Living rent-free, spending less than he earned and investing the rest were his key secrets

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Photo by Austin Distel on Unsplash

We have all heard about the Financial Independence, Retire Early (FIRE) movement which has become particularly popular amongst Milliennials in the past years. The strategy consists in 1) maximising one’s savings by increasing income and reducing expenses; 2) Using those savings to acquire assets, notably indexed funds. The objective here is to accumulate enough assets so that the passive income generated from those assets cover one’s living expenses. Once financial independence is achieved, paid work becomes optional, allowing for retirement many years before the standard retirement age. Having said this, one of the key criticism of this movement is that FIRE is only doable when one has a high salary, low debt and no children. …


Unlike in 2017, the current Bitcoin bull run looks sustainable

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Photo by Thought Catalog on Unsplash

Bitcoin has skyrocketed to $19,000 a coin after it dropped to $3,122 in late 2018. The cryptocurrency is now almost back to its all-time high value of $19,783 reached in December 2017. In the last two months alone, the cryptocurrency has added almost $10,000 in growth. Most market participants believe Bitcoin’s current bull run is sustainable. JP Morgan predicts its price can achieve $140,000+. Here’s why:

#1. Worldwide quantitative easing

Quantitative Easing or QE is a monetary policy whereby a central bank buys government bonds or other financial assets by printing money in order to inject liquidity into the economy. This is typically done during times of crises as governments try to stimulate economic activity. In response to the massive economic contraction stemming from Covid-19, many central banks around the world, including those of the US, Europe and Japan, have engaged into unprecedented levels of quantitative easing. And, as governments print trillions of dollars, the value of fiat currencies (national currencies) depreciates. …


Whether you are interested in buying the shares or not, here are the five main take-aways from the filing

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Photo by Evan Dvorkin on Unsplash

Airbnb started in 2007 when two friends from design school, Brian Chesky and Joe Gebbia, decided to rent airbeds in their apartment to help pay their rent. That year, they realised that an international design conference was coming to San Francisco where they lived and that every hotel was sold out. They created a website, AirBedandBreakfast.com and hosted three guests. Something magical happened over that weekend, Brian and Joe treated their guests as if they were old friends and their guests felt like locals. This was the birth of Airbnb. In 2007, Airbnb started with two hosts. Thirteen years later, the platform accounted four million hosts and generated revenues of more than $4 billions in 2019. We sipped through the 350 pages of the IPO S-1 filing. …


Seek Monopolies, Avoid Competition

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Photo by BP Miller on Unsplash

Peter Thiel, who turned into an entrepreneur and a venture capitalist after he succesfully co-founded and sold PayPal, has just seen his net worth jump to over $5 billion dollars in recent months. This is quite an achievement having started with ‘only’ $10 millions after Paypal was sold to eBay in 2002. He developed his investing strategies in a controversial book called Zero to One where he states that competition is for losers. …


The hype around special-purpose acquisition companies is the ultimate sign of the current stock market bubble

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Photo by Zdeněk Macháček on Unsplash

What is the common denominator between Nikola, Virgin Galactic and Draftking? They all listed their business by merging with a Special-Purpose Acquisition Company (SPAC). SPACs, also known as blank check companies, are essentially large pool of cash which is listed on a public exchange with the sole purpose of completing an acquisition. SPACs managers would typically raise hundreds of millions if not billions in cash and get paid hefty fees should they acquire a business. They are ultimately incentivised to do a deal at any price, even if they end up overpaying for it. Investors, on the other hand, go in blind as to what they are buying into, provide capital to SPACs managers and trust that they will do something useful with it. The hype around SPACs got so crazy that most of them trade significantly above cash value, some have seen their share price fly by up to eight folds in a matter of weeks after a deal was announced (Nikola shares). We have seen college students promoting them, even sports managers turning themselves overnight into SPACs founders to surf on the hype. …


He netted $2.6 billions with only $27 million investment earlier in the year. He placed a similar trade the day Pfizer announced its new promising COVID-19 vaccine

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Photo by Markus Spiske on Unsplash

Bill Ackman has placed a new position against corporate credit, betting that companies will struggle to pay their debts. This is only eight months after he cashed in $2.6 billion profit in a month on the back of a $27 million investment. In a previous article (link here), we stated that Bill Ackman’s trade earlier this year will go down as one of the greatest trades in the history of financial markets. He achieved in a month what Michael Burry, the famous hedge fund manager portrayed in the movie ‘The Big Short’, achieved in many years.

A genius trade in early 2020

As the coronavirus pandemic started to spread in the Western World in Mid- February 2020, Bill Ackman, hedge fund manager and CEO of Pershing Square Capital Management, got worried about what would happen to financial markets. To protect his portfolio, he put through a bet against $71bn worth of investment-grade bonds via the purchase of Credit Default Swaps (CDS). This is a similar instrument used by Michael Burry to bet against mortgage securities back in 2008. …


How King James went from an all star NBA player to an all start entrepreneur

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Photo by Project 290 on Unsplash

Professional athletes, like lottery winners, are notoriously bad with money. From Mike Tyson, Dennis Rodman to Vince Young, examples of once highly paid athletes who went broke are numerous. After retiring, very few athletes turn into businessmen. A small minority of those become successful. Lebron James stand out here by not being one of the greatest players that has ever played in the NBA at the same time he displays high business acumen. From rejecting a $28 million check from Reebok when he was at high school, seeking partnerships with brands he works with over endorsements, buying stakes in businesses to creating his own media company, King James can teach us a great deal about entrepreneurship and business growth. …


Familiar with technical and fundamental analysis? Discover social information arbitrage, the new way of stock investing

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Photo by Jakob Owens on Unsplash

It took Chris Camillo, a young trader, years to come up with this successful trading strategy. After losing his entire savings in the stock market in his early years of trading, he completely changed the way he invests when he read Peter Lynch’s book — One up on Wall Street. The book was released in 1989 but Chris Camillo got his hands on in mid-2000s. Peter claimed that the only way to beat the market is by having an information edge. Chris Camillo has adapted this quote to today’s era by picking up on new social trends or cultural shifts that are meaningful catalysts to a stock price move before Wall Street picks up on them. This helped him turn $20k into a staggering $21 million dollars over a period of 14 years. Chris Camillo has even been featured in Jack D. …


How they use our psychology to trick us

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Photo by 卡晨 on Unsplash

We all came across Instagram posts, Youtube ads and Linkedin posts trying to sell us a shortcut to success, the secrets to become a millionaire, or how to 10x our passive income. The promise in most cases boils down to ‘how you can earn more money than you have ever imagined, easier than you ever thought possible’. These claims are usually accompanied by a picture or a clip of fake entrepreneurs in a private jet, a Lamborghini or an expensive mansion. We get sold how our life would look like if we buy their course, join their mastermind or attend their webinar. Once we click on the first advert, we enter their sales funnel. There is an exact science behind how they use our vulnerabilities to manipulate us to get us to buy their program. There is a misconception that only thick people fall for con artists’ tricks. This is simply not true. It has less to do with IQ and more to do with where we are in life. …


At age 30 and while working for the hedge fund DE Shaw, Jeff Bezos came across a staggering statistic that sparked the idea to start Amazon

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Photo by Christian Wiediger on Unsplash

A sudden stop to a career on Wall Street on the back of reading an article on web usage

After graduating from Princeton in 1986, Jeff Bezos worked as an analyst for the hedge fund DE Shaw in New York. Given his background, Jeff was destined to have a successful career on Wall Street. At age 30 and while tasked with researching potential business opportunities involving the then brand-new internet landscape he came across a startling statistic: Web usage was growing at 2,300% a year.

In a speech has given to university students in 1998, he stated that: ‘Human beings are not good at understanding exponential growth. …

About

Adam Aya

Proud Father | Stock Market Analyst | Passionate about Building Things | Life Witness

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