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Lyn Alden

@LynAldenContact

Feb 16

It helps to be familiar with generational theory and Fourth Turning type stuff in this macro environment.
en.wikipedia.org/wiki/Strauss%E…

It contextualizes things that seem "unprecedented", because much of this happened 80-100 years ago.

Basically, social contracts and institutions inevitably suffer from entropy. What gets built, eventually decays and gets corrupted.

After many decades, new generations push back against those institutions, and build the next cycle of institutions to replace them.

Generational theory itself seems too qualitative, too "voodoo". A common criticism.

As someone who thinks quantitively, the breakthrough for me was realizing that all of their "Fourth Turnings" (where institutions get challenged and rebuilt) align with long-term debt cycles.

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Lyn Alden

@LynAldenContact

Feb 15

@mcuban

@mcuban My view is not that PoS has no use case. Instead, my view is that it is inherently equity-like in terms of governance.

PoW blockchains basically recreate commodities in digital form.

PoS blockchains basically recreate equities in digital form.

@mcuban

@mcuban I agree that market forces will affect governance for PoS smart contract platforms. Analyzing them involves analyzing their governance and their product, similar to how one would analyze competing companies.

@mcuban

@mcuban A risk for the PoS space is that as time goes by, newer ones seem to sacrifice some decentralization for faster/cheaper transactions. Decentralization doesn’t matter much until one day it matters for everything.

Kind of like supply chain resilience.

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Lyn Alden

@LynAldenContact

Feb 15

The producer price index is showing initial signs of hitting a local peak in year-over-year rate of change terms. Sideways-to-down from here for a period of time would not be surprising.

The monthly figures have been high for a year now, so if they stay at this level, the year-over-year figure tops out.

I think the key thing to watch is energy, and energy capex particularly. If there is a variable that could blow the top off of inflation and accelerate it rather than hit a local peak as my base case is for, energy would be a likely contender.

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Lyn Alden

@LynAldenContact

Feb 15

Proof-of-Stake is legacy tech. It's what corporations and banks have run on for centuries.

It's outdated and oligopolistic. And yet, still useful for centralized systems.

Proof-of-Work is the new innovation, especially when combined with difficulty adjustments.

Consensus mechanisms that don't involve work... instead involve governance.

Work is the only thing that can reduce or eliminate governance.

Proof-of-Work systems can be a commodity. Proof-of-Stake is inherently an equity.

I like equities. But equities aren't commodities...

If anyone needs the full run-through, see my analysis here:
lynalden.com/proof-of-stake/

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Lyn Alden

@LynAldenContact

Feb 14

Being a market bear is hard in this era because they are shorting assets against a unit of account (the dollar) that increases in supply by an average of 8% per year with negative real rates.

It’s like measuring things with a yardstick that keeps getting shorter.

Shorts can make for useful hedges. And there are professional shorters like J Chanos. You have to know what you are shorting against.

Outside of specialists, the problem is the money itself; the money now devalues at such a rate that most decent assets are structurally bullish.

For example, I’m relatively bearish on $AAPL due to high valuations. But would I short it against dollars? Nah.

Due to buybacks, it decreased in supply from 26 million to 16 million, and pays the same yield as cash. I’d only short it against something else that is hard/scarce.

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Lyn Alden

@LynAldenContact

Jan 31

Shares of Apple stock are a deflationary asset; the number of units continues to decrease over time.

Fungible shares of corporate ownership have been somewhat monetized over the past decade, as actual US gov currency (bank deposits and T-bills) fail to yield above CPI inflation.

In other words, investors ask themselves, "would I rather hold dollars that are currently increasing by 12% per year in quantity and yield sub-0.50%, or hold $AAPL shares, for which there is less each year and also yield about 0.50%?"

Apple shares peaked at ~26M, now at ~16M.

In exchange for this decision, $AAPL shareholders take on more volatility, and tie themselves to the success or failure of 150,000 employees to make good products.

It's like investing in the currency of a small country, with close ties to the US and China.

Network effect.

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