Hustle Capital // Intel // Dec. 23
Man, we were soooo close to understanding the whole Web3 thing
What to make of Web3?
@Jack kicked the tech utopian hornet’s next by describing, in very simple terms, the goal of most first movers in technology: promising transformation and owning as much of the picks, shovels, and land as possible.
What the ensuing argument fails to grasp is that it’s nearly impossible to put a high gate around something that’s built to be decentralized. There’s way way way more to the argument than that, so we’ve compiled a handy list of resources for both sides of the argument:
a16z’s Web3 Landscape doc is a good starting place
eth.org: Web2 vs Web3 breakdown
Tim Ferris + Chris Dixon + Naval Ravikant on the Tim Ferris Show
Bankless: How Kevin Rose Invests in Web3
Very strong analysis and counterpoint from Alex Wilhelm: Bitcoin is Religion, web3 is greed
And Stephen Diehl is the Internet’s consummate digital assets critic
Public Markets
Interest rates are in a strange place. In a typical environment, government bond yields steadily increase as you look further on the yield curve.
This makes sense if you think about it. If you’re loaning out your money for a longer time, you’re going to want a higher return. Covid-19 and the Fed’s buying of Treasuries has massively disrupted interest rates and the state of Fixed Income. As of this writing, you get paid 79 bps more to hold a 10yr US Treasury than a 2yr US Treasury (0.68% vs 1.47%). Here are three converging factors that we’re watching:
Coming out of Covid, Central Banks around the world are increasing short term rates which is pushingn up the short side of the curve
Inflation is running hot everywhere you look. Inflation was recently published as +6.8% YoY. Why would you buy a bond that would pay 1.47% for a decade?
Each Covid wave has people running to the safety of long-dated gov’t bonds. This means that the yield curve keeps getting flatter and flatter.
This is like a coiled spring and as you can see from this tweet from Daniel Lacalle, the spring has only gotten more compressed recently and how Covid is affecting rates:
Private Equity
Private Equity Real Estate fundraising and dry powder are approaching all-time highs. Preqin clocks dry powder at $287bn, while Real Capital Analytics has reported record dispositions of $614bn for the year.
Deals: Vista Equity has acquired an interest in Salesloft, valuing the company at $2.3bn.
More deals: Secondaries deal volume is projected to be $113bn for 2021. The rush of deals covers everything from GP-led transactions to pre-IPO (buying out early employees of a startup before it goes public) and portfolio spin-outs. The denominator effect is driving much of this activity.
Us at 25
Having recently been through brief a job interview process with a startup, we’ve been thinking a lot about the largest asset we have: our time & future labor. When you’re early in your career, every role you take is a massive bet….on the company you join, the product it sells, the market it sells into, your ability to add value and even your boss and the people around you in the organization.
Here are a few questions you should be asking if you’re looking for your next role?
Is this company growing? If so, what’s making it grow?
Do I think people will have more or less use for this company’s products in a decade?
Once the new job honeymoon is over, what will keep you motivated? Do you have equity? Does your compensation plan offer bonus/commission/incentives?
Does it feel like you’re being interviewed to fill an empty seat or that the team is looking for someone just like you?
If I ran into a friend at a restaurant with this person who is looking to hire me, would I be excited to introduce them
Curated Content for You
Trying to get smart on investing when the markets turn red? We wish we were that far ahead of the curve! Here are some good recent resources to help you on your journey:
Michael Mauboussin on Barry Ritholtz’ Masters in Business Podcast discussing How to Read Stock Prices (and the nuance of valuation techniques)
Last week’s Animal Spirits (ep. 325) also deals with valuations, but through the lens of Growth vs. Value
This Masterclass from Warren Buffet on the Miracle of Compounding.
Data, data, data
RT @robey_kaitlyn: Value Investing Still Beats Growth Investing, Historically #Growth #stocks replug.link/094a0f90 follow @meDeepakJain #medeepakjain #entrepreneurshipwithdeepak #stockmarket #sensex #nifty50 #nse #bse #meenuvatika