edition-6-personal-finance-investing-newsletter

Edition 6: Bitcoin Skeptics, Win by not losing, Unclaimed Money, PSTH, and Cryptoassets

You’re reading my newsletter about psychology and money. If you missed a week, you can check out the archives here.


Some random personal updates. I did an Annual Review Workshop and it was immensely useful to see themes from 2020 and allow new goals to emerge for 2021. I’ll be sharing my Annual Review takeaways next week.

In the workshop I saw the power of Notion, a new productivity tool that could help me organize my life. It feels like Airtable + Evernote all in one. If you have tips specifically around building a writing process (research -> writing -> publishing) in Notion, holla at me.

Speaking of which…I finally solved the email mystery. It’s all about a weird thing called MX records, and it turns out the problem was with my host, Siteground, not Mailchimp.

I’d love it if you reply to this email to tell me about your Annual Goals. Or favorite dad joke. And if the email gods still shun me, you can always Tweet at me or use my AMA page.

Now onto this week’s reads…


Bitcoin Skeptics: here’s the story you’re missing

When I talk to Bitcoin skeptics, their arguments tend to center around the following points:

“Bitcoin is not backed by anything real”
“Who uses Bitcoin anyway?”
“The price of Bitcoin is too volatile”


In this new post, I don’t argue against those claims. I point to another way to look at Bitcoin — that it’s essentially an alternative financial system outside of traditional networks.

bitcoin-skeptics-arguments-value-cryptocurrency-alternative-finance

I talk about why this is a big deal, and why investors in Bitcoin are essentially investing in insurance in case the world goes terribly wrong—like what’s happened in Venezuela.

Read: Bitcoin skeptics are missing this story

I plan to cover more questions about Bitcoin in future articles.

If you have a question or ideas about cryptocurrency, hit Reply and talk to me. I welcome all opinions, including dissenting ones.

💡 Idea: Win by not losing

Warren Buffett’s rules for making money: “Rule #1: Don’t lose money. Rule #2: Don’t forget rule #1.” 

Protecting the downside is a compelling principle that applies across multiple domains.

  • To start weight lifting, the first rule is not to do some fancy program, but to not get injured.
  • To create a successful diet, remove the most disastrous foods.
  • To have a long career, try not to burn out by working too hard.

Investors get blind to the message of “don’t invest more than you can afford to lose.” It’s worth rehashing good principles in a new light.

For me, win by not losing means staying in the game long enough without being wiped out. In whatever “game” of life whether that’s career or investing, I want to optimize for game time over high scores.

📊  Stock I’m following: PSTH

Disclaimer: I hold shares of PSTH

Pershing Square Tontine Holdings (PSTH) is a SPAC stock, which means it’s a publicly listed company looking for a company to buy. It’s the biggest “blank check” company so far at a valuation of $5.8 billion, so whatever it acquires will be a huge business.

This SPAC is run by investing giant Bill Ackman, who’s previously done a successful SPAC taking Burger King public through Restaurant Brands (QSR).

Basically, buying PSTH means investing in Bill Ackman’s ability to picking the right company to merge with. Compared to other SPACs, PSTH seems to have some investor-friendly features:

  • Pershing Square is not taking any founders shares, and will be investing over a billion dollars of its own money. >>>Shows high conviction
  • No management fee, no compensation to the sponsor until after investors have received a return. >>> Shows good incentive structure
  • PSTH will look for a company with a simple, high-quality, high return on capital business that generates predictable growing cash flows that can be estimated within a reasonable range over the long term. >>> Shows predictability.

I like the incentive structure of this SPAC helps investors protect the downside – at least more so than other SPACs I’ve seen. You can read more about Bill Ackman’s SPAC here.

💸 Money tip of the week: Find Unclaimed Money

Use Credit Karma’s Unclaimed Money tool to find money that’s potentially owed to you. Businesses have to report these unclaimed $ to your state if they’ve sent a refund or unclaimed funds, but were unable to reach their customer (riiiight).

I was surprised to find $330.66 that was owed to me. Thanks Credit Karma…and wow Safeco, really? I was an active customer of theirs when I found this “unclaimed money.”

By entering your state in Credit Karma, you’ll get redirected to your state’s website. If you’re in California, you can just use this link to use the State’s Unclaimed Property Search tool.

📚 Book highlight: Cryptoassets

If my article has helped you turn from Bitcoin skeptic to crypto curious, then you might be wondering about how to invest in cryptocurrencies. Cryptoassets is a great book with principles on how to evaluate the thousands of cryptocurrencies available on the market.

to be an innovative investor, you’ve got to do more than glance at a cryptoasset’s valuation; you must consider its white paper and decentralization edge as well. Three more things an innovative investor will consider: community, developers and issuance model.

Most of the attention in crypto goes to Bitcoin, so the general public doesn’t necessarily know that every cryptocurrency has its own unique features, supply, and technology. Some are amazing; some are trash. Looking at the developer community is a shortcut to gauging a crypto’s chances of success:

A trustworthy cryptoasset will be situated within a trusted community and backed by competent developers. In other words, the people working on it should be experienced, and the asset’s community members should be engaged, either investing in the asset or working as miners.


End Note

If you’re enjoying the newsletter, I’d love it if you shared it with a friend. You can send them here to sign up. I try to make it a bright spot in your inbox each week, and hope you’re enjoying it.

Should you find anything interesting this week, slide into my DMs. I love finding new things to read through my online community. Also, if you have any question (within reason), hit me up on the Ask Me Anything page.

Until next time,
Oz


I’m just a guy on the internet with an opinion, so please just treat my content as entertainment. My content is may contain referral links to products I use or love. My content is for informational purposes only, and you should not construe any such information or other material as legal, tax, investment, financial, or other advice. 

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