YouSaid · the spoken record

John Pfeffer

lines on the record: 113
first: 2022-02-01
most recent: 2022-02-01
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Probably aren't very well evolved for those types of things. And so our existence today requires us to be super analytical and all of that. But that doesn't mean that you should apply that reflex to things that were actually evolved to deal with intuitively.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“Or person two adapting rhythm to person one. And it's worked really, really well. And I think a useful kind of mental image for us. And I think that there's this whole kind of thing about, we get very, very young and obviously in a very kind of simple way. You met somebody at a party and it was kind of instinctive and all of that. And I think that people overthink these things. And I overthink most things, but not those things. And I think that we don't trust our instincts enough. Think about an evolutionary terms. When we're talking about most of the stuff we've talked about today, our ancestors 100,000 years ago on the savannah were not confronted with these issues and our brains are not evolved in a way where our intuition is going to help. On the other hand, 100,000 years ago, we were mating and forming families and raising kids and these kinds of things and therefore our intuition.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“We've been married now for coming on 28 years. And of course, we get married relatively. I mean, you know, I'm 53 and we got married pretty young. And so I talked earlier about all the different changes, countries and industries and all this change. And what has been great is that we've really grown up together. And the best analogy, the three-legged race, two people who put one leg into a burlap sack or whatever and then you try to run together and the whole funny thing about it is that you've got to stay synced and then you get a little bit out of sync and then you have to get back into sync and if you don't you fall down and you have to get back up and stay in sync and that's the game to me it's that we sort of get out a little bit of sync sometimes but then we both have one leg each in the same burlap sack and so we re-sink pretty fast so one of us will kind of go off in some direction they'll be like whoa wait a minute let me come back into the red”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“like yeah and that night i dreamt and i don't know if anyone's old enough to remember this but i dreamt of us walking off of the sabina which was the old belgian national airline airplane into the old zaventum airport which was really horrible and so in a dream we got off and she literally turned around just got back along the plane so i woke up that next morning and i said you know what i was thinking we should get married literally my mind was thinking i need a signed contract and she was like now i was thinking now we could just live together for a moment no no you understand we got to get married and then it went back and forth like that for a few weeks and then finally i said look i got it we got to decide what to do with this opportunity so we got to set a deadline and we decided on that deadline we usually would get married so it was a comically unromantic but that was clearly the kindest thing anyone has ever done for me is my wife agreed to marry me”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's comically unromantic. But so we met at a friend's birthday party, and it was classy funny, literally within 30 seconds I knew this was the love of my life and the woman of my life. I was convinced. And she within five minutes kind of got up and walked away. And it took me like a month to get her to even go to dinner with me. I managed to break through and then what happened was we were 1994 and for business reasons something came up where I had to, it was like whether it was an opportunity in Brussels and I said, well, this is really interesting. Why don't we move to Brussels? And she's like, you're nuts. You want me to? She was an elementary school teacher and just finishing up a degree and you want me to put my job and move to another country.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“Disappeared. So I'm confident people underestimate how by how many orders of magnitude more risky investing in liquid crypto assets other than Bitcoin is compared to investing in Bitcoin. And they say, yeah, but it's maybe a higher term. Yeah, but the thing is that it's like orders of magnitude more risk and maybe higher return or maybe lower return, depending on what you do. I don't think you're getting paid for that. That would be my comment. Sorry, I was very long-winded answer to say, yeah, I think you've got to diversify out of equities. We do. But I think within that, I think you need to be very thoughtful about not letting that be translated into, and now I'm going to go day trade altcoins.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“One because there's always another squirrel to chase. And it is true that, oh, well, there'll be a headline that will say this crypto asset outperformed Bitcoin and did this and that. And then people start chasing that stuff. Question is, okay, but look back over many, many years. There's really not much from, say, the 2017 crop that is even still there, let alone out from Bitcoin's sake. When I wrote my paper, Ethereum was trading between 0.09 and 0.15 ETH per BTC. It's right now trading at about 0.075, meaning below in Bitcoin terms. But everybody's like, oh, but he's outperformed. Well, no, I've been to what your timeframe is. Looking back from the summer of 17, it's underperformed Bitcoin. If you look back from one year ago, it's outperformed Bitcoin. But that's like the exception. And if you go to pretty much everything else that was on CoinMarket Cap in 2017, it's massively underperformed.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“The middle is tough because it's complex, it is not a muchness. One of the fallacies of this space is that people look at that list of cryptoassets on whatever CoinMarket cap or something. Imagine if you just log into Bloomberg and it was just one long ASCII file dump of every conceivable investment that had nothing to do with each other. And I think investors are beginning to discern and realize that Bitcoin is different from a layer one crypto asset is different from a DAO, is different from all these different things that they're beginning to, but still, I fear silliness like owning an ETH is like owning a share in Ethereum. No, it's not. I think we're going to have to become much more discerning about this. And it takes a tremendous amount of energy. It's extremely difficult. It takes a lot of information access. You know, human beings can very quickly be like dogs chasing squirrels in the park. And we never catch one.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“Time, but I think that remains a thing. But then within this world, what would I do? And I kind of break it into three buckets. There's like, there's Bitcoin, there's crypto VC, which there's an access thing, not everybody unfortunately can access, especially not the quality funds you want to be in. And I can assure you that the best funds are much, much better than the second best funds. And it's total power log. And those funds.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“Nearly as much, at least not public equity might be private equity through Pinscher. That one, two, three would suggest that you just take your retirement account and park it in the SPY or the Vanguard total stock market index, which would have been the right answer for the 20th and 21st century as long as those products existed. I think they've only been around 30 or 40 years. You know what I mean? I think that there's a strong argument that that won't work. But again, that kind of comes back to this point of It's too risky not to own Bitcoin. And I would send everybody there first. And this whole conversation, again, because the nature of the questions, I've talked about everything else, but I would just come back to the fact that to me that as a store of value, as the native money of the internet, Bitcoin is the biggest no-brain investment out there. Next question is how much of your portfolio and that depends a little bit on your tolerance for volatility and everybody's different because it will remain volatile for some.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“Look, it's hugely unsettling to me, that thought, to be honest. I've always been a big indexer in public equity markets and just sort of said, you know what, while I recognize efficient market theory is not accurate to the extreme, it's close enough. It's like a good model and it's close enough, meaning that I don't know that I can be operating at a level of stock picking where that imprecision of the model versus reality is going to help me out. So that was great because it made one part of my life easy. I do think that this whole discussion around the fact that this new tech rather uniquely is going to maybe in some subsets sub-applications I should say some applications would be great at value capture. Some sub-applications it will be pore value capture.1. Point two, the distribution of that value will be very different. And point three, it's not going to accrue in the form of equity.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“This year, I don't know, hopefully less obnoxious ways of phrasing what are you working on, but that kind of thing is to me far more interesting as a way to get to know somebody, far more informative.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“This kind of actually quite annoying cliche conversation question, which is what are you working on? But maybe just looking for less annoying ways to ask that. First of all, I think if you just have the discipline of saying, I'm not going to ask where somebody's from, because when you ask somebody where they're from, where they were born, what's really happening is your animal brain is looking to not make effort. By not making effort, it's looking to, with a minimum amount of information, put somebody into a box, which we do because brains consumer energy. And so we like heuristics because they save us time and energy. And if someone answers whatever they answer, we immediately assume a bunch of stuff about a person. That's the reason we do it, which is just laziness. So just simply refusing the laziness of saying, I'm not going to ask that and then saying, so, you know, it kind of forced you to ask about, so what are you doing? Where do you spend your time? What is your attention? What are you planning on doing new and different?”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“Think it's literally the least interesting thing about a person. And the reason is because knowing something about a person that they had no control over gives me no information. What I want to know about are the choices that they made and where they're going through this kind of saying in the family, which is don't ask me where I'm from, ask me where I'm going. Because that tells me who this person is. And so I find it really weird, this question, not only is they're devoid of information, but really strangely besides the point and something that we should all stop focusing on.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“Don't think in terms of certainties, update your probabilities fast. Don't anchor yourself where you don't need to. And recognize it that you're probably going to be doing so many different things in your life. It's those things that are going to be the core skills as opposed to something you're going to specifically learn or even whatever PhD you're doing right now. I have no idea where things are heading, but I think it just drives us back to being adaptable.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“The same information, how radically different that data is interpreted in terms of opinion, public opinion and political opinion and media is just staggering. And so as we are in a world that's going to be changing faster and faster, I find it really, really hard to guess. And so I actually had this conversation with our younger family members. We've got this big extended family and we were all sitting around together over the last couple of weeks. talking about some of this. Actually, the same question came up at the table. We were talking about how things are going to change. And I was a young person prepared for that. And I said, well, look, don't know, but here would be some thoughts. I think one is be data driven, be analytical, learn to be a problem solver, be aware of and consciously fight against your cognitive biases. And also be abayesian. Think probabilistically, update your probability.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“Both the range of And the speed at which we'll cycle through stages and maybe pendulum swing back and forth will get faster and faster. And therefore, it's really, really, really hard to predict, meaning I can sit here and rattle off innovations that will probably come to pass this decade that are so profound to begin with that it's difficult to imagine how one of them affects our existence, let alone the combination of them. And that means that it becomes absurdly difficult to guess the social political responses to that. And it could be all over the place. And one of the things I found fascinating about the pandemic, having seen it for many different countries and whatnot, is how literally we all have the same facts. You can go on the internet, they're all the same. Infection rates, hospitalizations, all the data, it's all out there. It's all on the internet.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“Not sure my opinion is any more valuable than anyone else's on this, but I would say the following. First of all, as you can imagine personally, I love globalism. I think there should be freedom of movement everywhere. And don't like this whole really reject notions of nationalism and all of that. It is somewhat more that way than it was, but whether that's a trend and how sustainable that trend is in historical terms. I'm talking about a very short time frames. I would temper some of this by saying things are cyclical and cycles are getting shorter and faster on everything for a bunch of reasons. One of them being that the environment is changing faster. The technological world that we live in is changing faster and faster. So I might more say, I'm not so much sure that I think it's going in one direction or the other than to say I think that”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“You're doing it for this massive amount of off chain work. And this is just massively deflationary. So you've got this kind of stuff, which means that the efficiency of this technology is going to grow much faster because again, it's software style economics instead of even Moore's Law hardware type economics. And so the interesting thing about that is coming back to, well, let's say we really do move a big part of the economy onto this tech. I think that it's going to become massively cheap and it's going to capture really infinitesimal value relative to economic activity going on.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“We need gas to conduct a certain amount of economic computations or transactions on the blockchain. It's not like ZK roll-ups are twice as good or twice as efficient. They're many orders of magnitude more efficient. And what ZK rollups allow you to do is to run your computation, your smart contract, your program off-chain, then delivers back a proof that the layer one can validate. And the consequence of that is that the amount of gas, which is the, you know, we're getting into how Ethereum works, but you actually pay miners gas, which is this internal currency on Ethereum, that you buy with ETH to pay for computations or whatever. This basically means all of a sudden you need like orders of magnitude, less gas to do a whole bunch of computation. You're just basically paying for updating state.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“Because I said much more of the value created will go to users and maybe to developers rather than investors. Rinse seeking is going to be really hard because of velocity, open source, interoperability, copying, forking. And you've got software style economics. Member that in my 2017 paper, I talked about sort of say, well, in the end, layer one blockchain crypto assets are going to converge on the cost of compute, and then that cost of compute is going to decline based on Moore's law. What it in fact is the case, it's better than that from a user macro perspective and worse than that from an investor perspective in that it's Moore's law, you get whatever doubling of compute every three years or whatever it is right now. I forgot the pace or two and a half years. I forgot where it is right now, but software economics, it's like orders of magnitude faster. And I'm just going to allude here to ZK rollups in that Ethereum economy of”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“Let's say that we get into a deflationary environment. Well, the asset you want to own is think about it, it's fixed income. You want to get your capital back plus something. But the problem with that is in an inflationary environment, that's exactly what you don't want. If you're unsure, it's like, well, we might get inflation, we might get deflation. It's like driving with one foot on the gas and one foot on the brake to have a portfolio that does those two things, whereas this, because it's hybrid, if there's inflation, the equity component of the investment will mature that you make money in real terms notwithstanding inflation. But if it turns out there's deflation, the debt component of the investment means you're going to get your capital back plus something in nominal terms. So I kind of like that. And by the way, let me just riff a minute on deflation. I think public blockchain crypto is a deflationary technology like no other. You can kind of derive that from all the stuff we've been talking about, but first of all, compared to the status quo.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“And I'm going to bring a whole new idea into this thing, but I look at it as my deflation hedge, which is when I say capital solutions or special sits, you're talking about typically debt equity hybrid securities. One of the challenges of thinking about the uncertainty of the next year is over inflation versus deflation is the assets you would want to own in an inflationary environment are their opposite from what you would want to own in a deflationary environment. And while most people are worried about inflation, there is deflation scenario out there. Maybe it's unlikely, but it's not zero. Again, Kathy Wood at Art talks about this and tech kind of being a driver, probably over and electrolyzing it, but the fact that as these hybrid debt equity securities for a percentage of our portfolio is kind of a nice hedge in case that came to pass. It's also just fun.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“True, it's not tech. In fact, it's rather intriguing, literally physical retail, it is not even e commerce. It happens to be a segment where really it's not threatened by e-commerce. And I think, look, yes, okay, why? Well, sometimes life is not all top-down. Sometimes it's bottom up. Sometimes there are opportunities and you seize them. That's from just a business and financial perspective. And I think it's going to be a very good investment. I know it already has been. But also it's good to have your mind also think about something that's so fundamentally different with a chunk of my time. So I think that's really good from that perspective. The only material non-tech thing that you do is capital solutions, special sits investing in Brazil, actually. And that's just like a whole other thing. I've got just these amazing friends and partners there. And it's not at all tech. Interestingly, because it's like capital solutions, special sits.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“With the market to create what it feels like a really premium supermarket experience is just this is what's happening and this is why it can be that premium experience well-being 30% cheaper on average. And it's innovative and it's working quite well, thankfully, and growing very fast. We open a new door every say nine days. It's a great business. I think it has tremendous potential across Europe. And the story behind it was I was working with a great friend and someone who had worked with originally while at KKR who had run a couple of portfolio companies Tony Denuncio who's a very prominent retailer because I'm not obviously been friends for many years and we were talking about looking for ideas and business models and this was whatever back in 2013 and identified this as an idea and then met”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“First of all, the business is pan-European outlet supermarket, and it's unique, but actually fairly straightforward in that the key innovation is the way it sources. And so what it does is it's fairly typical supermarket. It doesn't include fruit and vegetable or whatever, but it covers other kinds of food and drink and health beauty cleaning. It sells top brands, and it does so at about a 30% discount to the discounters. And the way it does that is that it's a dynamic assortment, so it's buying opportunistically as opposed to on a systemic contractual basis. And it does in Europe when the core principles of the EU is free movement of goods and free movement of people. And so this really builds on that free movement of goods to the extreme, which is we have a team of buyers who are buying opportunistically across all of Europe, taking advantage of overstocks, production problems, whatever, and then matching that.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“And you do the same thing. So, in practical terms, a little bit the challenge is yes, I mean, that's the right answer. You still kind of say, yeah, but what I do with the capital? Well, you know, you could just like park it and maybe that's the right thing to do. But to me, the difficult thing is that you can't say I've got this much money, I'm going to go start different investments. I'm going to go start 20 different companies that I'm going to build using 5% of each of my capital pool. your constraint is not you're going to be your capital is going to be your top and so that's where i find tension and that's what unfortunately i think means that if you've got capital you're kind of it's hard to get fully away from selling capital at some point as much as that would be the optimal thing to do if you want to be diversified”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“Inevitably get people who contact me asking for advice about breaking into private equity, whatever, because that was like what I did two industries ago. It's a great risk return activity, but right now in the current environment, you'd much rather be a buyer than a seller of capital. If you can do it. And by seller capital, I'm meaning investing and buyer capital means building a new business that consumes capital. At the highest level, it's just obvious that you would, in the current environment where capital is relatively abundant, yields are still negative, massively negative. And okay, maybe now they're going to become somewhat less negative, but they're probably going to stay negative. Real yields are going to stay negative for the foreseeable future. Kind of obvious that you'd rather be a buyer than a seller of something that whose price is negative. Now, of course, the challenge is for maybe people like me who are someone on both sides, both an investor but also building a business.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“To slow. By the way, something I noticed today, I was reading, there's this Bloomberg assessment that suggested CZO or CZA Chao, I think would be the right way to pronounce it, is a founder and CEO of Binance, is in fact a lot wealthier than the press acknowledged a year ago. And because of the value of Binance and the exchange, and it's kind of interesting that when asked, what crypto do you own personally? Because he also owns a fair amount. He only owns Bitcoin in his own token. which is interesting for someone who's built what is perhaps the world's largest fortune through trading of this long tail of crypto assets. One of these things of don't focus on what I say, focus on what I do with my portfolio.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“People who own Bitcoin, there's this question about when do you sell it? And people immediately start talking about like target prices and all that. And my answer to it is I would only sell or I would only sell but also willingly in order to make more attractive investments. So that's the answer as opposed to what's my target price. And that could happen for a couple of reasons. One is there's simply potentially higher returning opportunities. And I do think that why are we 15% allocated right now to crypto VC? Well, it's because the things that we're investing in in that space and the managers that we're investing in are going to outperform, to be honest. Even my bullish views on Bitcoin or these things they got a good shot at it. And that's only going to increase over time because this tech broadly is going to continue to grow and import and more things built and so forth. And again, because I do think Bitcoin will be successful. It's going to monetize it recently. And at some point, the pace of return will begin.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“For example, for U.S. listeners, U.S. registered charities, and so forth. That's something else that we're very committed to, of course, because it's supportive of our investment, but also because we think it's something that's really valuable for the world.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“And censorship and so forth, which will have similarly profound applications beyond just making money. This is a really big one and worth investing in and supporting. What we do, apart from investing is, for example, we're quite active and philanthropically supporting, and as a number of other people in the community, philanthropically supporting Bitcoin open source development, which depends on developers, you know, it's a computer program. It's a bunch of code, maintaining it. And then with the tremendous conservatism that is the nature of the Bitcoin community making improvements or adding features to Bitcoin has just happened and an important upgrade or additional functionality was added and so forth. And some people who do that don't require any kind of financial support and some people do. And I think that's a really good thing to do.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“Some of them maybe have some information asymmetry as well, which helps. I want to come back to this thing I put a pin in about the non financial aspects. I mean, Bitcoin is sometimes lost on people who live in countries where their monetary regime is pretty stable, they have confidence in their currency, the institutions that govern them and so forth. But that's a very small minority of the planet. And having a decentralized sovereign money, and I'm actually flipping my terminology, I talked to my paper about non-sovereign, but as I thought about it, I think you better call it sovereign money in the sense that it's self-sovereign, that the world can use is really important. And the fact that anyone can access it is super important. And actually, in terms of just human rights and so forth. And I think that's really important. And one of the other things that makes it so interesting. And while there will be other things built, you know, Web3, which will have similar, especially around media and information.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“Of other liquid assets alternatives. Part of that's because of what I said is I think that there's a lot of arguments as to why some of those things won't be as good a business to be invested in as people may currently think. Other things may be good businesses. And then there's a question of relative valuation. It's exponentially riskier because there's a lot more uncertainty compared to, say, owning Bitcoin, a lot more uncertainty about tech and competition and so forth. You then have to worry about when and what price to buy at, when at what price to sell at. There's a lot of things to keep track of. There are information asymmetries as in any market, but certainly here. Whereas I think that the asymmetry to the upside of Bitcoin is super compelling. I think the asymmetry to the upside in crypto you see is super compelling. All that middle ground I find is a little bit more evenly balanced at best in terms of upside downside, but with exponentially more risk and complexity. And there are some people who do it extremely well. Some of those people have the”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“As opposed to, say, a target price. Crypto VC is also part of that. That's sort of this other bucket that I talked about is the fact that there will be a lot of other stuff built. Talking about valuation is tough, but at least if you're investing in the VC stage, you're investing at the lowest, your values are lower than if you're investing after the VCs. And so given that there will be stuff of value build, and that includes, by the way, layer ones, which I don't think should be zero value, I'm just saying, I'm not sure I would buy them in the liquid market today. And all of the stuff I said earlier about why they're not great investments. That's very different from saying would I be invested in a VC that might invest very early in one of those protocols as well as all the things we talked about where there's a claim on fees or unique digital assets or DAOs or all these other kinds of fantastic technologies. If you get early enough exposure at low enough values, that's great. And so we have an allocation to that and that will grow over time, meaning on a relative basis. I think that will surely shift. What's missing, of course, is that middle ground.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“A lot of money. But if it succeeds, right now it's a risk asset because it's a venture project that aspires to be a more stable store of value. And what's exciting about it is participating in that monetization. But if it succeeds, at some point it will become a more stable store of value. It will go up relative to the growth of the economy and the kinds of things that you think of it as store of value, at which point progressively it makes sense to shift perhaps into higher returning assets. If you look back 15 years ago, I didn't have this proportion of assets of a total asset sitting in, say, gold because why would you? It's fine, but it's either not in your portfolio or a smaller part because you're doing a bunch of other stuff. So same thing will happen here. And what we're doing in that regard is incrementally investing in others, bitcoin cost of capital is high, but there are things that happen. And when they do, that's a good reason to, you know, that's a legitimate reason to sell Bitcoin.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“For that function. And it has the added benefit of being a fairly simple from a technical perspective. There's already product market fit. You don't have to believe that Bitcoin is going to jump through a whole bunch of further technical hoops to get there. And so you've got this thing that is going to happen. If it happens, it will be valuable. And there's this thing that's doing it really well that already has product market fit that is not really facing tremendous competition. That feels to me like just a no-brainer investment in something that you want to be significantly exposed to and a great bedrock on the one hand. So that's sort of category one and why it's so heavily weighted. Now, interestingly, it is also true that in, let's say 10 years forward, it's likely that Bitcoin will be actually a smaller part of our portfolio, whether it turns out that Bitcoin succeeded or Bitcoin failed. I mean, Bitcoin failed, it's obvious why.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“Different ways to come at this space from people who come at it ideologically. There's a lot of reasons why that is appealing and important. There are people who come at it purely from an investing perspective. I do come at it as an investor, which doesn't mean I'm not sensitive to some of the super important non-financial implications. But I'm going to lead with an investing answer and then maybe talk about the rest because I do think it's important. Look, as an investor, I think that Bitcoin is just this incredible no-brainer investment. There will be a money of the internet. There will be a digital store of value and means of exchange and so forth. And that is going to be super valuable. That's fairly intuitive. And Bitcoin has correctly identified the highest value piece of the function of money, which is store of value, and really nailed it and doesn't really face, in my opinion, real competition.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“There's a lot of tech risk, it's possible, not completely unreasonable. I have my view, and so me explaining is going to sound a bit one-sided, but I do think that reasonable people could come to a different view. And that would be the main reason why I think I could turn out to have made”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“Probably somewhere in the multiverse, the parallel universe, where ether and other layer one, there's a consensus formed around it being notwithstanding the arguments that I think make Bitcoin more attractive seen as the store of value. It's not impossible. Look, there's also somewhere in the multiverse. There's one where it was Dogecoin. What I do with that as an investor, I don't know. I think you can hedge, so you could say, well, I'm going to own a bit of both. I think you have to know that though there are all these other arguments as to why it might not be a great long-term hold, or you just see it as a part of your overall portfolio. But I think that would be the main reason. The main reason would just be that, you know what, everybody just kind of says ETH is the store of value and don't care about the fact that it has a changing and inconstant money supply and don't care about the fact that it's fairly centralized and don't care about the fact that proof of stake is a very different kind of security than proof of work. Don't care about the fact that the protocol is changing freely.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“The most security so Bitcoin's hash rate, which is a measure of the security of the network, is crazy orders of magnitude greater than anything else. It's the most decentralized, it's stable as a protocol. So you know what the monetary policy is, but also in other respects it's stable. So your tech risk is extraordinarily low in a relative and absolute basis. And these are the things that I think would make an attractive store of value relative to things that would not follow that. There could be a consensus that forms around something else being a store of value. And in that regard, money is a little bit of a meme in that there are some objective reasons why gold has been money for so long. But it is. Could it have been platinum? I guess it's kind of like we use platinum and catalytic converters and gold is money. I mean, there's a bit of monetary premium, but it's not the thing. Why is that? Well, you know, there's probably a parallel universe somewhere where that might have happened. And in the same way, there's”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“That there's a consensus now compared to 2017, that I think that I don't think anyone will disagree that any of these circulating currency type assets to have value, they need to be a store of value. I think everybody's accepted that. So the debate is around what becomes that store of value and whether there might be more than one and their relative size. I think now that's not really controversial. People have to hold on to it and velocity has to go down for this to work. That's why Ethereum moving to proof of stake is trying to bring velocity down. Then fee burning is trying to create incentives for holding the currency. It's because they're directly addressing that. So I think that's, I believe, consensus now. It wasn't perhaps when I wrote my paper. And then the question is, okay, but what makes it a store of value? So I'm saying that, well, I'm sort of assuming people are rational and that they're going to choose a store of value based on the same criteria that I would choose store value, which is I want to have the thing.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“A different outcome, but nevertheless, there's a whole series of reasons to believe similarly to the telecom businesses, which weren't great businesses. These aren't great businesses. I've been looking back to 2017 at the time ETH was overvalued relative to Bitcoin and that was a good trade last 12 months both ETH and these other layer ones have formed extraordinarily well i'm talking about 10 years hence and i have no idea what's going to happen over the next months or even a couple of years but i would have that in the back of my mind is this deutschelek”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“Because of overbuilding. And what ended up happening was, anyone who's old enough to remember, was the internet bubble included a telecom bubble. And then it crashed. And a lot of those companies went bankrupt. So basically the debt holders ended up owning this. It was cooking dark fiber that ultimately was lit and ended up having some value, but not for equity holders. And then take a Deutsche Telekom, which again was this huge darling. It's like trading still 78% below its dot-com peak. And it was a pretty intuitive thesis. Well, of course, let's own the pipes. But that's very analogous to, well, let's own the layer one that all of this is going to be built on. And the reasons are different. So the other one was because of capital intensity and cyclicity and all of that. Whereas this is because it's a circulating script and it's forkable and copyable and the mozzare shallow. So it's a different set of drivers and therefore could”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“Cisco, Intel, and in particular there was a subset, which was telecom stocks. Telecom stocks were hugely popular. And you would have been derided for questioning the obviousness of the fact that, well, all this internet traffic is going to have to travel over pipes. They own the pipes. So there's going to be this massive exponentially growing demand for bandwidth. And as a consequence, there's no multiple too high for valuing Deutsche Telekom. But in fact, literally, if you had come out in 1998 or 1999 and said, that's a bad thesis, you'd be laughed at. But on the other hand, they were sort of knowably bad businesses. So let's take Intellig. It's like, yeah, they own pipes, but really what is it? It's a highly capital intensive, commoditized business subject to wave upon wave of technology advances and prone to cyclicality.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“Not at all what we're seeing happen right now. It's the view that might be true in the future. And all I'm doing is kind of explaining what would be the drivers of that and why I think that's the case and why I struggle to see the opposite. So I'm very much accepting the obvious criticism, which is Yavachan, you just like, let's see over the longer term. And obviously investors have different time horizons. So if you're a short-term horizon investor listening to what I've just said would have been highly self-defeating if you're a longer-term investor, maybe it's right. And I would give you an interesting, again, I'm going to risk analogy here, but it reminds me a bit of, we think about these kinds of comical egregious cases, you know, boo.com and pets.com. And if you actually remember, the big giant internet darling stocks, the ones that really, really were big market cap and crazy multiples were, first of all, things like Deutsche Telekom, Allianz.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“Fixed income instrument is fine, but you still have to ask, what's the rate of return versus the risk of holding? Remember that the rate of... It's like squeezing a balloon. You're basically pushing the velocity on part of the money supply as you move it away from another part of the money supply. The other thing is that you could offer me an interest rate of whatever 3% in Argentine pesos. I probably still wouldn't put my savings at Argentine pesos, meaning not necessarily no. So I think it's a step in the right direction. I'm not convinced that it's by itself enough. In any event, we're going to have, again, this fades into the background. are going to be optimizing moving across multiple chains and it's going to be exceedingly easy to resist rent capture by these things i'll make a couple other points on this topic one is what i've just said has been the opposite of correct over the last year meaning we've seen a huge performance in later one crypto assets and it's very much the narrative of the moment and let it be clear that this view is”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“And burning, and that's all true. And that was clearly a step in the right direction towards trying to reduce velocity. But I still think that whether it's enough or not remains to be seen, I do think it's just in the right direction, so I don't dismiss it. I would say, though, there's this conflict. Either you want to be the most efficient decentralized software backbone for the global economy. And as such be cheap and high performing in order to constantly recruit new users and new use cases, or you want to extract rents in order to reward existing holders of the currency, which is this ultrasound money narrative that's cropped up in the Ethereum community. And I think those things are hard to do at once. In fact, I think they're contradictory. And so I'm not convinced. And I would also just add the fact that people are excited about it becoming a”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“We're optimizing inventories and really only holding as much as we need in order to ride out replenishment delays, standard deviations of risk around replenishment and all this kind of stuff intuitively. That's actually what the operations research formula will tell you, but that's really what we're doing. And those bots will be programmed for that. And what that's going to do is drive anything of that backbone infrastructure nature, I think, is going to be managed in the background by software. There's probably going to be programmed for capital efficiency, and that's just going to drive even more towards this notion of these things being working capital, which results in high velocity, which is obviously problematic for anything that function is a circulating script, as many of these things do. Again, I'm not talking about things that actually have a claim on a cash flow. I'm not talking about unique digital assets that may have collector value or other some kind of value. I'm not talking about things that aren't that. But a lot of these layer ones are. People will say, yeah, but wait a minute, there's staking and there's EIP 155.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source
“The bot will go out and figure out how to best execute probably across multiple blockchains, each of which is tuning to optimize for different needs that will be interoperable, that will be compatible to greater or lesser degrees and all of that. Will that be programmed to hodl, to speculate on crypto assets? Or say, yeah, I'm going to do some kind of AI positional trading. No, it's going to be programmed to execute at lowest cost and for capital efficiency. And the lowest cost will be how much does it actually cost to get my operation done. But capital efficiency is coming back to this notion of if you're not a dominant store of value, you're working capital, meaning companies, entities, people think of our wealth in stored in something, in a thing, and measure it in that way. And there's a bunch of other stuff that we need and use that we treat as working capital.”
2022-02-01 · Invest Like the Best · John Pfeffer - Adapt and Evolve - [Invest Like the Best, EP. 262] · IDENTIFIED FROM THE TRANSCRIPT · source