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Strategic Advisor to the CEO of Ripple and former Co-President of Morgan Stanley Zoe Cruz


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Interesting POV from someone who managed very wealthy people's investments. Take 1-10% of what you actually can invest, divide into 5 parts, pick 5 of the top cryptos today and invest equally. 4 will go to zero and 1 will moonshot, hypothetically. You'll lose 80% of your initial investment but the 20% that won will more than make up for the 80% loss. VC 101.

The risk is that you become like sugar-daddy Softbank casting a huge net, just pumping money 'blindly' into anyone with a "good idea" in hopes that they're one of the moonshots.  Look at WeWork, anyone with a brain knew that was a sh*tshow but they valued the IPO at 47 bazzillions. CEO walked off with a billion leaving investors to suck it.

I don't disagree that splitting up your VC investments is a legit strategy, the assumption here is that your moonshot will X enough to cover your initial outlay. In a horse betting example, there's 18 horses in the Kentucy Derby all ranging from 2 or 3-1 to 50-1 odds. If you take $18,000, put $1000 on each horse, you only profit if one of the horses with odds worse than 18-1 wins.  Everything else is a money loser.

Skimming 2020 Derby odds atm, there's only 10 horses offering worse than 18-1, which means you're 55% to win, 45% to lose money on 1 race using a VC style strategy. Clearly better than one $18,000 bet on a 30-1 dog. +$500,000 profit on a 30-1 longshot vs $30,000-17,000=$13,000 profit (30-1) on essentially a coin-flip.

When you do the math, VC investment is basically the same win percentage as sports betting.  If sports bettor is a winning 55% of his/her bets, it's a good week.  With "accredited investors" glass ceilings and all the rest, it's sports betting for rich people, as I like to call it. You can't play if you don't have a $1,000,000 net in the bank already or make more than $200,000 a year.

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I'm not a fan of diversifying in crypto. I'd rather diversify with more index funds and bonds. There are one or two other projects that seem to be the real deal too in this space so maybe I'll put something into them at some point. I think most projects will fail, maybe even XRP. I just think XRP is the A-Team from what I've seen and if there's anything to bet on in this space, it is far and away the one to bet on. Nothing else is really close.

Why not just buy penny stocks instead? 

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2 hours ago, mrhat75 said:

I'm not a fan of diversifying in crypto. I'd rather diversify with more index funds and bonds. There are one or two other projects that seem to be the real deal too in this space so maybe I'll put something into them at some point. I think most projects will fail, maybe even XRP. I just think XRP is the A-Team from what I've seen and if there's anything to bet on in this space, it is far and away the one to bet on. Nothing else is really close.

Why not just buy penny stocks instead? 

Dear god I hope you're not in US bonds. 30 year money is returning 1.41%. When I was born, 10 year money was returning 15%. Japan has been negative rates, and their central bank owns like +50% of the Japanese stock market, it's absolutely WeWork we-tard-ed. This is why people will flood into crypto. There is 0 yield, heck worse than zero yield, in traditionally 'safe' assets.

You also have to consider her actual audience; high net worth individuals who are at most investing 10% of their $3, 4, +10 million whatever into 'risky' crypto plays. At $4 mill, that's $400,000 cash that they could lose without really being affected too much. Their houses are still already paid for, food and all that stuff, plus whatever active/passive income streams they've got set up are still intact. For them, the wealth has already been accumulated, so now they're 'diversifying' into cryptos.

I'd agree you shouldn't diversify until your stash has been stacked. I doubt XRP will go to zero in the next 10 years, 5-10% chance. Companies are already using it to transact so unless something much, much better has already been born and we just don't know about it, XRP will be around for a good while.

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2 hours ago, mrhat75 said:

I'm not a fan of diversifying in crypto. I'd rather diversify with more index funds and bonds. There are one or two other projects that seem to be the real deal too in this space so maybe I'll put something into them at some point. I think most projects will fail, maybe even XRP. I just think XRP is the A-Team from what I've seen and if there's anything to bet on in this space, it is far and away the one to bet on. Nothing else is really close.

Why not just buy penny stocks instead? 

short term gains are usually better attributed to penny stocks, or ETF's and things. Hell you can even get some long term gains if you pick the right ones. Investing in crypto is investing in an entirely new market space that will eventually replace transaction banking as we know it today.  maybe not in our lifetime, but both the potential and the players are very real. 

Crypto is really for those who can (or at least are willing to) give their $2k to the cousin who they know won't be able to repay that loan they are asking for to 'better their life'. Meaning, everyone has a family member that asks for money, and they all know that they won't repay it, but everyone hopes to see that glimmer of hope that he/she actually uses that money to better themselves in the future, and appreciate the 'starter loan' to change their life. an investment in crypto is the same type of investment. 

'hope' that it will pay you back, but expect that it will not. You may just end up pleasantly surprised, but there's no love lost if it doesn't. This technology is on the bleeding edge. Not the cutting edge... the bleeding edge, which means it could be huge, or it could fall flat on it's face and ass everyone out of their money. This technology has the ability to change the world as we know it if it's applied to the current systems properly. This technology has the ability to be complete 'vaporware' that goes up in a cloud of smoke and all the project heads disappear. I know i've seen that more than once personally. 

Diversification is the most fundamental of all risk mitigation, and not doing so in the burgeoning of a completely new asset class (if crypto tokens are actually deemed an asset class by regulatory bodies) is an unhealthy way to grow your investments.  The burgeoning of this new class of investment tools is something I've only seen one other time in my lifetime in ETF's, and those have made an exorbitant amount of money thus far. 

MY  (only my reasoning) to not buy penny stocks in place of crypto, is because crypto will overtake almost all asset classes in the future. maybe not even in my lifetime (which is another 60 or so years) but eventually, they will if the world keeps spinning on it's current trajectory.  it just makes sense for value to be transacted with the speed of computers. ifyou're in it for the short term, Penny Stocks are probably a better bet. me personally.. I trade almost all asset classes while I accumulate a variety of the top ten crypto tokens slowly on the dips. 

 

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1 hour ago, jetbrzzz said:

Dear god I hope you're not in US bonds. 30 year money is returning 1.41%. When I was born, 10 year money was returning 15%. Japan has been negative rates, and their central bank owns like +50% of the Japanese stock market, it's absolutely WeWork we-tard-ed. This is why people will flood into crypto. There is 0 yield, heck worse than zero yield, in traditionally 'safe' assets.

 

I'm pretty close to 100% stocks outside of crypto and one piece of real estate.  BUT when the time comes for early retirement (completely outside of crypto) then 'bond tenting' may be a viable strategy......depending on market conditions.   I guess I was just saying "stocks and bonds" as a more general traditional investment strategy.

I think crypto has far too many moon boys who put it all into a lottery ticket and don't think about doing any type of normal investing, which they really should.

Edited by mrhat75
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12 minutes ago, mrhat75 said:

I think crypto has far too many moon boys who put it all into a lottery ticket and don't think about doing any type of normal investing, which they really should.

It's kind of a good thing because if crypto was already sophisticated, XRP's price wouldn't be $0.25 :biggrin:. I'll be good if we get put back on the gold standard or XRP does what I think it will. Personally I'm waiting for the real estate market to tank before I decide to put any profit from the hypothetical gold revaluation or XRP into it.

I was considering commercial real estate, but with the 'Rona, no one's gonna be leasing commercial property like they used to again.  NYC fire sales are around the corner, in midtown the vacancy rates are at least double in the last 10 years, never mind what's happening with the 'Rona on top of that. Residential might be a better play if you can buy cheap and outright after the 2021 crash and keep rents low for all the people who are basically being evicted as we speak. Sad yet that's reality.

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36 minutes ago, StirCrazy said:

Not just NYC by the way. Philadelphia and Comcast Centers 2x are vacant. How is SF and LA doing. Omaha might be the new New York in 2050.

All I know is Joe Rogan bounced the eff outta LA, he's in Austin, TX now I think. He won't be happy when Cali passes the millionaire exit tax (retroactive taxes on exiting +$30 mill net worth Californians). You can't make this stuff up.

NYC and di Blasio can suck it after this 'Rona/lockdown/protest mess. Man, midtown NYC, people looting Macy's on 34th, wth.  Let them tax into oblivion whoever's silly enough to stay. :help: 

I'm feeling Dallas Fort Worth, literally packed up all but a couple weeks of clothing. And I guess I need to trade-in for a pickup truck? Apparently that's all that exists in Texas; can any Texans confirm?

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It is not at all clear who will survive the culling of crypto that will inevitably happen over the next several years.  But Ripple and XRP seem well positioned and sufficiently established that it is likely at least some of the worlds commerce will travel via Ripplenet and hopefully, XRP.

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