[VIC – 91] Overvalued is horse shit. ICO 101. Damn millennials. Don’t close your apps.

Business & Money

Early this year I sold my Tesla (TSLA) stock. It had gone up a bunch over the years and the markets were (are) feeling frothy, so I decided to cash in and walk away with the gains. Of course, it has gone up an additional 20% this year and I’m sitting here feeling like an idiot. That said, I’ve noticed a couple other things that I thought were worth sharing.
The first is that there are a couple of foundational pieces of technology that are large drivers of success for Tesla, one being the lithium-ion battery pack.

There are 7,000 individual batteries in one battery pack. And now, given Tesla’s success and a growing global consciousness about climate change, you have every other major car company saying that they will switch all models to electric, and thus lithium-ion battery packs, in the next 5-10 years (unless some other breakthrough comes from left field). So lithium will be in very high demand. If TSLA feels too risky for you as an individual stock, I’d recommend the Lithium ETF (LIT) which gives you exposure to the entire category (lithium miners, battery manufacturers, EV companies, etc) as a hedge against any one specific bet.
The other key factor I was referring to driving Tesla’s success is, of course, artificial intelligence, but I write ad nauseum on that subject here on VIC so I’ll leave it alone today.
The other thing I’ve noticed as a result of selling TSLA is that there is a lot of talk about the market and individual companies being overvalued. And in some respects that is true. If you use traditional valuation metrics like P/E, EV/EBITDA, and the like to compare a company to historic multiples in the category, then yes, the market is expensive. But what I’m realizing more and more is that there are a lot of things that aren’t captured in ratios and financial statements. If you look at Amazon’s filings, where is Jeff Bezos. He’s not on there. There’s no entry for “visionary CEO” on an income statement or balance sheet. There are no entries for durable competitive advantage or strong network effects. I believe it’s far more important to think about the fundamentals of the business, rather than a simple mathematical exercise, and why it will be successful in the long run. Most of the great companies of our day are always “overvalued.” My thinking has shifted considerably to take “overvalued” as a strong buy signal. Perhaps the term is just horseshit altogether.

Human Progress

I’ve gotten the question about how to participate in ICOs a bunch of times, so I figured it was time to write a quick blurb. For the uninitiated, ICOs (initial coin offerings) are a means by which startups and blockchain-based projects raise capital. In short, the company initiates a crowd sale of tokens (think Bitcoin or Ether, but specific to that company or project) to the public. This year ICOs have raised over $1 billion, with the largest individual sales raising over $200 million (Filecoin and Tezos have been the largest and most talked about).
So how to participate.
First, you have to acquire Bitcoin or Ether. The easiest way to do so is via Coinbase, the leading crypto exchange and wallet. You just open an account, connect a bank account, and purchase your token of choice. Keep in mind that, because this purchase happens via a traditional bank, the transaction will take a few days to settle. So if you want to participate in an ICO, you’ll want to purchase Bitcoin/Ether a week in advance.
Second, you’ll need to transfer your Bitcoin/Ether to a wallet you control. With Coinbase, you don’t own your private keys, so that won’t work. The way ICOs work is that you send tokens to a specified address, then a smart contract is executed and your desired tokens are sent back to your address. You need your private key in order to access those tokens. I use My Ether Wallet for this.
Third, participate in the ICO by sending your Bitcoin/Ether to the appropriate address. The company hosting the sale will provide the address where the funds are being collected during a specified window of time. Be careful here, though, because hackers and scammers will try to replace the correct address with their own, stealing any funds sent to their address, with no recourse. They’ve been successful to the tune of millions of dollars.
Last, and especially if we’re talking about considerable sums of money, you’ll want to store your tokens in a cold wallet, aka one this isn’t connected to the internet. Hardware wallets are best for this, with Trezor and Ledger being the most popular.
Hopefully this helped. Be careful out there!


I often write here on VIC about the positive effects of the internet and technology. But one not-so-positive side effect is that we increasingly live in a world of instant gratification. If you want to go on a date, just swipe right and viola! One date coming right up! Hold the awkward meandering up to a group of strangers in the park. Hungry? Not for long with Seamless or GrubHub at your fingertips. Feeling down, just post a picture to Instagram so everyone can like it and stroke your ego.
At every turn, it seems, every need can be met in an instant. The problem is, when it comes to important things like meaningful relationships or fulfillment at work, there’s no quick fix. Substantive interpersonal connections require a sustained and genuine interest in another person’s affairs. If you want to find meaning at work, there will likely be a ton of long hours, frustrating conversations, and uncomfortable situations. And while none of these are fun in the moment, I’d say they’re almost a requirement for anything worthwhile.
This might be the primary reason that people ascribe laziness and entitlement to millennials. You have an entire generation of people that are expertly trained in instant gratification. How you can you blame them (us) for expecting to get exactly what they want when they want it.
And what’s more, many of the needs currently met by technology were previously met by other people. Individuals look to social media for their self-esteem and their sense of well-being, instead of relying on friends and family. This likely leads to underdevelopment in communication faculties and an inability to cope with stress in effective ways.
What you have here is the perfect recipe for what I’ll call the millennial psychosis. And given that the pervasiveness of technology in our lives is sure to increase over time, the future looks rather bleak.
I wish there was some easy answer or magical cure, but there isn’t one in sight. That said, I AM a firm believer that making space in your life to be free of technology and instant gratification is a good start.

My Latest Discovery

I was recently speaking to a friend who happens to be an iOS engineer. As we were walking side by side, he noticed that I had pulled my phone out of my pocket, and was in the process of force quitting a bunch of apps to conserve battery life. He proceeded to tell me that this was futile. He claimed that the power required to reboot an app from scratch was likely equal to, if not greater than, the power used by an app sitting idle in the background.
I’ll have to fact check this one, but an interesting insight none the less.

  • Reid Moran

    I would argue the best way to obtain ether is to mine it 😉 I have a few rigs and have been toying with various pools and optimizing GPUs etc. Lot’s of fun so far. Still trying to find that killer app that really opens up a blockchain and makes it more real rather than mostly speculation. Seems as though the health industry may be the first big move, but will be keeping an eye on it!

    I like your thinking on the instant gratification, but perhaps this psychosis is only for those of us in flux… because we have seen both sides and dont know how to raise the younger generation who have only seen the new way of life. Maybe when they raise children they will be better equipped to deal with the psychological ramifications. There is no going back, that is for sure, and it will only get worse as time goes on. Human are nothing if not adaptable.

    Also, I can confrim the last thing. Closing apps is a thing of the past. Just like life without technology and instant gratification. Instead of fighting the future, we should strive to embrace it and learn to live in new ways while still learning to love and be happy. Leave those apps open and save yourself some battery! Think of it like a car at idle… leaving it at idle for a decent amount of time (sometimes up to 20-30 minutes depending on the car) costs less gas than starting it up again… though Tesla may change all that as well 🙂

    • First question, why are you up so early (or perhaps so late)? lol

      Interesting perspective about mining. I guess I was speaking more from the perspective of the average person that likely won’t be setting up a mining rig. But question for you: you hear so much about how energy intensive mining is. Is that really the case? Do you have to leave the rig running at home all day? Do you see a meaningful uptick in your power bill? Also, how intensive is it from a programming/engineering perspective? I’ve taken a couple entry level javascript and css/html classes. Is it relatively light weight to set up a mining rig?

      I’d like to think that raising kids might give people better perspective, but I fear that might be giving people too much credit. If people struggle so greatly to manage the effects of technology on their own lives, I’m not sure there’s any evidence they can do it with another person to care for.

      I love the analogy of the idling car. Thanks for confirming that!

      And thanks for the reply! My favorite part of VIC are the replies and thoughtful insights, so keep them coming!

      • Reid Moran

        early. was in greece for a wedding then italy for my moms 75th bday… so the jet lag is real…. also have a big day ahead, mildly concerned by the effects this will have upon it. oh well! WORTH IT!

        power is a huge concern. the most expensive part in any rig is always the power supply for that reason, so you pull the least power possible for the highest hash rate. beyond that, you have to go into the bios and config for each card and hack the values so it also pulls the least power for the highest hash rate (a process i am constantly tinkering with). a process that is very slow and cumbersome b/c no motherboard (until VERY recently) was built with the intention of housing 6+ GPUs on it. so you have to do them one at a time, then load them all up. the rigs run 24/7, they have to b/c of the nature of the blockchain. they are basically waiting for a transaction to run… once one shows up they try to grab it before someone else, then crunch the numbers, send the result, and apply for a new one. a bad internet connection could mean someone else always gobbles you up, this is why being in a pool is a good idea. pools share the transactions and make sure everyone gets a fair share, but takes a cut of the payout. well worth it unless you have 100+ rigs on your own.

        very little programming required, but a lot of knowledge of voltage and hacking bioses is required. also familiarity with building machines is very important as there is no case for these things, i just went to home depot and got some metal and wood and build something from scratch. then as my apartment started to heat up i also had to build a ventilation box for it so that the air flow of heat was forced out my window instead of permeating through the place and turning it into a sauna. learning all sorts of wood shop and air flow techniques i never thought i would 😉

        yea, really i just meant our generation is in the weird spot where we knew a world without all this instant gratification and struggle to really adopt and understand what the kids of today are going to go through (the generation below the millennials). when they grow up and have kids they will be much more equipped to deal with this kind of psychosis b/c they will have lived it and scientists/psychologists will have learned the effects on the mind and hopefully how to help us live fulfilling lives at this break neck new pace. IF we can keep the earth at a level that can sustain us that long, BIG IF! (but another topic entirely)

        happy to help… of coz im a guy with 14 GPUs and 2 TVs constatnly running in his apartment soooo maybe im used to leaving things running 😉