Prathik Desai | Token Dispatch 📧 @CrypticPD

Since CPI is either going to be a clearing event or a thanos snap event, I figured it might be a decent time to be helpful. If you’re relatively new to investing, then you’re bound to learn about what happens when your portfolio goes down. Now, this is coming from someone who’s portfolio is up a paltry 20% YTD and hasn’t been gunning it on risk recently. Although also someone who’s been trading and investing their own money for the better part of a decade and has managed to not go bust (except for one, very painful time early on). If you’re constructing a portfolio it’s important to realize it is its own position rather than a collection of positions. A stock is not just a company but the sum of its valuation, shareholder base, its sensitivity to liquidity, crowding, financing/rates and its catalyst calendar. High beta stocks are often five different trades in one ticker. You should always have a working idea of your “tilts”. Does your portfolio go up/down more if tech rallies, if certain countries outperform, if a specific thematic is validated etc etc. In general, you should not have a portfolio of 20 different stocks that all act the same. You might think you won’t, but getting the value of your book cut in half will make you do stupid things. (As an aside, this is also why even though buying the dip is generally a good strategy, progressively buying the dip early into a drawdown can make you mess up at the exact lows.) High beta stocks come in all shapes and colors but in general they are selling the distant future. In good markets, the time out to that future is cheap. In bad markets, you start paying rent. That rent tends to appear as a lower multiple even while estimates stay the same. A lot of times people will tell you the only thing that matters in a drawdown is “is the thesis intact?”. That’s one aspect, the other two are “how have expectations changed?” and “did you size like an idiot?”. Don’t average down just to improve your cost basis, the market doesn’t care about your cost basis. Only add if you can truly underwrite the expected return improving, and that means taking a view that goes beyond a default return to multiples that may be unsustainable. Price can become a fundamental and technical sell offs can manufacture fundamental problems - reflexivity cuts both ways. The best question you can ask yourself in a drawdown is “from here, what is the range of outcomes and what’s the best use of the next dollar?”. If early in a drawdown you note that every time one sector goes up your portfolio goes down, it could be a decent idea to add exposure to that sector. The ultimate goal is not to avoid every drawdown but to make sure no single drawdown takes away your ability to act on real opportunities when they arise. No amount of truisms will help make anyone a better investor, but there is something you can do right now. If this is one of your first few drawdowns, you can observe how you react. Take notes on it. Find out what mistakes you make and then optimize your portfolio, sizing, strategy etc to compensate for those shortcomings. It’s a lot easier to do that than try to fight your own psychology - and anyone who pretends there’s a one size fits all answer to that is lying.

@0xSammy Great piece. DMed you with some thoughts.

Whether this restores belief or confirms the fear is the question that we answered in my piece for @tokendispatchhq thetokendispatch.com/p/stretched-to…

The moves map the stress we outlined yesterday, including the cash drain, the dividend trap and the confidence crisis. Selling BTC to pay dividends and hiking the rate is going to be a tricky combo.

Just as I wrote my piece on STRC's 26% fall from par, @MicroStrategy responded with a $1.25B formal BTC Sales plan. It also announced a full capital framework overhaul -Cash reserve up at $2.55B (~17 months' coverage) -Dividend hiked 50bp to 12% -Repurchase programs of up to $1B each for STRC and MSTR The "never sell" era is officially over. 🧵

@JayaGup10 interesting piece, Jaya. DMed you with some idea. Please check

@MiyaHedge great read, @MiyaHedge. DMed you with some ideas. Please check

@0xjayeshyadav Interesting read. DMed you.

You are not what you achieve, you are what you are afraid to achieve

Vaidik @vaidikmandloi

2 months ago

You are not what you say, you are what you are afraid to say

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Some of the most interesting things in crypto right now like AI inference products, stablecoin infra, fintech lenders, move uncorrelated with how BTC is doing. Their revenue doesn't reverse in a drawdown because it was never a function of crypto token prices.

The funny paradox about becoming a great writer is that each time you learn more about writing, the learning gets you both farther from, and closer to, becoming a great writer.

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What kind of crypto card you use is no longer a moat because they all offer similar cashback and rewards. Cards that now own layers across the stack underneath the swipe are the ones that stand out. @raincards gets this. It earns from every swipe thanks to its vertical integration across the infrastructure stack. @CrypticPD writes more on this here 👇

Unpopular thought: Humans complain about AI taking away jobs because, like every other technological breakthrough, AI is forcing us to evolve, reinvent and go out of our comfort zones to differentiate ourselves from robots. That's what is more unsettling - to adapt.

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What do institutions need in a chain for them to consider it seriously? @gluk64 joins us to talk about how @zksync is going after 5,000 banks with Ethereum as their moat.

The same reflexivity explains how investors' perception of stock markets shapes their investments; these decisions, in turn, shape companies' decision-making, which then impacts the markets. The loop continues. Explains why the alpha is in understanding human behaviour.

I read something (will reveal the source at the end of the post) yesterday that changed how I see the power of human perception. Most relationships in the world that involve a human being and a scientific/factual aspect will never be a clean, one-sided cause-and-effect relationship. They will always be reflexive and cyclical. This idea perfectly explains how manifestation works. I don’t think there is any factual, reasoned science that backs manifestation. It’s simple social-science at play. Here’s an example… When you act confidently in front of the world, the world perceives you as confident and authoritative. The same perception then drives you to act more confidently and be someone with authority. This cyclical loop feeds on itself. Got lost in this beautiful thought while reading about how George Soros talks about reflexivity in his book, The Alchemy of Finance.

The more you read what contradicts your opinions, the better your chances of becoming a strongly opinionated human.

@ranjitups me cannot drive a classic लाल परी

The world is really funny… People want to be rich, but don’t want to learning how finance works. People want to travel, but the only ones that really get to see the world are their phones and cameras. People want to upskill, but they don't want to go through the grind of doing, falling and learning. People want to become wise, but they seldom want to critically question their own biases.