March of the Pengus

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March of the Pengus:

Punks and apes and penguins. Oh my!

Just when you thought non-fungible tokens (NFTs) were dead, volume came storming back this week with the march of the Pudgy Penguins (or “pengus” to those in the know). It truly is an NFT summer.

Not familiar with Pudgy Penguins? Neither was I until I started seeing thousands of them dominating Twitter avatars, memes, and in my mentions this week.

Pudgy Penguins are the latest community NFT creation making waves in social circles. Each one comes with unique traits, including shirts, scarves, glasses, hats, and different hairstyles and backgrounds. There are 8,888 of them roaming the vast ocean on OpenSea—one of the leading NFT exchanges.

As you can see from the 7-day volume, they’ve overtaken some of the previously popular creations such as Art Blocks Curated, CryptoPunks and Bored Ape Yacht Club. About 17,000 ETH ($54 million) worth of pengus traded this week which means the Fed needs to raise rates immediately.

The floor price for a penguin is currently 2.8 ETH (~$8,888). The floor price is the lowest price for collection items, rather than the average item price, and is updated on an hourly basis.

What’s intriguing to me is how quickly these NFTs rose in price. Many of them were minted in the past 2-3 weeks with prices ranging from 0.01 ETH to 0.1 ETH. So even at a paltry sale price of 1 ETH you could have made anywhere from 10-100x or more on your investment in the past few weeks.

Take a look at the top 4 pengus filtered by the highest last sale. On Monday, #6873 sold for 150 ETH (~$500,000) and has already been relisted for 500 ETH (~$1.66m).

The question on my mind: Are NFT enthusiasts buying these because they see them as collectibles with some sort of intrinsic value, an investment, a status symbol, or all of the above?

I don’t know the answer but as long as people are having fun and making money who cares? Of course, there will always be buyers who purchase the top of the market (bubble) and will either be forced to sell at much lower prices once the fervor wears off or be stuck with a very expensive JPG that they can use in their NFT house in the metaverse.

Similar to the recent meme stock mania, buying and selling NFTs is a concept that is difficult for finance traditionalists to wrap their heads around. It’s also quite obvious to see the resentment and coping on Twitter when someone shares that a squiggly line or a digital rock that looks like it was drawn by a 6-year-old sells for hundreds of thousands if not millions of dollars.

Maybe my next move is to run a crowdsourced NFT portfolio. Stocks are too boring. As I told my wife “It’s art. You wouldn’t get it.”

Performance Update:

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

We gave up a few bps this week as 7 out of 10 stocks in our portfolio were down. The market didn’t seem to care, with the S&P 500 closing at another fresh all-time high (the 48th this year) on Friday and capping off a 4-day win streak.

Coinbase (COIN) traded up slightly on the week after reporting earnings and beating on top and bottom line. COIN hit a 3-mo high after reporting earnings but had a volatile week after the crypto provision in the bipartisan infrastructure deal was blocked by the Senate.

On Friday we voted Square to remain in the portfolio for another 10 weeks. Square continues to be one of our two biggest winners of the years, currently sitting on a 25.73% gain.

NVIDIA (NVDA) is on the chopping block next week for the 3rd time. We’re currently holding onto a 47.16% gain over the past 29 weeks. This is our biggest winner of the year. They are set to report Q2 earnings on Wednesday 8/18, so we will be forced to sit on our hands and watch before the Friday vote.

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:

• Nvidia (NVDA) Earnings Expected to Grow: What to Know Ahead of Next Week's Release (Zacks)

• Coinbase crushes Q2 earnings (Yahoo)

• Amazon Launches $1.5B Airhub (Amazon)

• Amazon’s Failing To Squelch Shopify’s 57% Growth (Forbes)

• Penn National (PENN) Strengthens Partnership With Everi Holdings (Yahoo)

What Else We’re Reading:

Blogs/

Articles:

1. Hanging By A Thread - Morgan Housel (Collab Fund)

2. Americans' Life Ratings Reach Record High - Dan Witters and Sangeeta Agrawal (Gallup)

3. Smart Cities, Bad Metaphors, and a Better Urban Future - Adam Rogers (Wired)

Books:

Think Again: The Power of Knowing What You Don't Know - Adam Grant

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

Tweets of the Week: