Investments Trade Log

[Henry]

I don't understand NFT's but my thought about them within the context of collectibles is that they will not suffer degradation so there will be no taxonomy of condition. This will remove both the hype and rarity of finding a "mint" NFT in the future similar to finding a "mint" Honus Wagner baseball card.

[giskard]

I don't understand NFT's but my thought about them within the context of collectibles is that they will not suffer degradation so there will be no taxonomy of condition. This will remove both the hype and rarity of finding a "mint" NFT in the future similar to finding a "mint" Honus Wagner baseball card.

I don't believe they are directly analogous to collectors items like baseball cards.

They are more like membership to a club that is in fixed supply and can only be purchased from someone else on the open market. If the club is valuable very few people will want to sell. If they happened to have two they will sell one but retain the last one to preserve membership. Blockchains are of course public so you can show this off as social clout. This feature can drive the prices extremely high into unbelievably parabolic moves.

The successful NFT projects I have observed over the past several years are the ones with cult like followings that can wield the attention of it's members and onlookers, or its founders are doing things to continually drive interest and attention.

They are something else from existing kind of assets that I have seen.

[giskard]

@giskard

As with all currencies and investments you have to have someone once you sell to whom it is more valuable than when you bought, and in this case I just don't see it.

I put my reasoning together in the previous comment but to summarize and re-iterate - because the individual collections are high priced and in small supply and it confers group membership that publicly visible for use as clout this is actually quite reflexive. You can get the biggest parabolic moves on assets of this nature. As long as you don't personally buy into the cult yourself and are willing to sell the top you can profit.

It's my fundamental belief that as a social species ~90% of the value of all assets is social in nature. The more we move online and become a nearly instantly networked species the more opportunity there is to ride these social/financial waves.

This is, imo why you always see bubbles form faster and build higher in asia, since the culture is more collective and communal.

[Seppia]

In other news, BLV sec yield just hit 5% today. With all the overvalued, often money losing stuff going for insane valuations today, I think one could do worse than park their money into the world’s reserve currency long term bonds at yields 2% above inflation.

One underappreciated thing is that due to bond convexity (yes I said it), further 25 basis points moves up will have less of an impact VS what they had back when everybody loved LT bonds at negative real yields

[giskard]

Cameco (CCJ) just broke out again today. Its idk a 10 year high? What are we thinking about uranium now?

[Lemur]

Gamestop going bonkers again. Up 74% yesterday. Up 134% pre-market now.

[jacob]

Gamestop going bonkers again. Up 74% yesterday. Up 134% pre-market now.

Apparently roaring kitty (the original reddit promoter) came back. There's a documentary with him on netflix.

[jacob]

DJIA touched 40,000 for the first time.

[Seppia]

With markets being so high, I am surprised we aren’t hearing about the “I invested in the stock market and I am retiring at age 11” crowd.

[2Birds1Stone]

With markets being so high, I am surprised we aren’t hearing about the “I invested in the stock market and I am retiring at age 11” crowd.

Is it that high? We're up ~10% from the November 2021 highs.....

[jacob]

Is it that high? We're up ~10% from the November 2021 highs.....

But 210% from March 2020 lows! Anyone who started a 5 year ERE journey back then would already be done by now.

Anyhoo, to say whether the price is high requires comparing it to something else rather than itself in the past (because you can pretty much get any relative number you want by selective date picking). The SP P/E ratio is currently at 27+ and it hasn't been this high during a bull market since 1998. Meanwhile, earnings keep cranking up higher and higher, as (nearly) always.

What's still interesting is how many still think that the economy sucks. However, if you survey them in statistical detail (as opposed to anecdotal tiktok complainypants), they'll conclude that
1) People believe that they're personally doing well in this economy.
2) They believe the economy of the state they live in is also doing quite well (regardless of which state you ask people in)
3) They believe the economy of the country as a whole is doing poorly.

Obviously not all three can be true. This suggests a fundamental mispricing and an opportunity if you can figure out which of the three beliefs are false before everyone else does (insofar they do).

[Seppia]

The market is richly valued in terms of P/E, CAPE etc. There isn't even the older excuse that "there is no alternative": one can get 5% from cash today.

Regarding the economy, I think what Jacob is observing is textbook case of money illusion. All the consumer data I've seen (Nielsen, circana, trade reports) show a clear depremiumization trend and a cutback on most non essentials.