A thread on thought process for special investing in digital assets .... courtesy of $LEO
Step 1: Identify a new catalyst (news, a merger, something unnatural...)
https://twitter.com/CryptoWhale/status/1382392286819057668
Step 2: Analysis
The stolen funds probably not getting dumped that easily, how else could they monetize?
The stolen funds probably not getting dumped that easily, how else could they monetize?
https://twitter.com/adamscochran/status/1382398992106074117
Step 3: Recall some ominous and seemingly unrelated tweet that may in fact be related
https://twitter.com/paoloardoino/status/1381962781071577103
Step 4: Mosaic theory
(from the original $LEO whitepaper)
(from the original $LEO whitepaper)
Step 5: Risk / Reward & Probability analysis
Upside: If stolen $BTC is returned to Bitfinex, they will have to use 80% of ~$7 bn to repurchase the $LEO token which only has a $2 bn market cap... um, that would be tough -- anticipate a tender offer or a fast move to $6.
Upside: If stolen $BTC is returned to Bitfinex, they will have to use 80% of ~$7 bn to repurchase the $LEO token which only has a $2 bn market cap... um, that would be tough -- anticipate a tender offer or a fast move to $6.
Step 5 (cont'd) Risk / Reward
Downside: If I'm wrong, $LEO is still cheap based on P/S, P/burn, and relative value. It's a slow moving amortizing token from a cash-flow positive company, and the upside scenario is not priced in.
Thus, good downside protection
Downside: If I'm wrong, $LEO is still cheap based on P/S, P/burn, and relative value. It's a slow moving amortizing token from a cash-flow positive company, and the upside scenario is not priced in.
Thus, good downside protection
Conclusion: Special situation investing is all about risk/reward and probability analysis.
We look for opportunistic upside where downside is limited, where we pick up "cheap optionality". Even when probability is low, these investments generally have solid payouts.
We look for opportunistic upside where downside is limited, where we pick up "cheap optionality". Even when probability is low, these investments generally have solid payouts.
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