Mostly Software

  • Tuesday

    • Acervus Securities is the name of Addepar’s marketplace: https://addepar.com/blog/introducing-marketplace (ASIM = investment manager)
    • Celebrate failures to encourage speed; only at the beginning of the company. https://blog.southparkcommons.com/move-fast-or-die/
    • I constantly yawn during the fast (sympathetic) portion of wim hof breathing. This is not uncommon.
      • I’m up to about 3-4 minutes for the exhale breath hold (parasympathetic) portion.
    • Equityzen.
      • Create an SPV. Buy large blocks of PE and move into the SPV.
      • Issuers/companies are ok selling these blocks of shares because they know EZ. The model is known and friendly. The company can control the total equity. They’re ok with EZ on their cap table in X amount.
      • EZ then splits the SPV into units, selling to PE buyers on their secondary marketplace.
      • EZ has info asymmetry though; they control everything through their platform.
    • If a lender/investor/fund holds an asset, it can usually be rehypothecated. Leverage again for the holder’s own purposes to get secondary yield. This is much harder to do with illiquid assets (like PE), making them (relatively) less attractive collateral classes.
    • Adjusted butcherbox, basically making my regular orders everything that’s mass-efficient (~3lbs in each of my 6 slots, plus free 2lbs ground beef, yielding a total of 18lbs of meat for $170/mo or ~$10 per meal). Then go to member deals every month for the good stuff that’s not mealprep.
      • Regular 6: chicken breast 3lb, thigh 3lb, pork loin roast 3lb, butt, 3.5lbs, salmon 2lbs, cod 2lbs.
      • Overall this service actually isn’t cheaper; $10 for a pound of raw meat is not good. I’ll probably cancel soon.
    • About 1 in 3 business owners in the US partner with BoA Business.
    • Quid’s second fund totals $320M for PE shareholders to borrow against and was led by Oaktree, Davidson Kempner, and some northeast ivy league endowment. They’ve loaned against Palantir, Uber, Lyft, Unity.
    • To retitle your home and transfer the deed over to the trust, it costs a few hundred.
    • Joe Lonsdale, GP at 8VC: https://www.linkedin.com/in/jtlonsdale/. Was at addepar for a bit, was cofounder of palantir.
    • Midjourney, stable diffusion, dall-e. Feed the AI engine a few words/phrases (prompts) and it outputs an image. Crazy tech nowadays. https://twitter.com/fabianstelzer/status/1561019187451011074

  • Sunday

    Debt: Borrowing Against Assets

    Very basic review.

    ApproachDetailsNet after 1yr
    You earn $1m in a year in w2 salary.You pay standard income tax on it. Effective tax rate is about 50%.+$500k
    You earn $1m in a year as RSUs/grants.You pay tax on that as income (when it vests), so ~same as case 1.+$500k
    You earn $1m in a year as options.You pay to exercise the options, and you pay AMT. Totally depends on strike price, purse size, many factors – but assume the company is appreciating, and you’re willing to eat the basis for future gains. Assume a pretty similar net expense as cases 1 and 2.+$500k
    You take out a $1m 1yr loan against your assets (assumes, of course, you have ~3x collateral).Say 10% interest. You pay 0 tax on it. Then you pay the principal+interest back.-$100k

    But note too in the loan case: you take out the loan not to sit there, but to use. So you only have illiquid PE and have something expensive to handle, and your next tender offer is 2 years away. So you basically get to advance your paycheck of the stock sale, at a 10% hit. The sale of asset X is usually a gain, so you’re taxed on that exit, but let’s ignore that too (maybe it’s cash).

    You don’t “pay yourself with debt” – instead:

    1. Debt can be used as necessary when the rest of your portfolio is temporarily illiquid and you need liquidity.
    2. Debt can be used at will when your investment strategies can outperform interest rates.

    Obviously, credit cards are used for these exact two purposes. Short-term loans. #1 as (basically) a paycheck-forwarding system. And #2 because interest is 0 if you pay it off every month. So any strategy (rewards programs, cashback) outperforms interest (if you pay it off).

    Mortgages qualify for this as well. #1 because houses are usually SO expensive that you are not liquid enough in the first place. You’re forced to borrow. But even in the cases of wealth, #2 is applicable because the borrow rate is cheaper than the longterm investment market (most people can beat 3% over time).

    Leverage is probably the most common case, outside of standards like cards/houses. This is purely #2. You can beat the borrow rate, so you magnify your position to increase returns. Used to grow quickly (personal portfolio, business, whatever) by adding risk.

  • Thursday

    • Merge exposure just through ETH; checked LDO and AAVE, which trend the same (and proportionally-ish).
    • Changed a few credit due dates to 1st to keep everything in sync.
    • Kiwi and Virgin Atlantic never got back to me about the cancelled+unrefunded flight. $607 on June 7, BCN-JFK (remember the replacement was Iberia June 25 $821). Since the merchants never responded, I disputed through Chase. They gave a $607 credit back. If Kiwi doesn’t reply in the next few weeks (Sept sometime?), it finalizes.
    • Booked Florence hotel to start the oktoberfest eurotrip.
    • Addepar meeting.

  • Wednesday

    • Irish markets.
      • ISE = Irish Stock Exchange. Euronext Dublin and Euronext Growth. ASM = Atlantic Securities Market.
    • Cayman Islands.
      • Leading offshore jurisdiction to form mutual+private+hedge funds.
      • CSX = Cayman Islands Stock Exchange. 
      • Regulated by CIMA = Cayman Islands Monetary Authority.
      • No corporate tax on money earned outside of the cayman islands.
      • Lots of multinational corporations have their subsidiaries based there as a tax haven.
      • Sidenote – residents of the cayman islands have no income tax, no property tax, no cap gains, more.
      • Their govt gets most money from duty fees on imports. Offshore corps also pay an annual licensing fee.
    • Economic Interest vs Ownership Interest (Equity Interest).
      • A standard loan is perfected when the lender has a security interest on the pledged collateral (eg a certificated stock).
      • When the vehicle is an LLC, it’s more complicated. Might not be certificated, might have a conflicting operating agreement, etc. In these cases, a UCC-1 is most commonly filed to perfect the interest. 
      • The explicit difference: an ownership interest is when you have a lien on the equity itself. You may claim the shares. They’re yours to possess. An economic interest is a profit share: you get the dividends, revenue, interest, distributions, yield, whatever is produced from the equity but not ownership of the equity itself. It’s like being an investor in the LLC instead of being the owner.
      • An economic interest can be converted to an equity interest (think: the lender gets full ownership of the shares at IPO).
    • Investment Company Act of 1940.
      • Response to 1929 stock market crash. Updated by dodd-frank in 2010.
      • Primarily defines the SEC regulation of mutual funds.
      • Practically: Defines what sorts of disclosures and filings that investment companies must publish, protecting the public and ensuring proper enterprise.
      • Policies, penalties, rules around shorting, lots of contents. Short summary: you don’t want to qualify as a mutual fund.
    • Bridge loan, remember: existing investors extend a bit more runway before the next round.
    • Connected accounts for Mahlstedt LLC.
    • >10 calls for the startup, lots of productive work today.
    • Eth merge.
      • Sept 15. PoW -> PoS. Reduce power reqs by about 2 orders of magnitude.
      • Merging the existing chain with the beacon chain for golive. PoW nodes will still run, with increasing transaction times to organically sunset that network.
      • TPS from ~15 to thousands.
      • Eth value itself projected to increase on success, of course. Lots of ESG-focused minds will approve. Easiest way to gain exposure is just increase eth holdings.
      • Other ways to piggyback:
        • Since staking is now possible, liquid staking protocols will see a lot more activity. Lido, for example – LDO should rise.
        • Borrow rates will increase substantially. So depositors in lending pools will see increased interest yield. Supply these. Or just hold something like AAVE for general lending sentiment.
      • There are lots of trash articles out there. This one is pretty good: https://newsletter.banklesshq.com/p/ethereum-merge-investing-strategy-eth

  • Tuesday

    • Research in irish markets, cayman funds, economic interests (not ownership interests), mutual funds and the investment company act of 1940, more.
    • (obvious, but explicit) Hard assets are tangible assets with value. Property, cars, etc. Hard lending (or hard money lending) is typically short-term, secured by hard assets, and lending by private (not bank). Most commonly used by property flippers, pledging one property as collateral to buy another.
    • (again, obvious) Market makers profit from the spread. Your order book is not just lists of user bids and asks, matched 1:1; you as the market maker are half of every match. You set the bid and ask prices (algorithmically, market-influenced), then match yours with users’ complements. That’s how you profit from the spread.
      • There’s obviously risk there in the asset losing value. The market maker is holding the whole inventory, assuming the risk, justifying the fee for profit.
      • They may provide the original stock inventory, but obviously as more people join the platform (with more stock, cash, eg), the depth of the market/liquidity grows.
      • You may forward to other markets, PFOF, auction…many different structures. NYSE is a specialist, a type of market maker.
      • A broker is different. It’s upstream. It is authorized to buy/sell securities for a user, but is not primarily responsible for creating the depth/liquidity. That’s the market maker.
    • Stochastic modeling.
      • Just like the monte carlos of SpaceX for landing. Numerically simulate all permutations of all random inputs to determine the actual probability of outcomes.
      • Can be used to calibrate an investment size. Can be used to structure a loan. Maybe difference applications in finance.
    • Mahlstedt LLC.
      • The checking account (+debitcard) was approved. The credit line (~25k) was as well. Will arrive soon. Got into online banking. Many other business services I can add later.
      • Linked everything, added to trackers, planned out early cashflow+rewards, more.

  • Monday

    • Manhattan Aquariums service consultation.
    • LLC.
      • More iteration on BoA docs for Mahlstedt business accounts.
      • Shopped at Chase for business banking alternatives.
        • No generic rewards programs for banking balances, just cc.
        • Need 2k to waive $15/mo checking account fee.
        • Credit cards are basically: (full list https://creditcards.chase.com/business-credit-cards)
          • Business Unlimited, 1.5% cash back on everything, no fee, $750 back on $7.5k/3mo
          • Business Preferred, 3% points back on shipping/advertising/internet/travel, 1% points back on everything else, $95/yr, 100k points on $15k/3mo
            • I like this one a lot, since it keeps your rewards points in the same world as personal.
            • And remember you can redeem points back on travel for 1.25x (personal ultimate rewards is 1.5x) so you basically get 1.25% cash back on everything and 3.75% cash back on the special categories.
    • Trust.
      • Notarized the trust, was a process.
      • Looks like Chase and BoA have both suspended notary services (informally/temporarily?). Chase doesn’t do wills, but the trust is all I need urgently.
      • Convinced, called their notary hotline for some quick advice, then got the stamp.
      • 2 docs: the actual trust, and the certificate. The latter is a truncated documentation that provides the proof without exposing any private details of the trust.
    • Will/healthcare.
      • Will leave these unsigned/notarized/witnessed for now. Adding note for future.
      • Living will, HIPAA, PoA, etc.
    • Notary Public.
      • Less than $100 for application and exam fees. Takes a month or two to schedule, prep, test, commission.
      • Lasts 4 years in new york.
      • Prep material: Notary Law (https://dos.ny.gov/system/files/documents/2022/04/notary.pdf). There are other books too. Imagine could get prepared in 2 fulltime days?
      • Test is 1hr. Must get 28/40 multiple choice questions.
      • Will do this later, added note.
    • There are some pretty great iphone scanner apps.
    • Reinforcement learning and other methods for the netflix recommendation engine: https://netflixtechblog.medium.com/reinforcement-learning-for-budget-constrained-recommendations-6cbc5263a32a
    • Uber is ending its rewards program (!) and focusing on the Uber One membership. Discounts and fee reductions and stuff, but no more $5 every 5k pts.
    • Dissembled the s9 roomba and cleaned the edge brush, bin, filter, main brushes. Then replaced the edge brush and the base bag.
      • Remember I have extra replacement parts from when the first s9 was shipped with faulty firmware.
      • And remember the base turns red when the bag is missing or full.
    • a16z invested 350m into Adam Neumann’s residential real estate startup Flow.
      • Remember too that a16z invested 70m just a few months ago into Neumann’s blockchain carbon token startup Flowcarbon.
    • Lots of reachouts to various folks from various disciplines for the startup.

  • Friday