This Week in … Investing
Innovation Week Review 22/2022
In December 2021, at the podcast recording "Year in Review," I was talking about the investing year 2022.
The last 12 years were a time of rising asset prices, low inflation, low-interest rate, and stable supply chains.
Two developments that I didn't expect in December 2022:
Jerome Powell is increasing interest rates in a weak post-pandemic economy due to the disruptions of supply chains
A war between Ukraine and Russia
Both developments have turned markets upside down.
It is not an unexpected effect that rising interest rates affect other asset prices. That's why I thought it wouldn't happen — at least in 2022 — but at a later time when society and the economy recovered from lockdown policies.
And then, with the beginning of the Russian/Ukrainian war, energy prices began soaring. Some say it is because of money printing, and others say that the disruptions of energy supply chains lead to an expectation of rising prices that become self-fulfilling.
However, the global economy is in a state of flux.
What were the major highlights of last week?
SPACs Are Warning They May Go Bust
SPACs gained fame in the last two years. Special Purpose Acquisition Vehicles are designed to collect capital into a listed empty corporate shell.
Once they have capital paid in, they start their search for a private company whose business model is a suitable fit. After both entities merge, the SPAC is a fully operating public company.
According to the article, at least 25 companies that merged with special-purpose acquisition companies between 2020 and 2021 have issued so-called going-concern warnings in recent months, according to Audit Analytics.
SPACs Are Warning They May Go Bust
Amid crypto market turmoil, Andreessen Horowitz announces a $4.5 billion web3 fund.
Raising interest rates resulted in a slashing of crypto prices. The biggest crypto that went bust in the process was Terra/Luna.
But also, the Bitcoiners didn't get their 500,000 dollar price target in Q1/2022. The prices didn't go northwards, and they decided to move to southern territories. At the time of writing this article, Bitcoin cost 30,000 dollars.
The first writers started stating that the crypto craze was coming to an end, and it began the long crypto winter. It reminded me a bit of Game of Thrones — Winter is Coming.
And yet, amidst the biggest turmoil since 2018, a16z ventured out to raise more capital. What for?
Investing in the Crypto Eco-System
Amid crypto market turmoil, Andreessen Horowitz announces $4.5 billion web3 fund
The Rise and Fall of Wall Street's Most Controversial Investor
Do you remember 2020?
First, the market crashed, and then the big pandemic equity bubble came out of nowhere.
In this upward movement, Cathie Wood was elected the most successful investor with a mesmerizing gain of 150% in her flagship ARK Innovation ETF.
Wood's investment style is betting on the synergy of novel technology, considering the huge potential for volatility.
Now two years later, as the asset bubble starts bursting, or at least letting some steam off, the ETF is back to prepandemic prices.
In January 2020, the price was 50 dollars, and today it is 45$ per share.
The peak price in October 2021 was 154 dollars per share.
Cathie Wood and her team still go for the next generation of tech and deep tech companies, although some analysts already explain why her strategy fails:
Wood’s willingness to make such calls so far ahead of reality — and so out of step with Wall Street’s old guard — has earned her a rockstar reputation among stonks-obsessed retail investors, making her a mascot for buy-the-fucking-dip Robinhood traders, some of whom have dubbed her “Cathie Bae” on Reddit.
The Rise and Fall of Wall Street's Most Controversial Investor
Upcoming Conversations:
June 10, 03:00 pm CET - Jonathan Sporn, Gilgamesh Pharmaceutical - How Psychedelic Drugs Help Ease the Mental Health Burden in Society
June 10, 07:00 pm CET - Ivan Anz - Philantroinvestor - tbd
June 21, 05:30 pm CET - Carol Sanford - Author of Indirect Work
July 5, 04:30 pm CET - Devin Durrant - Author of The Values Delta
2 Podcasts from this week:
#AIS: Pear VC’s Mar Hershenson on making successful founders
#77: Alexander Valtingojer - How to Invest in Digital Assets
1 Youtube Takeaway from this week
Books I am reading this week
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Indirect Work: A Regenerative Change Theory for Businesses, Communities, Institutions and Humans by Carol Sanford
Best Quote From This Week
“At times, our own light goes out and is rekindled by a spark from another person. Each of us has cause to think with deep gratitude of those who have lighted the flame within us.” – Albert Schweitzer
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