Let's Get Started...

An Introduction

Let’s Get Started…

First of all, thank you all for signing up and for taking the time to read this. I know that some of you may be thinking, “Since when did Frank become any sort of authority on finance or macroeconomics?” I’ll go ahead and just let the cat out of the bag on that one: I haven’t. I mean, I have done a bit more than just reading a few articles on investing and following a few randos on FinTwit (Financial Twitter). I actually went and took some finance courses in investment analysis and derivatives trading, and I did pretty well in them. I have noticed, though, that the type of analysis that I learned to conduct in those classes does not seem to be relevant in our current markets. The traditional stock market has completely divorced itself from the reality that our economy currently faces. The market resembles a casino more than ever; therefore, stock picking based on the fundamentals of a company (in overly simplified layperson’s terms, how profitable a company currently is) does not do much for you as an investor in the current environment. Beyond that, we have witnessed stocks for companies like Game Stop and AMC, companies that are either in decline or that are simply closed due to the pandemic, get pumped by retail (non-institutional) traders who used the internet as a decentralized hedge fund as an act of financial warfare against traditional hedge funds, while almost clogging up the plumbing of markets at large in the process. More on that in future editions of the newsletter, though.

Back to why I have chosen to write about money. When I graduated from graduate school in 2013, I had over $100,000.00 in debt, a story told by far too many people these days. Being in that type of debt was a paralyzing feeling, and I remained paralyzed by it for years after graduating. I couldn’t see myself working either a full-time public service or non-profit job for ten years (not because I am against public service or non-profit jobs, but more because I just really don’t like nine to fives) as a means to (hopefully) have the government forgive my loan debt. I also did not think or expect that the government would magically erase all student loan debt one day. (For everyone that was hoping that the government would do so now that Democrats are in control of the executive branch, the House, and the Senate, think again.) Philosophically, I did/do not even agree with the idea of all student loan debt being forgiven, as it does not solve the problem that these bloated, bureaucratic, and antiquated institutions continue to worsen as they continue to charge students exorbitant prices for an education that is worth less and less in the market each passing day. So, I took a different approach. I decided to work like a madman. At one point I had as many as seven jobs: four adjunct teaching positions at four different universities, one as a researcher for course content for a course on the United Nations’ online learning platform, one as a tutor, and the other as a waiter. You might think that working that much would take a chunk out of my debt. It didn’t. I was barely able to pay rent on a shitty studio apartment in Sunset Park, Brooklyn while making payments of over $400 per month just to service the interest on my student loans. To say that I felt hopeless was an understatement. I continued to search for a way out, though.

Fast forward to January of 2018. After spending a day helping a friend to paint his house in New Jersey, I decided to quickly stop off at a friend from graduate school’s birthday party at a bar in the city (New York) on the way home. I remember not being in the mood to go for a number of reasons, one being that I had chosen to stop drinking about one week earlier, but I went, nonetheless. That evening, my friend, the birthday boy, explained to me what cryptocurrencies were. This wasn’t any white-boarded, technical description of how cryptocurrencies were created or function. This was more of a, “Hey, so-let-me-tell-you-about-this-thing-that-can-make-you-richer-than-you-ever-dreamed-of-being” conversation. On paper, he had become relatively rich. (I preface that previous sentence with “On paper” because, he, like so many people that were a part of the cryptocurrency bull run of 2017, did not sell at the peak, and held his positions through the substantial bear market that followed.) However, what I took from that conversation was not a blueprint to get rich quickly (though, I would not have been opposed to that!), but more that there was a new infrastructure being built, and that the network’s expansion relied on people who were in the know spreading the information by word of mouth or via independent digital media sources like blogs or YouTube, as the mainstream media had hardly begun to cover this phenomenon. I had experienced something like this once before, and it made me realize how big of an opportunity was likely forming.

In high school, I was heavily into an independent, DIY music scene that, little did I know at the time, was on the verge of blowing up worldwide. We used to have to order CDs through mail order catalogues because stores like Tower Records didn’t carry many of these independent artists who were signed to smaller, independent record labels. People spread news of shows by printing flyers or simply by sharing information word of mouth. Shows were held at bars and VFW halls. The scene existed below the radar of mainstream culture. However, by the time I was in college, some of these bands that I had seen at VFW halls a year or two prior were now on mainstream radio stations and performing at huge, official venues in New York City and around the world. When I learned about what cryptocurrency was that night in January of 2018, I quickly saw the parallels between it and this below-the-radar scene that I was a part of in H.S., and I felt in my gut that what I had just learned about was about to become much, much bigger, the same way that certain bands did between the years of 1997 and 2002 (and beyond). To give one quick example, if you told someone in 1997 that a band like Jimmy Eat World would be played on pop radio stations five years later, they would have laughed at you. If you told me that I would receive a gold record for working with a band from my hometown on Long Island, Brand New, I would have laughed at you. And both they and I would have laughed at you the same way that most people would have laughed at you if you talked about cryptocurrency five or six years ago, yet, here with are with Bitcoin as the best performing asset of the 2010s and into this new decade – by eons.

So, after that night in January of 2018, I dug in. I went to my local bank branch and wired what I believe was less than $1000.00 to a cryptocurrency exchange to start investing. Even just three years ago, the exchanges were more unregulated, had much worse user interfaces, and were much more difficult to transfer funds to. I liked this, though. I saw it as a sign that I was early. I figured that average investors/most people wouldn’t have wanted to put up with the hassle of getting their money onto these exchanges, much less trust these non-insured exchanges to begin with. So, this obviously led to my becoming insta-rich, right? Wrong. I learned very quickly what it felt like to lose money in markets. At that time, the Stock to Flow (S2F) and Stock to Flow Cross Asset (S2FX) Bitcoin models (more on these on these very important models in the next newsletter) did not exist. Cryptocurrency investors had yet to learn that Bitcoin works in what could most easily be viewed as boom and bust cycles (kind of like the stock market used to before the Federal Reserve stepped in to make sure that stocks only go up). So, I watched the money that I had invested slowly dwindle. Then, I put in more money, and I watched that slowly dwindle. Little did I know, I was investing in a bear market. Instead of giving up, I doubled down. I began to read books like What I Learned Losing a Million Dollars, by Jim Paul and Brendan Moynihan, I Will Teach You to Be Rich, by Ramit Sethi (a very practical book with a very cheesy name), and The History of Money, by Jack Weatherford. I became more interested. So, I went to the administration at one of the schools at which I taught as an adjunct lecturer at the time, and I asked to be signed into certain finance courses. It was not easy to get into these courses because they had pre-requisites, so I had to sweet talk my way into them by convincing the professors for these classes that I had enough of an understanding of finance to keep up with the material. Luckily, I had done some work in Ghana for a well-known financier, and I think that dropping his name as one of my former employers is what helped to get me admitted into the classes. The irony here is that not only did I get into and do well in these classes, but I felt like I learned way less in them than I had/have by conducting my own research. And this only convinced me further that the old system was/is breaking and that a new, more democratic, less-centralized system (cryptocurrency/the blockchain) was forming.

I am going to stop the narrative here so that I can more directly state why I have chosen to write this newsletter. I write this newsletter as someone who has figured out a system of investment that works for me (a system that has earned me enough money to get me out of the burdening debt that I was once in), yet I do not plan to be prescriptive in these newsletters, and I do not plan to give any advice. I write it also as a college lecturer who teaches writing, someone who constantly tells his students to put their thoughts on paper as a means to refine them. I now feel ready to take my own advice. I write this as someone who previously thought money (and technology) was the root of all evil, but who has benefitted from learning more about and investing in both. And I write this as someone who was formerly undisciplined, unhealthy, and unsatisfied. I have made a number of changes including giving up alcohol, training consistently, adhering to a healthier diet, and becoming “financially literate”, and in making these changes within myself, I feel that I have had the most profound impact I have ever had on the people around me. So, this newsletter is simply my broadcasting some of the insights I have shared with those closest to me in a more leveraged way. The topic of the newsletter is currently “Finance and Macroeconomics”, but that is likely not the best description of what I plan to cover, as I plan to write about a broader set of topics, as well. Honestly, I chickened out when I had to fill in the “Topic” section, and I went with a more generic-sounding topic as opposed to something like “From Finance and Fitness to Markets and Mental Health”, but that sounded too much to me like some Tony Robbins shit. And, in the words of Tony Robbins, “I am not your guru.” Nor am I your financial advisor, so please don’t consider anything that I write financial advice. I am just someone who sees a gap between old systems and new ones, between old ways of thinking and new ones, and wants to share what I have come to notice.

If you made it to this part of the newsletter, thank you again for reading. I don’t expect each issue of the newsletter to be this long. I am also not sure how frequently I will write (I am shooting for at least one per week), but I am really excited to go through this exercise with all of you as my audience, and I hope it spurs some conversations when I finally get to see some of you in person again.

Best,

Frank

Twitter: @frankcorva

What I Am Listening To: “Faith Healer”, by Julien Baker

What I Am Watching: “HyperNormalisation”, by Adam Curtis