Everything Gets Boring In The End

Together with Masterworks:

Anti-NFT Platform Raises $110m and Achieves Unicorn Status

If you know anything about me, it’s that I love writing and researching unique investments. Luckily, in my line of work, those things go hand in hand but I digress. 

2 years ago, I found out about Masterworks, the revolutionary investment platform that securitizes multimillion-dollar paintings, and wrote a DD on them (will link below). 

In a world where jpeg art of penguins or rocks sells for millions, you’d think a company that claims to be an “anti-NFT” platform would be dead in the water. However, that’s the furthest thing from the truth. 

On Tuesday Masterworks announced a $110M Series A, valuing the company over $1 billion.

Trust me, ol’ Ramp knows talent when he sees it. I’ve believed in them from the start and have invested in several of their offerings. Hell, I’ll probably invest in a few more this week.   

They’re a unicorn company for a reason. They’re buying $400M in art this year and plan on purchasing $1B in 2022—which is presumably when we’ll all have moved on from the NFT fad.

Join me on Masterworks today.

My Deep Dive

Squid Game:

Last week I was scrolling through Twitter and saw an odd tweet from Joe Weisenthal. It was 8:40 a.m. on a Monday morning and it said just two words: “Squid Game”. Not being one to feel out of the loop, I quickly Googled it to find out it was a new show on Netflix. After watching the trailer, I wasn’t overly excited about it, but then a few days later I couldn’t stop seeing Squid Game memes littering my timeline. They forced my hand. I was compelled to watch it just so I didn’t feel left behind. I binged it in less than a week—which is quick for me.

For those not familiar with Squid Game, it’s Netflix’s newest viral series that is currently on pace to become their most popular show ever, having reached number one in 90 countries, including the US. Just imagine if Black Mirror, Hunger Games, Parasite, and The Purge had a baby—except that the baby was even more violent than their sadistic parents.

Netflix has surely enjoyed the memes and stock price appreciation since Squid Game was released in mid-September, hitting a new all-time high after essentially trading sideways for more than a year.

Squid Game is the story of debt-ridden contestants battling it out in a series of deadly children's games. The creator Hwang Dong-hyuk told CNN the show's narrative reflects the "competitive society" we live in today. "This is a story about losers," he said—those who struggle through the challenges of everyday life and get left behind, while the "winners level up." Sounds familiar.

Now, I’m not one to try to find and discuss hidden symbolism and allegories from the shows I watch just to relate them to a timely finance topic. However, there was a quote that stuck with me during a critical scene in the last episode, when two of the main characters were discussing the outcome of the games.

The creator of the games said:

“Do you know what someone with no money has in common with someone with too much money? Living is no fun for them. If you have too much money, no matter what you buy, eat, or drink, everything gets boring in the end.”

The simple counterargument to that statement is: Are you actually going to compare someone who has too much money to someone who has nothing and say this commonality of not having fun while living unites them? No. That would be foolish. Being rich and bored is surely better than being poor, right?

It depends on what gives you peace and joy and fulfillment in your life.

For the less financially fortunate, they will derive fulfillment from their personal relationships, which appeared to be a key theme in the show. Some were playing the game because of greed, some were playing to bring their family out of poverty. The ones playing because of greed did not have those close personal ties.

For the rich who have a materialistic mentality, it’s the hedonic treadmill that can make living no longer “fun”. It’s the chase. The more is never enough mindset. As we collect and consume more things, our expectations and desires rise in tandem. The gain in happiness and pleasure is relative, not absolute. We’re always searching for more.

There are some other underlying capitalist and class warfare themes in this show and I’d recommend it for those who aren’t squeamish from a little (a lot of) violence.

Performance Update:

Now let’s see how the People’s Portfolio did this week…

The markets popped a little this week but sold off on Friday on the heels of a poor jobs report. As reported on by Barron’s:

First of all, while the 194,000 jobs created was disappointing, the September jobs report is also just a first draft that will be revised in months ahead, just as July and August have been, and both those months saw additional jobs created, with July rising 38,000 to 1.053 million, and August increasing 131,000 to 366,000. So even with a disappointing September, the third quarter saw 1.613 million jobs created, or more than 500,000 a month. That’s not too shabby.

Meanwhile, the unemployment rate, which fell to 4.8%, was most certainly not disappointing, even if it was largely the result of a decrease in the size of the workforce. The household survey, which is used to compute the unemployment rate, meanwhile, showed an increase of 526,000 jobs, also not too shabby.

Even with the weakness on Friday, October continues to see a strong start to the month which was a nice reprieve to the malicious selling in September.

On Friday, as expected, we voted Amazon (AMZN) to remain in the portfolio for another 10 weeks.

Shopify (SHOP) is on the chopping block next week for the 2nd time. We’re currently holding onto a +10.89% unrealized gain over the past 19 weeks.

Keep an eye out for the new Twitter poll every Friday. Follow along in real-time with nearly 300,000 others on Public.

Portfolio News Highlights:

The biggest stories affecting our portfolio this week:

• Coinbase scores first 'Buy' rating as stock sags, but here's why the future may look brighter (Yahoo)

• Nvidia Is Making Concessions to Get Its ARM Deal Done. Now We Wait for the Regulators. (Barron’s)

• Square stock is a 'must own' given long growth runway, says Jefferies (MarketWatch)

• Affirm (AFRM) Shares Gain on Its Partnership With Target (Zacks)

• The Economy of Canada: An Explainer (Investopedia)

What Else We’re Reading:

Blogs/Articles:

1. Americans Have More Than $460 Billion in College Savings Plans. It’s Not Enough - Alexandre Tanzi (Bloomberg)

2. A “Reversible Rust” Battery That Could Transform Energy Storage - Alex Fitzsimmons, Rich Powell and Mitch Kersey (ClearPath)

3. There's More to Investing Than Just Risk and Return - Christine Benz (Morningstar)

4. Bombshell: pirate wires #54 // instagram's suicide farm, media distortion, and navigating three weeks of facebook hysteria - Mike Solana (Pirate Wires)

5. Web3’s Great Gambit: Incentives for the Almost Impossible - (Dark Star)

Books:

The Cold Start Problem: How to Start and Scale Network Effects - Andrew Chen

Need new reading material? Visit my Amazon page for my most purchased book recommendations.

Tweets of the Week: