabilities of AI.” Lesson: Categories can blind you to possibilities.
Cisco has to pay the patent troll toll. It was the latest in a string of tech giants coming under government scrutiny while also helping to carry the entire stay-at-home economy out of a recession. Lesson: Market share costs friction, e.g. negative consumer sentiment, increased government intervention… No extraordinary business goes unpunished.
Will Tesla become the new Amazon? One bullish investor, who rated $TSLA a buy at $60 back in 2018, sees an $AMZN-like future for the company: “[Amazon] has traded in the 50x-100x earnings range for over a decade.” Why? Continued lack of competition from other automakers and battery manufacturers. Lesson: Getting distance between you and second best as large as possible, as early as possible, compounds on itself.
AirBNB is going public, for real this time. The home rental company is one of the most highly anticipated listings in a year of highly anticipated listings. The company could achieve a valuation of more than $30 billion in the IPO—much more than the $18 billion it was valued at back in April. AirBNB has seen an unexpectedly sharp recovery despite how Covid-19 rocked the travel industry. Lesson: Setbacks are opportunities. Demonstrating an ability to weather a tough storm instills confidence and can pay off bigtime.
SEC Is Willing to ‘Try’ a Tokenized ETF, Chairman Says. “In a webinar with the Chamber of Digital Commerce yesterday, Clayton said, ‘It may very well be the case that [...stocks] all become tokenized.’ Lesson: Cutting edge technology can become the norm faster than you think.
From the Tweetbox 🐦
Here’s An Idea 💡
The French entrepreneurs who founded Michelin tyres also created the Michelin Guide as a way to drum up interest in driving to new places and wearing down more tyres. (I love spelling tyres this way)
“Car enthusiasts loved the Michelin Guide. What sort of tyres do you think they bought?”
Read about it over at Marketing Examples
Surprising Trend 📊
There’s been a rise in index interest lately—ultraviolet & stock market. The top two U.S. searches for a ‘whats the best’ Google query are ‘whats the best stock to buy right now’ and ‘whats the best uv index to tan’:
Think Of It Like This 🤔
Working from home is like getting a raise.
“During COVID-19, on average, people are saving $479.20 per month”
(Source: The State of Remote Work.)
PNG 🖼
Machines think about floorplans very differently. (Source: Evolving Floorplans)
Marketing 101: AIDA
The beginnings of all things are small. —Cicero
Groms 🐣
Bloomscape, a company that ships live plants straight from greenhouses to customers’ homes, also just acquired Vera, a plant care app. They’ve filed a patent on parts of its plant packaging technology, and also use a proprietary soil mix.
It’s a clever solution to a pandemic-induced desire for foliage @ home. Searches for ‘best plants’ spiked after March lockdown.
Good Buy Gear closed a Series A round for their ‘recommerce marketplace’ of gently used but outgrown baby gear.
“The streamlined review and verification process is what makes Good Buy Gear unique”
Don’t tell me what you think, tell me what you have in your portfolio. —Nassim Nicholas Taleb
My latest investments & trades
Buy & Hold Investments (I will hold these forever)
This section is only available for contributing subscribers. If you’d like to trade and invest along with me, consider one of the paid tiers!
Swing Trades (1-3 month time horizon)
This section is only available for contributing subscribers. If you’d like to trade and invest along with me, consider one of the paid tiers!
Barrels 🎯
Winning trade of the week
Scaled out some profits from $OPK (Opko Health Inc) for a ~40% gain
Portfolio Highlights
🚀 $TWLO and $ETSY continue to move. Holding a solid position in each, even after shaving off some profits. Super long these two.
📈 BTC price cleared $11,000 after spending quite some time hovering in the mid-$10ks, following news of Jack Dorsey’s official investment in bitcoin as part of Square’s balance sheet
Pods & Schools 🐬🐠
Book Reco: Spent: Sex, Evolution, and Consumer Behavior by Geoffrey Miller.
“Personal ‘ownership’ is just a way of renting things from the universe for a human lifespan, or less.”
Podcast Reco: Modest Proposal – Better, Cheaper, Faster: Why Companies that Reduce Friction Win [Invest Like the Best, EP.193]
“When companies significantly reduce the frictions for users (requiring less effort, time, or money from the customer to get what they want), it often unlocks enormous, non-linear changes in behavior.”
Tools of the Trade ⚒
Products I use to make money
Wealthfront. ~25% of my portfolio is in Wealthfront, which since 2016 has netted me a time-weighted return of ~39% (~35% money-weighted), all while harvesting tax losses like the pros do.
Use this special link to get your first $5,000 managed for free: https://wlth.fr/2ephpyb
StockCharts. I easily make back the small monthly subscription fee with the superpowers it gives me. If you want to trade smart, you’ll need it.
Carrd. I used it to create markmulvey.com, surfreport.email, and I’m using it now to build websites for paying clients. Use this link or referral code 892PYX69 to start your own web empire.
Cointracker Track your coins like you track your stocks, complete with all-time return (absolute & percentage) by coin and cost-basis.
Hypefury. I use Twitter to connect with people who eventually become friends, colleagues, and customers. Hypefury is easily the best tool out their for growing a quality Twitter following.
SPONSOR
Sforzo Audace is my own company—the lifestyle brand for renaissance men. (I’m an advocate of ‘being your own sponsor,’ but if you want to advertise on here too my DMs are open)
I was tired of needing to own a different bag for work and weekends, so I created a “renaissance bag”: the one men's everyday carry that dresses up, dresses down, and will never go out of style. It’s half the price of designer brands and gets twice the usage. I bring mine everywhere and keep getting compliments. “One can do much.”
Surf Report subscribers get an extra 20% off with the discount code SURFREPORT at checkout
Disclaimer
Nothing in this email is intended to serve as financial advice. Do your own research.