[VIC 82] Don’t be a dummy. Owning vs renting. Coming together and falling apart. OfferUp

Business & Money: don’t be a dummy

I came across an incredible quote this week from Howard Lindzon that went as follows:
“I am always willing to let an investment become a trade and try not to let a trade become an investment.”
Before I touch on why I love this, here’s some background. The price of Ethereum has recently been falling. In response, Howard bought the dip with the idea that the price would likely bounce and trend higher over the long run. When it did, jumping from $140 to $240 in one week, he sold off some of the position to capture some of the profits.
With that context, Howard’s activity looked like that of a trader. When the price dips on an asset, and the trader can’t figure out why, they might buy the dip to capture a short term gain. This idea, however, flies in the face of how Howard previously has spoken about crypto investing. He’s been quoted as saying that he views this asset class as a long term play, similar to a venture capital investment. So why sell to make a quick buck if you’re taking a long term approach?
The idea is actually quite simple if you really think about it. If an investment gives your a return in 1 week, that you would otherwise be happy with over two years, it’s ok to take some money off the table.
I bought into Ethereum at $30. When it hit $300, I took some money off the table.
I bought into Bitcoin at $330. When it hit $2,000, I took some money off the table.
I bought Nvidia at $60. When it tripled in a year, I sold off most of the position.
When things are going well, it’s tempting to get greedy and keep pushing for more. But we live in an unpredictable world and we’re in the midst of one of the longest bull cycles on record. Don’t be a dummy!

Human Progress: owning vs renting

When I was 13 or so, I was obsessed with amassing a massive DVD collection. Anytime I went to Blockbuster to rent a movie, I would stop by the $5 box to see what I could add to my shelf. Then Netflix came along.
Remember that massive binder you used to drive around with that held all of your CDs? Add a 6-disc changer and now you can really stunt! Enter iTunes, and now Spotify.
One of the happiest days I can remember was buying my first car. I took the morning off of school on my 16th birthday to be sure I got my license at the earliest possible time and hit the road. I ditched my car in 2013 for Uber + public transportation.
Perhaps the single most tectonic shift in the economy that I’ve seen during my lifetime has been the shift away from owning towards renting and subscriptions. We ride in other people’s cars, sleep in their beds, and stream what ever type of media we’d like to consume. And all without buying anything.
The question I have is, where does this stop? As technology reduces friction and makes renting/subscribing, insteadย of owning, more practical, I wonder what personal and cultural preferences will prove too strong a counterbalance.
You probably thought the idea of sleeping in a stranger’s bed was gross 10 years ago, but Airbnb has made that normal and culturally acceptable. Right now, I’d say it’s pretty gross to think about sharing clothing. What if, instead of packing clothes, I could show up at a destination with fresh fits waiting for me in my hotel/AirBnB. Probably viable, but not sure about underwear and socks. Perhaps that too will change over time.

Philosophy: coming together and falling apart

Everyone knows about the Big Bang. It’s that theory of the universe’s birth that states that some 14 billion years ago the universe was this infinitely small, dense, hot place. Then a massive “explosion” tore things apart with unfathomable energy, creating all matter and hurling it in all directions at once.
Despite the evidence of cosmic background radiation, constant expansion, and the like, I don’t like this theory. Now I’m no cosmologist or astrophysicist and don’t purport to understand this topic at a deep level. Rather, I don’t like the theory because it begs the question, what happened before the Big Bang?
In talking about the birth of the universe, I can only apply the conventional meaning of the word “birth.” Babies are born, but you can explain what happened before. Sex, fertilization, gestation, and all that jazz. So the “birth” isn’t really a beginning in any real sense. Companies and ideas can also be born, but after a period of critical thought, amassing knowledge, etc.
So, coming back to the universe, my simple mind has difficulty conceptualizing what is meant by the “birth” of the universe as suggested by the Big Bang.
As such, the theory of the universe known as the Big Bounce makes much more sense to me. This is a hypothetical model of the universe that describes a cyclical process wherein the universe goes through constant expansion and contraction. So that big “explosion” referenced in the Big Bang, that was actually the result of the collapsing of a previous universe (the “bounce”).
And this second theory seems to follow the model that all other processes, both biological and not, follow.
Tides come in, and they go out.
Organisms are “born” and they die.
The planet freezes, and it thaws.
Empires rise, and subsequently fall.
All things seem to come together, then fall apart. They come together again, and then they fall apart again.

My Latest Discovery: OfferUp

The lady and I have increasingly been using OfferUp to buy used goods from local people. It’s basically Craigslist, but better. Since you have people tied to a profile and email address, you get real identity, and thus, more safety in the marketplace. It’s also mobile friendly allowing you to easily transact from your phone.

  • ilikedonuts

    I love the idea of renting vs. owning and am glad it has taken off in many unique forms. I think uniquely to a New Yorker, we simply have so little storage/closet space that it is necessity for us to find ways to consolidate our belongings and generally keep up with reducing clutter in small spaces.

    I just stared using Rent the Runway to a) treat myself; b) shed closet space and c) reduce the amount of clothes I buy and then discard. I can also have items delivered to my hotel when I travel and return them while on vacation to reduce my luggage upon return!

    As I thought a bit more about models like rent the runway or zipcar, I think these sharing companies offer a way to also reducing waste-think about how much waste goes into that outfit you wore once and never will wear again. Or how many fewer cars are manufactured or on the road. Clothes and cars are also great examples bc they get dated so quickly. By using shares, you’re reducing waste by generating less, but optimizing use amongst people.

    Not sure if an underwear-share will ever take off (though it’s catchy…), but I’m interested in seeing what future “sharing” opportunities people imagine.

    • Andy

      The Equinox at Rockafeller Center actually offers free gym clothes for your workout – including socks and underwear. All the guys at the gym are in these uniform gray shorts and gray shirts, along with I assume uniform underwear. It’s a little weird, but seems to have caught on to the point where I don’t see that being a non-starter in the future!

      • Interesting. That was the case in college at NYU as well. Before a workout, student athletes could get shorts, shirt, compression shorts and a towel so I don’t think it’s as gross as one might think at first.

    • I too live in NYC so I hear you. It’s definitely more top of mind here than it is elsewhere.

      The underwear share thing was in jest, but I’m sure there are countless ideas that have yet to come to market. Things like lawn care equipment, tools, sporting goods, camping equipment etc.

  • Ben Clinger

    Great letter Jerm. Gracias.

    But, doesn’t the evidence of a universe expanding at an accelerated speed fly in the face of the big bounce theory? When does the contraction come into play?

    I guess one idea is that time itself started at the Big Bang, so there was no “before” the Big Bang. If you think of time as just another dimension or property of our universe as general relativity would have us believe then that becomes more intuitive.

    • From a scientific perspective I have no idea. There are a lot of theories from theoretical physicists. One of which deals with the fact that many dying stars collapse in on themselves to form black holes. Over time as these continue to devour matter ,they become increasingly massive with increasing gravitational pull. One could imagine over time that some of these black holes would collide and eventually consume everything (thus a contraction).

      Any yea, scientists generally say that all of the laws of physics including the constants (e.g. speed of light) break down at the moment of singularity before the bing bang.

      Again, I have no idea… lol.