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Lyn Alden Profile picture
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7 Mar, 4 tweets, 2 min read
Congrats to @JanBlachowicz for his successful title defense. Commentators were pretty biased against him during the fight but he had a near-perfect conservative approach. The champion was the betting underdog and even during the fight, he didn't get enough respect. #UFC259
There's a lesson in here about markets somewhere, probably around the topic of bias.

Imagine a fight where one person objectively lands more hits in every round (and bigger/harder), and yet commentators and viewers think the other person is winning.
Partly this is from charisma/narrative momentum going into the fight, and then also how they "look" while fighting, with one looking crisp (but getting hit more lol) and never really putting the other in danger, and the other looking slower (but hitting more, and harder).
Only in the final two rounds when the slower/stronger fighter out-grappled the other more charismatic fighter, did folks concede that he won. And yet quantitatively, he was already winning the striking game in the earlier rounds, yet few realized it or cared.

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More from @LynAldenContact

Lyn Alden Profile picture
19 Feb
Unless Yellen changes plans, then during the next several months, over $1T from the Treasury General Account is going to pour into bank reserves.
Despite massive T-bill issuance, there is actually a shortage of T-bills out there now relative to capital (complete opposite problem of late-2019 repo spike).

Short end of the Treasury curve is falling due to collateral shortage, while long end is rising.
For example, after the 2019 repo spike, the problem was too many t-bills vs cash. The Fed's transition from repo support to outright QE (T-bill buying) in was predictable a couple weeks in advance.

Read 6 tweets
Lyn Alden Profile picture
16 Feb
It'll be interesting to see who has the balance sheet capacity to absorb the Treasury issuance in the second half of 2021, and at what price.

1H2021 won't have much Treasury issuance, due to the planned TGA drawdown. 2H2021, however, likely gets tight.
If the private sector has to buy it, yields likely go higher, which all else being equal puts pressure on growth equity valuations.

If the Fed has to step in and buy more Treasuries for lack of sufficient demand, that's kind of Minsky Moment for the dollar.
This will require monitoring all year. The problem was going to start earlier, because Treasury was planning a ton of issuance in 1H2021, but under Yellen, the Treasury revised that down on February 1st to draw down TGA for now instead. So now more like a 2H2021 issue.
Read 6 tweets
Lyn Alden Profile picture
4 Feb
Quick thread on $AMZN valuation.

From a price to sales perspective, it remains elevated compared to its history:
However, operating cash flow has grown more quickly than revenue.

From a price to cash flow perspective, Amazon is near the mid-to-low end of its historical valuation range:
Amazon stock has followed a 25x operating cash flow multiple almost like clockwork for nearly two decades.

Chart via @FASTGraphs
Read 4 tweets
Lyn Alden Profile picture
22 Jan
Ethereum folks including @BanklessHQ and @VitalikButerin crowdsourced a response to my Ethereum article:

newsletter.banklesshq.com/p/open-reply-t…
Some responses are fair (e.g. the hash rate chart wasn't ideal), while other ones I still view differently.

The core thesis of my article (Eth still very early on in development; changing the underlying structure while building on top of it) doesn't appear to be disagreed with.
Another paper I would direct folks to is this one: s3.eu-west-2.amazonaws.com/john-pfeffer/A…

Three years old but still highly relevant (and arguably playing out a bit at this point).

TLDR: token appreciation (mkt cap) and ecosystem growth (trans volume) not necessarily correlated long-term.
Read 5 tweets
Lyn Alden Profile picture
18 Jan
My recent article on Ethereum provoked a lot of responses in favor and against, which is good.
lynalden.com/ethereum-analy…

One of my goals is to identify what is an institutional-grade blockchain, and what is not yet one.
For example, when I bought BTC in April 2020 at $6.9k, this ended up being right ahead of a wall of institutional money that came into BTC throughout the year.

The risk/reward ratio was very strong. Not the highest absolute return (could have bought TSLA yolo calls), but great.
More importantly, I like the BTC project, the ecosystem, what it enables, and the options that it gives to people around the world.

Permissionless payments and self-custody stores of value are important for the world to have.
Read 9 tweets
Lyn Alden Profile picture
9 Jan
There’s an old Zen koan that goes, “if you meet the Buddha, kill him.”

In other words, when something is self-verifiable or self-iterating, looking too heavily towards the originator can be a distraction along the path. Results speak for themselves.
Some folks have applied that to Bitcoin as well.


For example, sometimes there are debates about Satoshi Nakamoto’s original intent. Should block sizes be increased to facilitate “e-cash” or should block sizes be kept small for any user to run a node?
This is the type of problem encountered by engineers all the time: trade-offs.

A project can iterate or stay the same depending on what the market says.
Read 15 tweets

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