Author: Jim Wang

The Wild West of Crypto sure is fun to read… and with Tesla picking up $1.5 billion in bitcoin, I suspect we’re closer to the beginning of the story than the end.

Here are a few entertaining and, harrowing, crypto stories for today.

The first article is benign but entertaining to read. Please do not buy any Dogecoin!

The rest are more telling of what happens you have no rules. 🙂

I tried to get rich off Dogecoin and all I got was this lousy blog post [Gov Worker FI] – “… my Dogecoin phase wasn’t about investing for retirement. Mostly, I was just in need of a quick dopamine hit. I don’t smoke, I don’t drink, and I don’t do drugs. Really, I’m a boring person. But now and then I like to gamble a bit. Mostly with betting on sports or making prop bets. For the record- my favorite prop bet is betting on the length of the National Anthem during the super bowl. Even though bookies set the line at an insanely long time each year.” My friend always puts a few bucks on the first score of a Super Bowl being a safety… if you recall, this happened two times in three years (the last time was Super Bowl XLVIII). He probably has a few hundred Dogecoin, though I’ve never asked. 🙂

Darknet’s JokerStash Retiring After Making Over $1B Through Illicit Transactions [Coindesk] – “Crypto sleuthing firm Elliptic says one of the world’s most prolific cybercriminals is going out on their own terms.”

Rise and fall of the house of Bitcoin [Rest of World] – “A Buenos Aires hacker haven produced some of Argentina’s most valuable crypto companies. Then it suddenly disappeared.”

‘Even for the Rich, It’s Hard to Access’ America’s wealthiest are discovering the vaccine is one of the few things money can’t buy. [The Cut] – “If Georgina* could pay $10,000 to get the vaccine tomorrow, she would do it in a heartbeat. “I’ve always had this thing, and I know it sounds so entitled and bitchy, where I’m like, Stand in line for something, are you crazy? Nobody who’s a real New Yorker waits for anything,” says the businesswoman, speaking on the phone from her Upper East Side home. Georgina has never had trouble finding her way through seemingly closed doors — from sold-out showings of Hamilton to SNL afterparties and the most exclusive clubs and restaurants.” FWIW, Georgina qualified to get the vaccine in New York due to age, she just can’t get it because there isn’t enough supply.

This first article is fascinating because we don’t often think about how to protect ourselves (financially) during a “true” crisis like war. The pandemic was for sure a crisis, with threats to your financial life as well as your real life, but it’s not the same as war. That’s when things can get truly bad.

Protecting your capital during a war [Asia Stock Report] – “Wars are one of the greatest destroyers of capital. In Barton Bigg’s book “Wealth, War & Wisdom”, he makes the case that to protect your capital during a war, investors need to own diversified portfolios of stocks and property in safe regions. The book chronicles the experience of investors during World War II: whose wealth was destroyed and why. And what you could have done to protect your wealth.”

The Nirvana fallacy: when perfectionism leads to unrealistic solutions [Ness Labs] – ““Le mieux est l’ennemi du bien” wrote Voltaire in 1772—which translates to “better is the enemy of the good”, but is often translated as “perfect is the enemy of the good.” The Nirvana fallacy consists in comparing existing solutions with ideal, perfect ones—which are often unrealistic. A form of perfectionism, the Nirvana fallacy can lead to dangerous thinking and harmful decisions.”

https://medium.com/history-of-yesterday/the-gorilla-who-was-brought-up-as-a-boy-in-an-english-village-6e3cdac33c63 [History of Yesterday] – “This is the incredible true story of John Daniel, who was no ordinary gorilla”

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I’m (probably) never going skydiving. I don’t get it.

But some people love it. In fact, for some people, skydiving isn’t enough. They need to put on a wing suit and jump off mountains!

It’s crazy. This next article helps me understand it a little better but…

Why do some people risk their lives for fun? [The Economist] – “This past year, thanks to covid-19, humans have faced a radical increase in risk. Governments and individuals have decided to make huge personal and financial sacrifices to protect people from an increased chance of death. Once-unremarkable activities, such as eating at a restaurant or visiting your grandchildren, are suddenly fraught with the fear of death. The response to the pandemic has shown the extent to which humans are risk-averse—it has proved quite how far they are willing to go to avoid a chance of dying prematurely. So why would anyone jump off a cliff, and willingly expose themselves to it?” The interesting part of this article is when you get past the potentially evolutionary reason (“men overestimate the extent to which females value their engaging in non-heroic risk-taking, such as bungee jumping or risky sports, says a 2005 study”) and get into the compartmentalization section (“People who enjoy jumping off cliffs will not necessarily be keen to put their money into risky investments, or take risks in their relationships.”).

A FIRE-Minded Approach to Life Insurance [Physician on FIRE] – “Essentially, you’d be betting just shy of $16,000, paid in installments over 20 years that 30 year-old you won’t live to see age 50. If you lose the bet, you’ve kept your life. Win the bet, you’re now dead, but your grieving family will be a multimillionare grieving family. That’s how term life insurance works.”

10 Things I’ll be Watching Closely in 2021 [The Irrelevant Investor] – “2020 was the wildest year in the stock market that any of us have ever seen. We had two of the five worst days ever, the fastest bear market ever, and the fastest recovery ever. Today I want to look forward and talk about some of the things I’m thinking about for 2021.”

Inside Bali’s Saddest, Most Abandoned Theme Park [Vice] – ““Have you ever seen a ghost?” I asked the gatekeeper. “Everyday,” he replied nonchalantly, gesturing to the bench he was sitting on. “Sometimes the kid ghost sits with me.””

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I know the Gamestop story has been explained a bunch of times (and some may argue that it may be nearing its end) but this is a really fun explanation of it:

Money Is Fake and GameStop Is King: What Happened When Reddit and a Meme Stock Tanked Hedge Funds [Bitches Get Riches] – “My hat’s off to the day trading cowboys of r/WallStreetBets. By buying and retaining a mostly useless stock, these weirdly principled finance dorks are demonstrating, in real time, how fucking arbitrary the value of something can be. They are calling Wall Street’s bluff and fucking with the people who—for a living—regularly decide to drive an individual company out of business and its employees out of jobs.”

Now, when someone says “diamond hands” you’ll know.

I liked this next post not because of the list of ways to make money with Valentine’s Day, that’s fine, but I really liked the story that preceded the list. It highlights the truly important things in life.

How to Make Money with Valentine’s Day [The Thrifty Issue] – “In our house, as I was a single mother most of my kids lives, we had a different tradition. Each year, I would give them a chocolate rose with a letter telling them how much I love them, what is special about them, things I noticed through the year etc. It wasn’t until I overheard them the night before Valentine’s Day one year whispering about it in their bedroom that I realised how important this was to them. They looked forward to it every year and felt so loved by it.”

Are recipe boxes worth the money? [Be Clever With Your Cash] – “The problem is, they aren’t cheap. The normal price can easily be between £5 and £8 a portion. Possibly cheaper than a takeaway, definitely cheaper than eating out. But surely buying the ingredients yourself works out far cheaper? I’ve taken a look to see just how much of a premium you’re paying for the convenience.”

They’re not financially worth it. We use one, Sunbasket, not because it’s financially prudent but because it offloads a few meals from our mental planning each week. It’s something we only started during the pandemic and it’s very likely something we will stop once our kids go back to school. The convenience premium is worth it for us.

OK, as we go into the weekend, enjoy this story of outright fraud and how absolutely mindboggling simple it is to pull off (at least for a few years):

The Lion, the Polygamist, and the Biofuel Scam [Wired] – “How a member of a breakaway Mormon sect teamed up with a Lambo-driving, hard-partying tycoon to bilk the government for hundreds of millions of dollars.”

First up, a pair of articles (one short and one longer) on how to make your own luck:

How to Increase Your Luck Surface Area [Codus Operandi] – “The amount of serendipity that will occur in your life, your Luck Surface Area, is directly proportional to the degree to which you do something you’re passionate about combined with the total number of people to whom this is effectively communicated. It’s a simple concept, but an extremely powerful one because what it implies is that you can directly control the amount of luck you receive. In other words, you make your own luck.”

How to be lucky [Psyche from Aeon] – “Many of the world’s leading minds have developed a capacity, often unconscious, to turn the unexpected into positive outcomes. Developing this ‘serendipity mindset’, as I call it, is both a philosophy of life and a capability that you can shape and nurture in yourself.”

One thing that jumps out at me is that knowing that it’s often valuable to explore unexpected moments and being able to are two different things. If you have to work long hours, you can’t afford (or have the energy) to explore unexpected moments. You have to get to work. Perhaps this is why the rich get richer? More open time in their date to explore, make new connections, etc.

(as an aside, I really like the organization of this article with its Need to know, What to Do, Key Points, Learn More, and Links & Books sections)

Investing in a Beach House Airbnb [Relentless Finances] – “In this article I am going to do analysis of an Airbnb opportunity in Virginia Beach, VA. I selected this location based off Virginia Beach’s rank in the article Best Cities to Buy Airbnb. Which claims the average annual profit is $33,208. This would include part time listings, small condos, as well as large beach houses in the average. This is enough profit to make me interested in exploring further.” I’ve thought about investing in a vacation house to Airbnb it but never got past the “thought about it” phase – this was a nice deep dive into the level of research I’d need to consider it. One thing I would’ve liked to have seen is how you handle the cleaning and turnover part if you didn’t live nearby, I think that’s a big piece.

Why Rich Countries Should Subsidize Vaccination Around the World [The New Yorker] – “A team of economists affiliated with the University of Maryland, Harvard University, and Koç University, in Turkey, recently published a study about the potentially disastrous consequences, emphasizing both economic and moral imperatives for increasing worldwide access to covid-19 vaccines. The authors of the study (which was commissioned by the International Chamber of Commerce) found that unequal vaccine access among countries will likely lead to a “total cost for the world” between $1.8 trillion and $3.8 trillion, with up to half the losses paid for by wealthier nations.”

Brandon Ganch, a.k.a. Mad Fientist, is one of the OGs in the FI community. Last year, he conducted an experiment in ultralearning that culminated in producing enough music that he released an album. First, reading about his experience was fascinating (it’s a podcast so you can listen or read the transcript) but you can now buy his album. And stream it on Spotify. (or both!)

I think it’s cool when someone can fulfill one of their dreams. Even cooler when it involves producing something creative and putting yourself out in the world like this. I can’t imagine how scary it is. Favorite track is probably Bit Crush followed by Tokyo Eye and Please Rewind.

So You Turned $300k Into $3 Million. Now What? [A Wealth of Common Sense] – “Keep an aggressive allocation in a portion of your portfolio. As someone in the financial services industry, it would be easy for me to tell this person to take all of their money, pick a balanced asset allocation that suits their risk profile and time horizon, and move on with their life.” I like the idea of a “go nuts” allocation. 🙂

Meet YInMn, the First New Blue Pigment in Two Centuries,/a> [Hyperallergic] – “And now, for the first time in two centuries, a new chemically-made pigment of the celebrated color is available for artists — YInMn Blue. It’s named after its components — Yttrium, Indium, and Manganese — and its luminous, vivid pigment never fades, even if mixed with oil and water.” Cool!

I love food. I also never thought about a lot of the questions posed in this next article…

Introducing ‘Food Grammar,’ the Unspoken Rules of Every Cuisine [Gastro Obscura] – “SERVE SPAGHETTI AND MEATBALLS TO an Italian, and they may question why pasta and meat are being served together. Order a samosa as an appetizer, and an Indian friend might point out, as writer Sejal Sukhadwala has, that this is similar to a British restaurant offering sandwiches as a first course. Offer an American a hamburger patty coated in thick demi-glace, and they’ll likely raise an eyebrow at this common Japanese staple dubbed hambagoo.” Cheese on fish? Barbecue sauce on ice cream? Hmmm…

In 2008, I quit my job. I could’ve quit a year or two earlier but I waited until after getting married for one main reason – health insurance. As a healthy twenty-something, health insurance wasn’t going to be prohibitively expensive but it was a perk I wasn’t willing to give up (yet).

There were other reasons – such as a sizable education reimbursement benefit – but they all fit into the category of employer benefits. They were little brass handcuffs that kept me around a little while longer. It helped that I enjoyed my job and the folks I worked with, so I wasn’t suffering by any means, but I could’ve left earlier.

The handcuffs aren’t always gold and the “thing” offering them isn’t always your employer:

Golden Handcuffs are Sometimes Silver [Becoming Minimalist] – “Here’s the thing about golden handcuffs, and why the negative connotation is the most common use, most people wearing them don’t realize they’re wearing them. That’s why it works.”

Steal These Ideas For a Better 2021 [FrugalCity] – “I read to steal. I’m always looking for an angle – something juicy that I can take from a book and apply to my life. It could be as small as a witticism or as life-changing as a framework for making decisions. Whatever it is, I’ll be there, pen in hand, to capture it.” This list contains some gems.

Facebook shuts popular stock trading group amid GameStop frenzy [Reuters] – “Facebook Inc took down a popular Wall Street discussion group, Robinhood Stock Traders, in a move that its founder on Thursday described as backlash for conversations buoying shares of GameStop Corp and other companies this week.” Hmmmm…

Finally, presented with no explanation but guaranteed to spark joy (or not, in which case I’ve misread you!) – The Cube Rule of Food Identification.

Not sure what happened with GameStop last week? (I’m writing this on Friday, which is already a wacky day…)

Here are a few articles that will get you up to speed. I suspect we’ll hear more of this in the coming weeks and months:

How GameStop found itself at the center of a groundbreaking battle between Wall Street and small investors [The Guardian] – “he coronavirus pandemic hit GameStop hard. Like many retailers, already suffering from the shift to online sales, the video games chain is losing money and plans to close 450 stores this year. And yet, surprisingly, GameStop has become one the hottest stocks of the year.”

The GameStop stock frenzy, explained [Vox] – “How a bunch of Redditors made GameStop’s stock soar, much to the chagrin of the hedge funds attempting to short it.”

‘You will lose your money very, very quickly’: What investors need to know about GameStop’s stock surge [CNBC Make It] – “The GameStop surge is making headlines because it’s being driven by retail investors — individuals who buy and sell stocks for their own gains, as opposed to professional investors working on Wall Street — on the subreddit r/WallStreetBets (WSB), a community 2.9 million-strong that refers to members as “degenerates” and idolizes Elon Musk.”

And if you’re not interested in the GME hype, here’s a fun article to enjoy:

Lunik: Inside the CIA’s audacious plot to steal a Soviet satellite [MIT Technology Review] – “How a team of spies in Mexico got their hands on Russia’s space secrets—and tried to change the course of the Cold War.” O RLY?

Today, I want to share one story, which is not money related but life-related, and three powerful ideas I took away from that story:

Meet Virginia Apgar, the unlikely anesthesiologist who saved newborn babies [Massive Science] – “The newborn’s skin was blue and he wasn’t breathing. A few years earlier, the doctors would have documented the baby as stillborn, not believing there was anything they could do to help. If this were the mid-1950s though, a recent development in the field of obstetrics would have given them hope – the Apgar score. The newborn’s 1-minute Apgar score indicated that the newborn was in poor condition, but they treated him with oxygen. Sure enough, his 5-minute Apgar score showed improvement. Maybe he had a chance after all. Virginia Apgar’s invention helps saves newborns.”

1. There are tens of millions of human beings who owe their lives to Virginia Apgar. Probably more like hundreds of millions. How wild is that?

2. She began medical training in 1929 and, as in many fields, women were “drastically underrepresented.” She would become a surgeon but pivoted to anesthesiology because her mentor thought she’d have a hard time attracting patients. As a result, she was present for a lot of births and it’s shocking that 1 in 30 died at birth – in part because obstetricians abandoned babies that looked “too sick to survive.”

Gender discrimination is bad. And after reading this story, you might be tempted to think that gender discrimination is good. It steered her to precisely where she needed to be to devise the Apgar score. In reality, you should think of it as – “gender discrimination created a world in which this level of coincidence was necessary.”

If there were no discrimination, it’s likely someone else, far earlier, could’ve come up with this score. The more brains we have working on a problem, the better, especially on problems that society doesn’t realize are problems!

3. She never retired.

I remember a conversation I had with my dad (when I was a kid) about working.

He asked me who I thought was “happier” – the CEO of a large company or the janitor at that company?

I, predictably, said the CEO. He was in charge, was more powerful, and made waaaaaay more money.

My dad said the janitor had a clear cut job, was in control of his work, and didn’t have to stress about it once he was done. He may not have made more money but he wasn’t getting calls over the weekend about handling a crisis. The point of the conversation wasn’t who was happier but that you need to think a little more about a question before answering. Surface level is often not the whole story.

For some, becoming a CEO might be a dream job only because you don’t know all that comes with it. It’s like social media – you see all of the good and none of the bad. With a CEO, there’s a tremendous amount of responsibility and stress because a lot of people depend on you. One misstep and you could cost many people their jobs. You may be well compensated but that all depends on how well you handle that stress. 🙂

The Dream Job That Wasn’t [The New Republic] – “The concept of the dream job still persists, likely because so many of us are working in what the late David Graeber called “bullshit jobs,” or are simply not employed at all. Finding your dream job is a seductive idea: the do-gooder, Protestant version of the FIRE movement—rather than trying to escape work, why not try loving it instead? It’s a relatable impulse, but I imagine most dream jobs are more like running a lighthouse bed-and-breakfast for 40 paying guests than a paid vacation.” (did you know that cookbook recipe tester was even a job???)

Advice for Giving Advice [The Irrelevant Investor] – “I’m doubling down on my own advice. Lessons cannot be taught in the stock market. They can only be learned through experience.”

Lock It In [The Belle Curve] – “When I read about investors making millions on Tesla in the Wall Street Journal, I get nervous. I am also insanely happy for their good fortune. There is no greater luck than winning the lottery. It is not supposed to be this easy to make money in the stock market. Preserve and grow capital yes, but outright make a fortune? No. Money made this easily can be lost in the blink of an eye.” When a football team has won the game, they kneel on the ball to run out the clock. They don’t try to get more points. The game has been won and risking the win to pad the score is foolishness no matter what the game.

The Magical Art of Selling Soap [Laphram’s Quarterly] – “But American advertising—and cosmetic advertising in particular—traces its origins to the decidedly less-than-rational hodgepodge of science, magic, and faith that formed the culture of medicine and “wellness” in the late nineteenth century. The first efforts at national advertising were launched by patent-medicine manufacturers, whose elixirs, pills, drops, and ointments promised customers miraculous physical and mental transformations. For all of its purported down-to-earth rationality, the advertising industry had deep roots in magical thinking. This was a past it would never completely leave behind: that was, in fact, integral to its cultural success.”