Joined May 7, 2012
204 Blog Posts

Arcade City to launch Sept 1st

Arcade City is a decentralized ride sharing service set to launch September 1st. It aims to compete with Uber and Lyft.

What makes Arcade City different is that it’s goal is to have the Arcade City network be the service. Riders and drivers will connect via an app and all payments will be automated peer to peer. There will never be a corporate Arcade City setting rates, policies etc. Cryptocurrencies like Bitcoin and Ethereum are set to the be payment methods.

Drivers and riders can name their own price. The market will work it out, in theory.

Arcade City is a test for a decentralized service going head to head vs major for-profit services like Uber and Lyft. Arcade City is a fascinating and ambitious project and one to watch.

Comments »

Bitcoin AKA Magic Internet Money

Screen Shot 2016-08-24 at 11.07.21 AM

Most people who have heard of Bitcoin think Bitcoin is Magic Internet Money.

In layman’s terms Bitcoin is a series of entries in a distributed ledger called the Blockchain. The entries in the ledger are secured through cryptography. Cryptography is also used to protect your online banking website. At a high level Bitcoin and your banking website security are similar. The only way to spend a bitcoin is to possess the secret key which matches a public entry on the Blockchain. Unlike a bank, the Blockchain is publicly accessible and censorship resistant.

No one person or entity controls Bitcoin or the Blockchain so no one can manipulate Bitcoin to serve their own purpose. Due to this distributed and decentralized ledger it’s impossible to counterfeit bitcoins and impossible to shut down Bitcoin. Bitcoin is a protocol running on thousands of computers across the globe. Since bitcoins are digital they are easily transferable and easily divisible (all advantages over gold).

Here is a randomly selected transaction from Blockchain.info This transaction shows 20BTC (~$11,000) was moved for a .00027BTC ($.11) fee. The transaction should be 100% confirmed, complete and irreversible within 30 minutes. No third parties required and the transaction is practically anonymous. Those bitcoins could be destined for anyone in the world. That’s not a problem for Bitcoin. Try that with gold or fiat currency. Moving $10k via a US bank requires a special form so the nice government men can keep an eye on you.

How do you send bitcoins?
(I won’t go into setting up an account to acquire bitcoins, there are plenty of tutorials. Here is a referral link for Coinbase.com if you want to shorcut that.)

Here is an example of a bitcoin address: 1EnhQvrtYDpKqMrDBM9C2UiNFdt3Jr9fAG and the corresponding QR code below. From the smartphone bitcoin app of your choice you scan the code, choose the amount and press send. The bitcoins arrive within minutes. Here’s a record of every transaction on that address (currently 0, feel free to send a small amount to see it on the blockchain). This may sound complicated but it’s not. Much easier than moving money from a bank account.

Screen Shot 2016-08-24 at 11.39.06 AM

BTW, Bitcoin’s market cap is now over $9 billion. If you still think Bitcoin is a joke here’s a list of the top 100 richest addresses. Many people store millions of USD in Bitcoins.

If anyone has heard of Bitcoin they’ve likely heard how Bitcoin was hacked (again) and how Bitcoin has been declared dead a dozen times by mainstream media. Casual observers may have heard that the Winklevoss twins opened a Bitcoin Exchange or they may have heard Mike Tyson lent his name to a Bitcoin ATM in Vegas.

You could say Bitcoin credibility is lacking.

I don’t believe you could write a worse story for Bitcoin if you tried. The largest exchange for buying and selling Bitcoin up until a few years ago was Mt Gox. Mt Gox stood for Magic the Gathering Online Exchange. Mt Gox was originally a place for neckbeards to trade Magic the Gathering game cards. True fucking story. Eventually Mt Gox became a place for neckbeards to trade bitcoins. Mt Gox imploded along with $460 million in client bitcoins. Bitcoin was declared dead, but what is dead can never die (extra GoT).

You see, Bitcoin is the Sewer Rat of Currencies. The TLDR of that article is that despite what’s been in the media, Bitcoin has never been hacked. Only the exchanges that sold Bitcoin have been hacked. In fact, Bitcoin has been tested over and over and has come back stronger each time. Bitcoin is a sewer rat. It can’t be killed but people keep trying.

bitcoin isn’t living in a bubble. Bitcoin is a sewer rat. It’s missing a leg. Its snout was badly mangled in an accident in last year. It’s not allergic to anything. In fact, it’s probably got a couple of strains of bubonic plague on it which it treats like a common cold. You have a system that is antifragile and dynamic and robust.

Bitcoin doesn’t give a fuck.

So why Bitcoin? Bitcoin has the six characteristics of money:

Objects used as money must withstand physical wear and tear
Check, bitcoins are digital. Theoretically they will last forever.

People need to be able to take money with them as they go about their business
Unlimited funds can be stored on a piece of paper or you can memorize a 12 word phrase.

To be useful, money must be easily divided into smaller denominations , or units of value
Bitcoin can be easily divided down to .00000001 AKA a Satoshi.

Any two units of money must be uniform or the same in the terms of what they will buy
All bitcoins are created equal.

Limited Supply
Money must be available only in limited quantities
There will only ever be 21,000,000 bitcoins and we already know the predetermined rate of inflation.

Everyone must be able to exchange the money for goods and services
This one is gaining traction everyday. You can use purse.io to get substantial discounts at Amazon using bitcoins.

With Trillions in QE, the EU in negative interest rate territory, Japan going all in on Abenomics and China building ghost cities it’s no wonder a decentralized currency like Bitcoin is starting to gain traction.

Whatever your portfolio looks like today consider it’s missing something if there’s no Bitcoin. Bitcoin could fail, but if it doesn’t then it’s future is incredibly bright. Bitcoin is the Internet of Money. A small position today could be the hedge you need against central banks, crazy politicians and a world gone mad. Caveat emptor, Bitcoin is extremely volatile.

If you add Bitcoin to your portfolio I highly recommend a hardware wallet like KeepKey. While Bitcoin the protocol is secure your greatest risk is leaving your bitcoins vulnerable to loss via sloppy security. Whatever you do, do *not* store your bitcoins with an online exchange.

Comments »

Book review: The Boy Plunger

The Boy Plunger is a biography of J.L. Livermore. J.L. Livermore (Jesse to those who didn’t know him) is the same person who is the subject of the seminal (no homo) investing tome Reminiscences of a Stock Operator.

While Reminiscences was known to be loosely based on Livermore’s life, The Boy Plunger endeavors to be a historically accurate biography of one of the most interesting financial figures ever born.

If J.L. Livermore were alive today he’d be selling Tim Cook’s gay AAPL short at 30 to 1 margin on Monday and by Tuesday be long 50 to 1. He was a fucking madman, much like our good patron saint of these halls, Le Fly. He made $100 Million in ONE week during the crash of 1929. That’s recorded as the most money ANYONE has made in seven days. Including that fuckface Zuckerberg. A few years later J.L. Livermore was bankrupt.

As appropriate to a man who became the richest person in the world inside of 7 days and then a few years later filing bankruptcy the story ends when he blows his brains out in a coat room at a NY hotel. It’s reported he did the deed with very little mess incurred. A gentleman to the end.

We pick up the story where young JL he left his mother at age 14 to move to Boston whereupon he walked into a bucket shop and lied to get his first job. A few short years later he is rubbing elbows with EF Hutton and then agreeing to being the savior Pierpont Morgan asked for (no Batman) when the entire market was going to collapse. You get a blow by blow account of the triumphs and tribulations of Mr Livermore and his impact on markets and companies that are still around today.

While his stock trades were interesting enough for several other books as a biography you really get a sense of the man who purchased and sold yachts for sport, bought a house that put William Chrysler to shame, used the Ziegfeld Follies as his personal farm system for mistresses and generally swung his enormous sack around on both the bull and bear side of the market for more than 25 years.

Throughout all the ups and downs J.L. maintains a stoic attitude and personal responsibility for every success and failure. He’s grounded 100% in what it is to be a Stock Operator. There are numerous quotes all of which are lessons in objectivity, controlling one’s emotions and being brutally honest with oneself when on the wrong side of a trade.

Cheers to you Mr Livermore.

(I highly recommend this book)

Comments »

My Portfolio in Video Form

This video reminds me of my portfolio. I am the fireman rushing from stock to stock to put out fires.

Most fires have been of the small backyard variety but I have had some multi tenant highrise torchers as well.

Sometimes the market works with you, sometimes against you. Lately it’s been against. Here’s to a better 2013.

Comments »

VMW: Stay Within the Lines

VMW has been range bound for ~2 years. How range bound? It’s imitating the basejumpers in this video going up and down a tower in Kuala Lumpur over three days.

Buy at 87 and sell at 95ish will be my game with VMW.



Comments »

You know nothing John Snow (FB and YELP)

A few weeks ago there were several IBC blog posts bashing FB and YELP. I should know, I wrote several of them.

Look at them now. FB is up more than 20% since June 1. YELP up for 50% gain.

RaginCajun and ChessNWine opened and closed FB positions. IBC blamed FB for everything from egregious stock losses to impotence. There was no more unpopular stock than FB at ~$26.

Let’s be honest, this is a Costanza market. When there is that much hate for a stock step back, clear your mind and consider: is this a buying opportunity? Buying the blood would have been extremely profitable here.

Never catch a falling knife you say? Well, I think these stocks were hammered on sentiment. Moods change faster than fundamentals. Negative news can fade quickly. Long term I maintain FB and YELP are not buys for my style, but looking back I can see where I missed a huge opportunity.

Hindsight is 20/20, but sometimes history repeats itself. If you fail to see that pattern repeatedly you are not learning.

Buying those stocks at the same time I penned missives outlining their flaws would have been hard. But there are times that’s exactly the right thing to do.

Sometimes we’re all John Snows in this market.

Comments »

Stick a Fork in $YELP

Google just added a “Local” section to Google+.


Partially true. Today. But the people that matter do (the early adopters), and the rest will follow. Google has a long term plan to organize the world’s information. Ever use their search? They seem to be doing a pretty good job of it so far.

As far as users, the yardstick by which these services are measured, Google reviews are already integrated into Google Maps, which people use everywhere. Works great on mobile.

(EDIT: Just found out GOOG bought Zagat. I did not know this and so changes some of the angle of the rest of this post, but I have not edited anything from the original)

YELP put up a fight when Google began integrating YELP reviews on Google services. I am not sure if that’s still being done, but if it is and I were YELP I would encourage it…hoping one day I could marry my baseborn children to the regal house of Google (no Lannister).

Sure, YELP has mobile apps. But YELP is a one trick pony while Google + is a darkhorse. The kind of horse that sneaks up in the middle of the night and violently horsesexes other Internet companies.

The Social Media party is over. There will be contraction. Labeling yourself as “Social Media” is the 2012 equivalent of being a dot com. Social Media will no longer be a special term, it will be part of life and any added value will disappear. The bloom is off the rose.

The Internet is king. User experience is king (no AAPL). Access anywhere is king. Google is all these things. All hail the King.

YELP won’t die today, but the writing is on the wall. If they are smart they’ll be YouTube and cash out so they can smoke Rick Ross blunts rolled from the flayed skin of their competitors. Hopefully, YELP won’t channel GRPN who has teetered from one near death experience to another a la Gary Busey.

I’m not a buyer based on a buyout, but I think it’s YELP’s best future hope for investors and their own longevity to be an arrow in Google’s quiver.

The time is now for YELP to make that move.

Comments »

Only Happy When It Rains

As a confirmed bear shitter in King Le Fly’s court I am making efforts to retain my top hat during this market swoon, covered in burlap as it may be. However, I will not expose any additional funds to shorting the market. I am already in over my head and bailing water from Q1 2012.

Yes, I got net short before the epic takeoff of Q1 2012. Fuck you very much.

However, I have one pick I believe will be monstrous over the long term: GOOG. It’s everything YELP, FB and others pretend to be and more.

GOOG is the Internet. People just don’t get it. With newly available Chromebox and Chromebooks GOOG takes another step into complete domination.

I will flesh this idea out when time permits. For now I’d love to see GOOG swoon with the market below 500. I would be a big buyer.

In the meantime, here’s an anthem for the few bears on IBC.


Comments »

This is where Facebook Works

I run a consulting business. For me, FB is a blackhole of advertising dollars.

I have an artist friend who draws robots. His advertising dollars on FB have resulted in 10’s of thousands of page fans, customers from Europe and Asia and a very significant bump in revenue.

FB ads are great for that type of niche player. The deep personal dataset that FB has about it’s users can identify jackasses who would buy robot paintings from across the globe, greatly benefiting my robot drawing friend. GM is getting shit canned for backing off on FB ads, but it’s just a result of the fact that GM knows FB ads don’t work for selling cars.

But, if you sell robot paintings FB is awesome.

Does that make a company worth $100 Billion?

On a related note, I caught up with a colleague I hadn’t seen in a long time. I asked how business was going and he told me he has switched jobs. He now does “Facebook consulting”. Intrigued, I sat with him for an hour and asked questions. He told me that being “liked” on Facebook is the best customer marketing drip campaign tool available. He estimates a “like” on FB is worth 10x the value of someone’s email address.

Here’s how Likes works as a basic formula. You are friends with “thefly” on Facebook. Fly likes the page of my friend who draws robots so now he receives robot updates in his stream. Fly then likes a robot drawing. You see that in your stream and since you know and like the Fly and have a passing interest in robots (I mean, who doesn’t) you are more likely to look at the pic, reshare, follow the link etc. It’s a 1+1=3 type scenario. Your friendship with Fly plus everyone’s passing interest in robots = 3x more likely to gain your attention. Add a request for action and that doubles. It all starts out with Fly “liking” the robots page. This is why you see LIKE buttons on every web page and at many local businesses. Look around, you’ll see LIKE logos/buttons are everywhere.

Additional FB marketing tips from our conversation. Using pictures in posts are far more valuable than a plain text update. If you can use a LOLCAT in your marketing or with your product, you’re golden. GM’s best FB tactic would be to poster their new cars in LOLCATs and put them on FB. They would get instant 500 Million “likes”. People fucking love cats.

Other stupid basic psychology, posting a pic with some text resulted in X number of “likes” and shares. A month later posting the EXACT same pic and text along with “Please share if you like this post” resulted in 10x the number of shares. People are really that checked out when using FB. A simple request results in high compliance. The Psychology of Facebook would be an interesting read.

I have bashed FB in several posts. I felt it was time to give them credit where it’s due. FB ads are very effective for the right niche. The problem with the IPO is that few people understand that niche and how to put a valuation on it.

Comments »