Some Links

Highly interesting post from Marc Rubinstein on Maker DAO, a fully decentralized Crypto bank

Good write-up on UK micro cap Quarto Plc

Yetanothervalueblog with some deep thoughts on the Music Industry

Deep Insights into the “Deca-Unicorn” Stripe

The always excellent Morgan Housel on the importance of “Managing Expectations”

Prof. Damodaran on SPACs

Good profile on John Rogers (Ariel) who is very bullish on Value Investing

 

 

13 comments

  • Maker DAO is exactly the same business model as 17th and 18th century Amsterdamsche Wisselbank, just online. Not sure how this is reinventing the financial system. Surely a way of making some money in the short run, but in the long run it is an illusion that the internet can work without any real world assets and for real world loans you will need some Government backing and then it is essentially a bank as any other.

    • As far as I understand it, the “bank” runs more or less on Autopilot as a series of smart contracts with minimal cost.

      Looking at cost/income ratios of the current banking sector, usually somewhere north of 70-80%, this looks different.

      • What makes a normal bank administration expensive are decisions about lending. That requires analysts with expertise and time. Maker DAO – as I understand it – has been lending to anyone who puts up enough crypto as collateral. This works until it doesn’t. Especially with the volatility of cryptocurrencies, there are big risks in the balance sheet.

        But maybe – for a modern banking business model – it is interesting to involve the account holders more in the granting of loans and to use the possibilities of the internet for that (e.g. via discussion bords and voting mechanisms). Especially if you look at the stock market boom, there seems to be interest in being more involved in these decisions and it could save costs if you could get rid of analysts.

        But for me, it only becomes interesting when you grant loans to real world entrepreneurs. That’s also the conclusion when you read David Graeber’s book.

        • What makes a bank expensive in my opinion are many layers of very expensive managment and very expenive bankers which want to earn big bonuses and big towers in down town locations. As far as I understand, this “bank” has no employees, no CEO, now towers and no bonuses.

          Yes, lending is limited to debtors with collateral but still I do think this is a first step into a very interesting direction.

        • Yes, I think I agree with you that banks could work much more cost-effectively and that it is interesting in principle.

        • If only banks. All multinationals. Specially financial industry

  • Prof. Damodaran rightly points out that SPACs greatly favor sponsors. That said, as he briefly mentions, pre-deal structures backed by solid sponsors and trading below 10 could be an interesting way to put cash at work with limited downside risk and potential upside.

  • Music Industry

    Any opinion on Vistas Media / Anghami – a kind of spotify for arabic music, that is in the process of beeing listed in the US ?

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