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Infinite Curiosity

~ Exploring ideas related to tech, code, finance, markets, adtech, AI, humor …

Category Archives: trends

Baron Capital’s Ron Baron delves into the mind of Elon Musk

08 Tuesday Nov 2022

Posted by Grynn in aide-memoire, finance, trading, trends

≈ Leave a comment

Tags

investing, newsletter, tsla

Elon interview with Ron Baron Nov 2022

Elon’s longer term vision for Twitter is to use it as the base for his next generation identity & payments platform (apart from being a useful digital town square for ‘most’ people). Elon says that he knows how to make a better Paypal – a business that could be the world’s biggest/most valuable financial services company. He claims to have developed the blueprint during his days at ‘x.com’ (the pre-cursor to paypal); relatedly Twitter is owned by ‘X Holdings Inc’. Possibly related, the largest PE firm – Apollo Global is also focussed on identity & payments. This also links with something Dr. Harshvardhan (Trust Capital) alludes too – the value for transactions is not in the moving of money/entries in a ledger, but in fraud reduction through identity verification/KYC. The idea being that $MA, $V are not so much in the business of facilitating the movement of money as in the prevention of fraud. A bitcoin or Doge or similar network with an identity layer on top could be very interesting.

Elon claims: “Must be done for the future of civilization, without which nothing matters” which is plausible. Perhaps, Elon really thinks he has no choice but to act. He who owns Twitter controls who the next government is and that man is Elon.

Tweeted: Dec 12, 2022

My read is that Elon has switched from saying that $TSLA is over-valued to TSLA is undervalued, especially if as he believes autonomy adds 5x the value to cars without changing manufacturing cost. TSLA has 15% operating margin at the moment (gross margin: 27%); if cars can be sold for 5x current price, gross margin would expand to 85% (and given the size of the market, this would be larger than any other business in the world). In other interviews Elon has repeatedly said that he thinks TSLA will be worth more than Apple and Saudi Aramco combined (the two largest currently listed entities).

Edited: Nov 9 ’22: Elon sold an additional $4B of $TSLA (https://www.reuters.com/business/autos-transportation/elon-musk-sells-195-mln-tesla-shares-worth-395-bln-sec-filing-2022-11-09/). So my read was wrong; it looks like Elon thinks there is more pain to come. At some point his wealth could flip with the more of Elon’s net-worth coming from SpaceX & Starlink than from Tesla! (600B marketcap on Nov 9; Elon 14% => $84B).

Back of the envelope $TSLA model: At this point most TSLA analysts believe that TSLA will be selling between 10-20M cars by the end of 2030 (1.6M/year at the moment, with a 50% CAGR projected). At a 25% operating margin, and 20x terminal EV/EBIT $TSLA’s NPV is ~$990B. At at 40% operating margin, this increases to: $1.7T. Current market-cap: $655B (ATH: $1.2T)

Installed Base of Vehicles in the USA

AutomobileBusesTrucksMotorcyclesALL
104M0.5M159M8.2M271M
source:

Tesla semi & Cybertruck – should add substantial value by greatly expanding TAM.

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Thoughts on Bitcoin/Crypto

05 Saturday Jun 2021

Posted by Grynn in finance, trading, trends

≈ Leave a comment

Tags

idea, interesting, investing

Banking / Traditional finance (#tradfi) is ripe for disruption (and perhaps needs to be disrupted). Why 👇

  1. Fiat Currencies: Store of Value/Mobilize Savings
    Inflation is Taxation Without Legislation -Milton Friedman
    1. Government issued currencies (fiat) are prone to debasement – losing value every year
    2. Rely on a central government that controls supply (and value) 
    3. The central government has an incentive to create more money every year (steal from savers)
    4. Checks & Balances in the form of a link to gold / something with limited supply (scarcity) have disappeared
    5. Predictably supply increases every year (and in times of crisis, by massive amounts)
    6. ==> The USD has lost 95-96% of its value over the last ~100 years (at the FED’s current inflation goal of 2% the USD would loose half its value in ~34 years). If inflation is closer to 7% then the USD looses half it’s value in just 10 years!

  1. Banks
    1. “Fiat” cannot be stored without the use of intermediaries (banks, regulated by Central Banks)
    2. Your money is just some banks’ liability; you have exposure to a bank’s creditworthiness (and the banks in turn are exposed to the creditworthiness of the central bank)
      1. One can store “cash/gold/diamonds/paintings”, but this is inconvenient at scale; susceptible to seizure; susceptible to demonetization; susceptible to theft etc.
      2. Gold/cash can be faked; BTC cannot, easily verifiable by anyone.
    3. If banks go poof, then the money they created/owe you also goes poof
    4. FDIC / Government insurance of this money, makes the government liable to pay when/if banks go poof
      1. So the government protects the banks from going poof (systemically important)
      2. This means banks are immune from failure; so they do not innovate and improve customer service; instead they find new ways to tack on “fees”.
    5. Original intent: Bitcoin was created after the 2008 bank bailouts; https://news.bitcoin.com/a-deep-dive-into-satoshis-11-year-old-bitcoin-genesis-block/ (Note the bailouts were required because 95-96% of all dollars/rupees/pounds (fiat) are actually just bank liabilities not physical “notes”/real money.)
  1. Fiat Currencies: Medium of Exchange
    1. “Fiat” currencies cannot be transferred without the use of intermediaries (payment networks like Visa/Mastercard/Amex which are susceptible same regulations as banks)
    2. Banks are exclusionary. Only a few have access to the SWIFT network.
    3. You can move “cash” without using a bank, but this is difficult to do at scale (inconvenient form factor, susceptible to seizure, theft etc)
    4. Regulations limit innovation at banks (and now bank’s culture), because they are systemically important entities.

Enter Bitcoin:

Bitcoin is many things; digital gold; a commodity with limited supply; a medium of exchange; a store of value

The core innovation is the lack of central “authority” (aka gatekeeper, that can be corrupted). Central authority is distributed and yet no participant can just claim all the coin. Scarcity without a single authority! Incredible. 

  1. Medium of Exchange:
    1. Easy to transfer anywhere in the world, where there is internet; code is open, network is open
    2. No permission needed; every single participant (node) can verify & create transactions without requiring any permission from anyone
    3. Becoming a participant is permissionless too; no gatekeepers
    4. DOES NOT work without internet; sure you can write down long codes and use pigeons, but really it does not work. (In times of crisis, governments like to cut off internet access; see Kashmir, Yemen, Syria ….)
  1. Store of Value
    1. Supply is “algorithmically” limited; cannot be debased – (not without a hack/security flaw/corruption of the core BTC dev-team); 
    2. There can never be more than 21M Bitcoin*; in fact some will get lost every year in abandoned wallets, so the supply is likely to decrease YOY.
    3. No insurance (FDIC); if your money is stolen no government will help. May be alleviated by private cos offering insurance?
    4. No plunge protection team like the US FED (i.e. no Bernanke PUT)
    5. No one to kill competitors (the US has an army and uses stronger army diplomacy when folks want to supplant the USD as the reserve currency)
    6. OTOH the army of bitcoin maximalists grows every day and is quite a strong force 
  1. Commodity:
    1. Similar to say physical steel; supply is limited; mining is needed to mint new coins; has high volatility; 

Risks to participation as a speculator

  1. Security: 
    1. A single double spend, or other weakness in the core consensus algo would destroy all value.
  1. Competition: Competition among peers, BTC vs ETH vs Doge vs CumRocket etc.
    1. Is this a winner take all market? Will there be one global ledger (blockchain) or many? Will some be more important than others?
    2. While easier to transfer if you have internet, physical stores like gold/diamonds/guns don’t need internet or electricity … 
    3. Central Banks could also create their own “coin”, and thus compete. They’d have the resources to force compliance, esp. from institutions & companies.
  1. Regulation
    1. IMHO Crypto is anti-fragile, regulation will spur innovation and make crypto even more resistant to threats.
    2. Something with this much demand is more likely to be taxed than outlawed; but heh, Cocaine has demand and it outlawed, so …

Risks that I don’t think are really risks, but hey, I could be wrong

  1. High volatility ; the USD exchange rate is volatile 
    1. Has not hurt adoption so far; # of wallets, nodes, transactions all rising
    2. High vol is good, it removes paper hands.
  1. Excessive Power Usage / Inefficient
    1. The network will and can vote to change from Proof of Work to say Proof of Stake or Proof of Space or something else
    2. This can be solved.
  1. Stability: 2.5 trn of crypto recently went thru a 30-50% drop in price; no FED/SEC stepped in to save the “banks”. No vultures (economists) jumped in to save the rich by stealing from the plebs (or Is the Fed meant to the opposite, protect the plebs? I get confused sometimes). Nothing bad happened, no systemic risk. There was plenty of leverage and those who took the leverage paid for it. No one else was affected. Imagine if the SPX plunged 50%; there would be carnage and the losses would be socialized. Crypto market cap is now > than top 2-3 banks I think – which should be considered systemically important! and yet nothing untoward happened when it tanked. The fact that Central Banks want to get in on the game, by making a digital currency (crypto) just legitimizes the model. It works. If you can’t beat ’em join ’em. 
  1. Lack of Utility:
    1. What is the utility of money if it cannot be exchanged for good & services? BTC is liquidateable at scale (100’s of M/day)…

Risks to adoption / Technical Risks

  • Low transaction speed; since every transaction must be broadcast / verified by every node, there is an inherent limit to the number of transactions per second. There are solutions like Bitcoin lightning, but there is no one clear winner as yet. This is also a problem for Ethereum and similar chains;
  • Poor UX: Wallets are not terribly easy to use; much easier to use hosted wallets like Coinbase, but then the distributed, pseudonymous nature of Bitcoin is lost.
  • Trust / Anti-fraud: For example there is no reliable service that provides trust; #Bitcoin has the carrots that incentivise good behaviour but none of the sticks. Cannot kick out / ban bad actors especially since pseudonymity makes it harder to identify a bad actor.

Does an $intc short make sense?

30 Wednesday Apr 2014

Posted by Grynn in finance, tech, trading, trends

≈ Leave a comment

Job postings suggest Amazon is planning to make its own ARM-based servers.

Google eyes Power chips

Software Engineer, ARM Server ($FB)

Looks like everyone is evaluating ARM servers; makes sense to me. Small, cheap servers that can saturate a 100Mbps network connection…

I think $INTC is under attack on all fronts:

Servers: ARM could make serious inroads (classic Clayton Christensen, the innovation looks like a toy, flies under the price umbrella till it’s too late for the incumbent, who cannot (or will not) self-cannibalize based on something that looks like a toy …)

Mobile: $QCOM, $AAPL, SMSN:LI rule here…

Desktop/Notebook: As I posit in my last article, $AAPL may make a move here (or not). But the fundamental thesis is the same. Desktops will move to from the Core variants to the Atom variants. They’re nearly good enough now. $MSFT providing Windows free for low-end boxen? It’ll only add to the fire.

If the move from Core/Xeon series is towards Atom – it will margin compression. If it’s towards ARM, it will mean substantial loss of market share. And $INTC is now setup to be a player at scale. Not sure if they can compete like a scrappy little startup anymore. I wonder if that’s left in the DNA?

As a long term $INTC fan – nearly every compute device I’ve bought had Intel Inside, this marks the end of an era to me….

When will the transition be visible in stock prices? Is much of this already priced in?

With $INTC trading near the top of it’s 52W range ($27.24) I think the risk (for a short) is quite low. Say about $4  = 15% ($31), which is where many analysts are calling it. The gain could easily be $7 = 26% ($20). I think it’s time to nibble a bit…

Red:

Short interest seems to be under 1% of the float, why is it so low?

PE ratio is just 14; multiple expansion is easily possible if $INTC shows signs of life in the mobile space. $INTC has been talking about a better radio, which seems to be a key weakness for them….

There could be a revival in the desktop space (unlikely IMHO).

The main risk I see is that the move could take longer than I can hold … will a move take more than a year?

Amber:

I just love the Xeon Phi (in abstract terms). Can’t see the whole point of Tesla/GPU compute if you can do cheap enough, dense enough full-featured cores. A whole bunch of ‘em. But then there’s the fun projects like Parallella. The software effort required for to write apps for GPU compute languages has never made sense to me.

Green:

NUC is a joke.

Atom in the Datacenter means severe margin compression. ‘Course an Atom doesn’t measure up to the raw compute of the Core / Xeon E series … but then the price differential is substantial.

What’s the $INTC bull case?

1) Success in mobile – scaling down the Ivy-Bridge architecture to be competitive in the 2W TDP space.

I think $INTC is competitive already – but it’s not leading to design wins because:

1.1) Low-end is extremely price-conscious; INTC realistically has not much   chance of competing in this space. Sure they can ‘bribe’ companies (contra-revenue as they’re calling it) to use INTC, but I think this is akin to buying eyeballs….pointless in the medium term.

1.2) High-end, there’s no market outside of AAPL, SMSN and neither is going to use INTC at the moment. Perhaps Nokia (err… Microsoft Mobile Oy) may give it a shot? Lenovo? maybe, but really I can’t see a third player (at any scale) for at least the next few years.

Can INTC use the leverage it has – in terms of desktop/server to bully Apple? Don’t think so — Apple is perhaps one the largest single customers for INTC, they need Apple more than Apple need INTC.

2) Datacenter growth continues un-abated, with Intel continuing to rule the roost, picking up another couple of percent in terms of market-share by destroying what little remains of AMD?

I certainly think Datacenter will continue to grow pretty fast. The cloud is more important than ever. Indeed INTC bet that growth in mobile would require equivalent growth in datacenter and the margins in datacenter were much fatter….(find quote from outgoing INTC CEO here…). Is the relationship linear?

Shiny apples

12 Saturday Apr 2014

Posted by Grynn in finance, trading, trends

≈ Leave a comment

[Edit: 17-Apr-2012, scuttlebutt is the iPhone 6 will cost $100 more than the iPhone 5s (retail) and that Apple is asking telcos to absorb some of this increase, to which there is some push-back. See bottom of post for more analysis.]

Idle speculation, whilst on the treadmill ….

Where could $AAPL be planning to use its Sapphire? (too much smoke for there not to be a fire; Apple’s planning something to do with Sapphire, but what?)

1) iPhone screen – ok, so every other dude and his dog, thinks this is the plan.

Criticisms: It’s too expensive – about 10x the cost of Gorilla Glass ($GLW) they say

It’s too heavy, denser than Gorilla Glass….

It’s harder, but not more shatter proof. It’ll scratch less but may not be more durable.

It’s less transparent.

So assuming all of the above is true to some degree:

It’s heavier, less transparent, at greater risk of shattering and costs 10x more –> but is much more scratch-resistant. There’s some scepticism…but is it a case of hater’s gonna hate?

2) iPhone Back – no one’s saying this (at least no one I’ve heard as yet …)

iPhone backs (the metal bits) are what seems to get scratched the most; a very thin sheet of Sapphire coating the back would make it super-awesome. Shatter-resistance would come from being bonded to the metal underneath?

3) Trackpads – Sapphire is insanely smooth; much much smoother than glass. Fingers glide so much more freely.

Not as big as screens. Less to worry about in terms of weight and transparency. Perhaps it’s trackpads on MacBooks?

4) Some new device altogether – perhaps some kind of remote….?

Go on, tell me what you think ….leave a comment….

Cloud Storage

19 Wednesday May 2010

Posted by Grynn in lifehack, tech, trends

≈ Leave a comment

[EDIT: Update]

Wrote this post thinking about Google Docs. Turns out Google is copying Amazon and has come out with its own “Google Storage for Developers”. Basically identical to Amazon, just that it costs $0.17 per GB per month instead of the $.20 per GB per month that Amazon charges. Data transfer in and out costs a heck of a lot of money, especially to-from APAC ($0.30 / GB)!

Which means running your own storage server (in a well built and well managed data-center) is probably the best bet. A decent server with decent storage say, 2Terabytes of disk (1TB x2) costs about $100 per month which is … $0.1 GB/month with RAID level 1 – Mirroring or $0.5 per GB/month with RAID level 0 – striping. In all practicality there will be no further data-transfer charges.

‘Course you have run your own linux distro, but you can choose whatever super cool filesystem you want. If you use Kimsufi.co.uk you can run Proxmox VE (or VMWare or Hyper-V) + a pre-packaged appliance like Openfiler.

[EDIT: Original Post continues]

Google is nearly an order of magnitude cheaper than Amazon S3 for cloud storage!

  • Google: Max 1GB, Crappy interface for large files, tools ecosystem not as rich as S3.
    • 80 Gb for $20 p.a (see: https://www.google.com/accounts/PurchaseStorage?hl=en)

  • Amazon S3: Max 5Gb per file. Decent tools. Have to pay for good usermode filesystems. EBS allows you to easily store/mount true-crypt encrypted volumes.
    • 80 Gb for $192 p.a (full redundancy)
    • 80 Gb for $96 p.a (reduced redundancy storage)

And Google has no data-transfer charges … which can be very, very substantial! Amazon is free for inbound data till June 2k10 …

I think I’m going to start transitioning my content from S3 to Google. Going to try and store my everyday desktop as a VM image – let’s see how that goes.

BTW: Noticed that Reliance has substantially lower latency than Tata when it comes to international bandwidth. Round-trip times under a 100ms for servers in Paris/London. Which means remote desktop may actually be usable. I remember a senior (and brilliant, though understated) colleague, saying that anything under 200ms is ok for UI tasks … (this is when I was developing embedded devices and we were trying to work out how fast we needed the processor to be …). Methinks Tata goes via SGP => TKY => NYK to reach LDN (they acquired Tyco). Reliance on the other hand owns FLAG and can go via the Middle East. When I’m next on a Tata line, I’ll check out ping times to NYK. Should be about the same either way to NYK (~250ms), but LDN should be 400ms via Tata if I’m right.

I think Amazon has servers in SGP. I think Google is more of HKG play – which will add some 50ms to round-trip times.

The Fourth Estate

05 Monday Apr 2010

Posted by Grynn in culture, trends

≈ Leave a comment

While WIMWI Profs go on and on about the poor quality of reporting in India, no one seems to notice the astoundingly poor quality of reporting in the UK.

See http://bit.ly/9hZhsJ. Now read the realz here: http://bit.ly/d6ipTn  and checkout http://bit.ly/9z9sLu

It has begun ….

29 Monday Mar 2010

Posted by Grynn in finance, trends

≈ Leave a comment

Tags

avc, BRIC, fred wilson, investing

The globalization of the internet …

  • Google: 890mm worldwide visitors, 745mm non US – 84% non US
  • Facebook: 471mm worldwide visitors, 370mm non US – 78% non US
  • Twitter: 74mm worldwide users, 53mm non US – 72% non US

The BRIC countries are going to be the most important markets going forwards…. now is the time to invest in Internet properties in India/China etc. Properties with an Indian focus like say Rediff.com are going to be increasingly important, possibly more important than Facebook and Twitter in the coming decade.

All your base….

Note: stats nicked from a post by Fred Wilson who is superb at detecting trends before they’re "trendy”.

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