RR Journal No. 2

Top of the list,

Head of the heap,

King of the hill.

While this stanza could easily describe the readers of this humble Journal, I'm, of course, quoting the legendary Frank Sinatra from his smash hit (Theme from) New York, NY.

New York to me is never quite current. It's always set a bit back in history, to something boxier, in the wrong color, with more swag, like a DeLorean.

When I was a kid, my parents split-up and I ended up in a small apartment with my dad and brother on the weekends. I’d kick a dodgeball against the neighbor's wall for entertainment (much to their content, I'm sure) and watched early Tarantino on a tube-style television set back into the wall.

I remember the sickly-sweet smells from the subway grates, the way a hot dog vendor slammed the door shut on his cart after handing-over a bun, and the pinstripe suits. You could go anywhere you wanted on one street - China, Italy, Russia - just by stepping into a restaurant.

Sitting inside a luxury hotel room as I type this, I can still smell the same stale cardboard scent all old buildings in New York smell like. Perhaps it's only in my imagination.

To me, in retrospect, the 90's looked like the 80's. And then it felt like the 90's when I lived there in the aughts. Just look through the photos - you’d believe me.

In New York, you're moving so fast, not even history can keep up. Your lapels are never the right width.

After graduating college, I started my career in London as a fixed income trader as part of a training program for the British investment bank I worked for. I was miserable. I couldn't wait to get back to the mania, the rhythm, and the potential of New York. Having joined in the beginnings of the Financial Crisis, it took me about eight months to get back to town.

The taxis honk familiarly outside my window.

In the words of Sinatra, "if I can make it here, I can make it anywhere."

I haven't given up yet and I never will.

This week, I'm taking meetings in Miami, FL.


 

Global Markets


I find myself more and more unsettled by the regulatory environment around crypto. Not for some cyberpunk, digital freedom-fighter ethos, but because I’m seeing a ton of arbitrary decisions being made.

Listen, no one likes cheaters. And in a new market like crypto, there will be scammers of every flavor.

So, when it comes to oscillating computerized coins that have no intrinsic value (or are even considered securities), what's classified as insider trading?

First, I’d like to lean on my technical background in trading with a few overly simplified examples for one moment to shamelessly build credibility with you, the reader.

In “stocks” meaning shares of equity in public companies that are gigantic amorphous entities that generate a ton of internal information that is to be released to the public at the same time. For the fair repricing of their shares.

It’s actually pretty simple. Johnny at the company who has privileged information shouldn't be telling you that revenue shrank last quarter before anyone else hears about it, so you can load up on puts and get rich at someone else's expense.

In fixed income, however, a bond is an instrument without feelings, a salary, or a car payment. Effectively, there is no inside trading in fixed income. Information, however you get it, can be used to your advantage. The holder of more information, faster, gets richer, period.

I made a lot of money this way, having dug underneath exchanges and dropped fiber optic cables to beat my rivals (aka Goldman, Bank of America, whoever) to the punch. It's called colocation or CoLo, by the way.

Ah, the good old days.

May I mention, in foreign exchange, there’s no insider trading, either. If you hear that the Bank of Crownlandia is raising rates before anyone else, go ahead and make your move.

In crypto, we’re in a grey area due to the myriad of ways the products can be structured. Most of the time, there are no fundamentals to crypto.

So, to me, crypto looks a lot more like a software than a security.

Regulars and governments are hungry to control this new technology. And we’re seeing land grabs for "legal real estate" in the most shameless ways.

The biggest risk in crypto isn’t the guy that knows it’s going to get listed on a major exchange before you do, it’s the legal risk to the coin becoming arbitrarily regulated and suffering in price after you own it.

Currently, the confusion in crypto is very, very real.

Holdings: Cash ($USD), S&P500 (small), REITs

Bullish: Residential real estate, collectibles, vintage American sports cars, Rolex Daytonas (purchased at MSRP), and crude oil

Neutral: US Equities

Bearish: UST Bonds, Euro Equities

 

Assets & Liabilities


Having found myself in an influential place around the concept of wealth, I'd like to chime in with a totally new way of looking at luxury goods and experiences.

Caution: This may change how you look at material possessions forever.

Simply - I look at all purchases as tools and judge their utility. I could care less what brand the cool kids are wearing.

In other words, will that thing save me time or make me money?

To throw a wrench in the gears, oddly, assets for me may be liabilities for you.

Allow me to explain.

Sure, I like nice things - but I don't love nice things.

Perhaps that's the Roman-era Stoic in me poking its head to the surface - however - it's important to note that I like a clean car that can get me from A to B at a certain level of comfort. I don't need to drive a Ferrari.

But I do.

And it's not for the performance - I'm in stop-and-go traffic 99% of the time.

Most of the time, I’m not even driving at all.

Why in the hell would you spend money on a behemoth money pit like that?

I'm not flexing. It's sound business.

Simply because digital impressions and unique views on the internet have a very real dollar amount attached to them.

It's actually cheaper for me to drive a Ferrari than run ads. Let me show you the math.

A financing payment on a $350,000 Ferrari will run approximately $6,000 per month with the minimum down payment.

Now imagine running Facebook ads to push your content to the world. This $6,000 would earn me approximately 600K impressions per month on my content.

In short form content, 600K impressions is nothing.

Videos featuring my Ferrari often double or triple my other content in impressions - earning me an extra 1M impressions per week.

People are interested in rare, expensive, good-looking things and tend to watch the video longer.

Those 1M impressions are worth anywhere from $10,000 to $50,000 depending on what CPM you're using.

So, for me, the Ferrari is free. In fact, it's as if Ferrari is paying me to drive one.

Unfortunately, it's probably not free for you, unless you flip your thinking and use it as a tool if your business fits this model.

So, the next time you’re feeling FOMO from seeing your latest blogger balling out, take a deep breath.

Traveler influencers HAVE TO TRAVEL to make money. Watch influencers HAVE TO WEAR fancy watches to sell watches.

Now, here’s the tough love for the big spenders out there.

Your luxury trips to Mykonos complete with bottle service (if you're not in the business of clicks, as I am, of course) will simply leave you broke over time. Even if you can afford it.

Of course, it's your money. Do whatever the hell you want with it.

But, if the purchase isn't a tool to you and it's just a fancy thing that you believe will make the Joneses envious - perhaps you should redirect your resources elsewhere towards true assets and growth.

So, if you want to use various material goods as tools, rather than depreciating status symbols, do so wisely and consciously.

Suggestion: Determine if what you're about to buy will put money into your pocket or take it away over time.


 

Reading & Listening


I’ve retraced my footsteps to the voice that got me into content creation in the first place. Naval Ravikant explained to me (via a podcast) that there was a new form of leverage in town - media.

Previously, media was permission-based (you needed to "get on the news") as well as full of friction (aka. newspapers cost money to print).

Now, media is permissionless and frictionless. When a video goes viral it's replicated costlessly and mostly anyone can "play the game" with a smartphone.

Believe it or not, the idea to make TikToks popped into my head when I heard this explanation from Naval and of course it has changed my life materially.

Thanks Naval.

Podcast: Naval


 

Mindset & Humility


The occasional trolling comments on my posts that get to me the most aren't, "Did you know you look like Robert Downey Jr.?" for the thousandth time.

In fact, I get most bent out of shape about "Yea right, this stuff doesn't work, I've never gotten a free [coffee, soda, cookie, compliment] in my life for being nice. I've never gotten anything."

Nice?

This was never about nice. It was about leveling with people.

Now, I'm sure everyone here is a blind believer in my message of kindness & humility - but - if you wanted to play a game with me to test my theory. This is how it works.

The Free Coffee Game

  1. Pick one coffee shop

  2. Go to it every weekday and make conversation

  3. Tip (if you're in the U.S.)

  4. Remember details about the baristas

  5. Compliment them when they do/wear cool stuff

  6. Receive a free coffee (or a girlfriend/boyfriend, individual results may vary)

In fact, I'm considering making this section a place for my blatant "dares" to you to try these tactics on for size and see what happens.

Oh, and even if you don't get a free anything, you'll feel pretty good.

And you feeling good might lead to much greater things than a free cup of joe.

* For the data heads, I pay for roughly 50% of my coffees.

About this newsletter.

This weekly email is written by me, Nicholas Crown. Meaning: this email is not professionally editied (yet), so please reach out with any suggestions or errors by replying. If you want to meet me 1:1 you can always book a time here.

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