Feeling down

I finished reading The Ascent of Money yesterday, and immediately started on The Bitcoin Standard, by Saifedean Ammous. The book has been touted on perhaps the best book on bitcoin economics, but Ammous remains a bit of a firebrand to me. I follow him on Twitter, and he’s a bit of a Coronavirus skeptic. Not necessarily from the disease itself, but from the shutdowns and economic effects that they’ve had.

He’s very vocal, say the least, and a bit arrogant. He was actually just on Laura Shin’s Unchained, and she asked him about his response to something Yuval Noah Harari said in Sapiens about debt, and Ammous said something to the effect that “I have no interest in what a Marxist anthropologist has to say on economics,” before going off for several minutes on the subject. That’s not to say that the man isn’t brilliant or hasn’t written a great book, but he comes off as a bit insufferable. I should have known when I saw the introduction was written by Nassim Nicholas Taleb.

I spent way too much time today on Zero Hedge, questioning everything. Now I’m ready to short hotel chains with put options, hoard my cash and set tight stops on all my equities positions. Apparently Europe is about to institute martial law or something and go back into lockdown, and we’re about to have a huge market correction. I don’t know. I went down the rabbit hole a bit today and looked at a blog focused on economic collapse. I haven’t felt this paranoid since I was into 9/11 trutherism and peak oil. The proximity to the election is a bit a unnerving.

My Amazon position stopped out this week, closing a position I’ve held for over ten years. Now my portfolio is a quarter cash, another quarter $GBTC, and the rest is split between three dozen or so equities, with $NFLX and $ATVI being the largest of those.

I have added Compass Pathways ($CMPS) to my watch list. They have a synthetic version of psilocybin that they currently have in phase three trials for treatment resistant depression. It’s something I’ve been interested in for a while. MAPS co-founder Rick Doblin made the rounds on Tim Ferriss and Peter Attia‘s podcasts last year, and it amazing to think that they may actually get this approved in the United States.

Other than that, I haven’t been too active today, just taking it easy with the family.

Live free

silhouette of person standing on rock surrounded by body of water

Dreaming of a life of financial independence

Today I’ve occupied myself mainly by watching the price of Bitcoin on TradingView. I went to bed last night with the price having settled a bit above ten thousand, and woke this morning to find it up another three hundred dollars. It had been bouncing around a bit this morning before just blasting up and testing eleven thousand a few hours ago while I was out making a short trip out for work. Days like this I become obsessed with my IRA, checking in several times a day to see if I’ve breached another ATH in my retirement account.

We’ve got a dry erase magnet on our fridge, about the size of a sheet of paper. I’ve written “FIRE by 2024” on it, along with a list of debts: mortgage, student loans, and my car. At the bottom is the price that bitcoin needs to hit before we can wipe all of that out: $67K. Not that I have a solid plan to sell everything and just retire at that point, it’s more of a psychological reminder of freedom, where we’ll be secure, and be able to walk away from everything if we need to. Of course that doesn’t take into account for taxes and ongoing expenses, and selling all of our bitcoin would have the tremendous downside of well, not having any bitcoin, but it represents the promise of being secure in our future, not just for myself and my wife, but for my kids as well, who have their own accounts set aside on my cold wallet and with BlockFi.

I’m in a bit of competition with my wife, who took a very different track earlier than I did, going into grad school and getting her Masters’ and working hard to secure a government job with immense benefits such as healthcare and a pension. I spent much of my adult life under twenty five fucking around, honestly, getting by with life on easy mode, partying and boozing it up until our orbits came together. We’ve spent sixteen years together now, and I owe much to her for getting me out of my comfort zone these last few years. I credit becoming a dad as probably the biggest single factor in that equation.

We still have remarkably different approaches to life, I’ve always used the term complementary to describe how we mesh. She’s playing the safe, long game, intending to collect her government pension, socking away her contributions in whatever index fund offered to her, stacking a modest amount to the kids’ 529 college funds. Me, I’m buying bitcoin instead, running miners and picking stocks based on my knowledge of technology, trying to follow trends and carve out more aggressive gains from my more modest contributions. I’m hoping to win big, she tells me not to jump off of any buildings should the market crash.

Another example is a bet we have about autonomous vehicles. She told our daughter Elder that she’ll make sure that she gets a driver’s license when she turns sixteen, in about eight years. I bet her that Elder would never need one, since I expect autonomous taxis to be cheaper than private vehicle ownership. I hedged on whether manually driven cars would still be on the road, whether Elder could still get a license. I even did a book swap with her, giving her a copy of The Future Is Faster Than You Think to make my case, but she hated it so much that she didn’t even finish it.

And now our current COVID landscape has brought everything into question. Everything is up for re-examination, all of our assumptions up for debate. We’ve been reconsidering our jobs, our house, how we live, our relationships with friends and family, and what we want out of life. She’s always been focused on working for the future, and all of that has been called into question. Maybe part of it that the stability she’s cherished and sacrificed for has been called into question, while I’m finding myself in an environment where I’m thriving.

There’s a lot to suss out. Over the last day or so, my brain has started coalescing around an idea for my next longform newsletter. I had been focusing on the future of work, but I think this time I’ll branch out a bit more and look at the the future as it relates to these new possibilities. There are a lot of books that the two of us have been sharing recently and I want to explore some of the thoughts around stoicism, minimalism, and life design in a post. It’s going to be a challenge, and I want to put some notes together around them before I start writing.

I’ve never had a want for hobbies, and have basically lived my life as I could if I was retired. I won’t say that hermit is an apt term, but the lockdown hasn’t really affected my social life, if you know what I mean. I’ve been content, troubled only by the way I’ve allowed my temper to flare in response to the way the kids misbehave. For me, I’ve always found solace in reading books or blogs, or putting that knowledge to work in front of a keyboard. Missus has always relied on vacations or trip to the spas for rewards, and all that has been taken away by COVID, so it’s been more challenging for her. She’s been forced to adapt much more than I have, and is finding refuge in gardening, for one.

The kids are young enough that they’ve dealing fine. Younger will probably forget before the pandemic in a few years. All the local teachers unions have come out for virtual classes for the start of next year, which means we’ll probably just pull them completely and do homeschool. This furthers our desire to opt out. Choosing a school was one of the main reasons we bought this house that we did, and with the entire family effectively turning into digital nomads, we can effectively live and work anywhere with a fast internet connection. The fact that Americans are effectively restricted from entering most of the rest of the work is another problem entirely, but at least we have domestic options.

For now I will write, and teach the kids, work on our mini-homestead and learn how to function in a COVID world, all while waiting for $67,000 bitcoin, and dreaming about what we’ll do when we get there.

Six Figure FIRE Update: Day 6

Job search, investing performance, and BTC reFIREment plan

So here I am writing at night again today, as getting up early just hasn’t been my thing lately. The girls are enjoying the quarantine bubble that we’ve formed with the family down the street, and they spent most of the day outside playing today. It was the most productive day I’ve had in a long while.

I applied to two jobs the past two nights, one, a fast-growing firm that provides AI-enabled insights for customer data, Outlier.AI, and a startup trying to “cancel the endless cycles of extractive capitalism,” Good Money.

Outlier is a rather large firm that has an office nearby and meets my salary requirements; Good Money is an unknown, but it’s a startup and the culture looks so awesome. I’ll keep applying to my dream list over the next few days: Square, GitLab, Stripe, Twilio. I’m also continuing my consulting gigs, but I don’t know that I can grow that fast enough to reach my goal. We shall see.


Other good news today is that the retirement account hit a new all time high. I was finally able to figure out my actual account performance by looking at my cost basis gains.

SecurityOpen dateClose dateGain(%)
APPLE INC (AAPL)12/26/201310/5/2018170.64
AMBARELLA, INC. (AMBA)12/26/20139/19/201819.05
AMBARELLA, INC. (AMBA)9/3/20159/19/2018(55.98)
AMBARELLA, INC. (AMBA)11/4/20159/19/2018(40.97)
AMAZON COM INC (AMZN)12/26/20139/6/2018383.27
AMAZON COM INC (AMZN)2/20/20149/6/2018457.70
ACTIVISION BLIZZARD INC (ATVI)12/1/201410/10/2018248.63
BAUSCH HEALTH COMPANIES INC (BHC)12/26/20139/13/2018(80.58)
8POINT3 ENERGY PARTNERS LP (CAFD)8/5/20156/21/2018(20.48)
8POINT3 ENERGY PARTNERS LP (CAFD)8/3/20166/21/2018(25.19)
3D SYSTEMS CORP (DDD)2/20/20149/5/2018(75.12)
3D SYSTEMS CORP (DDD)2/18/20159/5/2018(38.07)
FORTINET INC (FTNT)5/4/20179/5/2018112.83
NVIDIA CORPORATION (NVDA)2/10/201610/8/2018917.65
OCEANEERING INTL INC (OII)12/26/20139/18/2018(68.84)
Total:93.58
2018 Realized Gain/Loss

Obviously Amazon and NVidia were the big dogs here. My portfolio was imbalanced with the sheer amount that I was holding there, and I had a bad feeling about the economy. I wanted cash in hand, so I sold about half my position via a trailing stop. It looks like genius in hindsight.

2019 wasn’t too great from a gains perspective. On paper it’s only about 4%, but realistically it should be more since I was covering positions, covering my initial capital investment while retaining the rest of the position, risk free. I was able to take profits on GBTC, Paypal, RestoreBio, and Yext, but lost most of it in Aurora Cannabis and Cronos Group when weed stocks collapsed. I also got stopped out trying to play a very volatile penny stock involved in Bitcoin mining operations.

2020 hasn’t seen any major sells, my trading is automated now via my value averaging protocols. Very low volume, so to speak, and a modest 4.7 percent realized gains. My unrealized gains, however, are sitting at a whopping 38.54 percent! Most of that is Amazon (2014), NVidia (2016-17), GBTC, (2019-20; about one-third of my total portfolio,) and Netflix (2013). Major losers include Sierra Wireless, Hive Blockchain Technologies, FireEye, Overstock, and 3D Systems Corp. I’m currently holding thirty-one positions in all, seven of which I’m currently value averaging into.

Before I go tooting my own horn too much, though, I’ve got to acknowledge a bit of cherry picking here in the results. Due to my original brokerage being acquired, I don’t have access to my full trade history prior to the last four years. I’m sure it’s ugly. It’s not really fair to cout gains on positions I’ve held since 2013 while tossing out the ones I lost on during that time frame. I also closed out my traditional brokerage account, about one-fifth of my IRA at the time, and put it into bitcoin in 2017, before it broke 10K.


I am obviously putting my money where my mouth is with Bitcoin. Between my hardwallet and GBTC holdings, I have well more than half of my liquid net worth in the big orange coin, and a smaller bit more in Ethereum and other tokens. I’ve done the calculations and am looking at a BTC price target of $67K, at which point I will have more than enough to pay off all mortgage and student loan debt and establish my financial independence. My target date is sometime before the next halving, which I based off of the stock to flow model, which predicts BTC ranging above $100K before then.

There are lot of details to be worked out before we get there though. Obviously taxes is going to be the big one. I assume we’ll be looking at long term capital gains in the case of Bitcoin. GBTC gains in my IRA are untaxed, but withdrawing anything will be subject to income tax plus 10% early withdrawal penalty. So the best strategy right now is to continue to accumulate and hodl. Since I think BTC is going to accumulate price much faster than my four percent loans, it makes more sense for me to continue to accumulate BTC while making the regular payments.

One change I will be making moving forward is that I am going to resume contributions to my IRA, which I suspended in favor of buying bitcoin directly the past few years. I am missing out on the tax savings from my contributions, which is going to be a big factor next April given my expected increase in income. Once we’ve topped that bucket off, I can make a final decision on where my additional savings will go.

Bitcoin vs. Coronavirus

It’s no secret that I am a huge bitcoin bull. For all my worries about risk and capital management with my financial investments, both equities and cryptocurrencies, I have thrown caution to the wind as far as bitcoin is concerned. I’d say that roughly two thirds of my total net worth is invested in either bitcoin or GBTC right now. Most of that is held directly in BTC in a hard wallet, and the rest via GBTC in my IRA.

About two months ago I started implementing a value averaging protocol to purchase GBTC. Each Monday, I would gauge the value of my GBTC holdings against a predetermined value, one-twentieth total capital times the number of weeks, and then place a buy or sell order, depending on whether I was above or below the target. The total capital that I planned for this deployment was about a third of my entire portfolio. I had set stops on several of my larger positions to gain cash, many of which triggered during the general market dip in 2019.

For the first fifteen weeks it was straight buy orders. I calculated the price that would trigger my max sell order, and on week eighteen, during the January run up, it triggered. Then the following week, I had a sell order. The last two weeks, as the price oscilated around the $10,000 mark, I was right on target, and didn’t have to place any large orders. During these few weeks, doubt began to creep and I found myself questioning the plan.

What if this was the start of the bull run to $50,000 or higher? Why would I sell? I questioned whether to break the plan and re-enter, or go even further and allocate even more than I had planned originally. I was able to squash this FOMO, and held firm. I had taken some profits, my position was up, and I would have at least another month to buy back in, as my profit taking had decreased my cost basis below my original target.

Weekly chart over the course of value averaging. Blue arrows indicate sell orders. Overall cost basis for period is 9.77/share.

And good thing I did. Effects of the Coronavirus caused a selloff in the markets, and bitcoin has fallen with it, about fifteen percent. I’m still holding to the plan, and will wait until Monday to buy back in. Patience, patience.

Also, I continue to accumulate BTC on a weekly basis, although on a much smaller scale. I’ve written a Python script to purchase a small amount through Gemini and transfer it to my hardware wallet. I’ve got one address for myself, and one for each of my children. The script alternates between them each week, placing buy orders and sending the proceeds to each of our addresses.

I plan on sharing this script via a Git gist or something shortly. It’s part of a larger trade planning library that I’m working on, and I’ve got to triple check that I’m not disclosing anything that shouldn’t be made public. I’ll do the same with the GBTC value averaging results, but that will be more difficult to scrub.

More economic and political news

The big news today seems to be a three percent pullback in the stock market due to Coronavirus fears, or the threat of a Sanders presidency, depending on who you ask. I wrote yesterday that Trump’s obsession with a health economy leading up to the election was leading forcing the Fed to inject liquidity into the markets, and that efforts were likely to fail at some point and lead us into a recession. What goes up, as they say… I also noted that the Coronavirus might be a big monkey wrench that throws us into global recession sooner than later. And while I haven’t bought face masks for my family yet, I am thinking about it.

$250,000 BTC?

This interview with Bitcoin bull Tim Draper was really interesting. The first two minutes are slow cause he just keeps repeating that the market’s are “frothy”, but then he gets into talking about bitcoin for several minutes. At one point he repeats his $250,000 price target for 2024, and is asked how much of his net worth is in crypto and he refuses to answer.

His point about the credit card fees versus Bitcoin is well-made also, as well as his arguments about banks in general. He throws out OpenNode as an example. Taking a quick look at it, they charge less than one percent per transaction, and even process the first $10,000 free of charge. They also have plugins for Shopify and WooCommerce. Neat!

Social Democracy vs. Unfettered Capitalism

I’ve been using Basecamp for several months lately, and have been using it with several clients lately. One of the founders, Jason Fried, has been on the Peter Attia pod a couple times since he started and I really appreciated the approach they take to running a business, work-life balance, and success. It really seemed like a breath of fresh air and a really healthy outlook.

A little over a year ago I participated in my first startup competition, and Angel investor Jason Calacanis was one of the keynotes. Afterward I got a bit caught up in the prospects and started listening to his The Week In Startups pod, but quickly burned out on it due to the number of episodes they put out and some general antipathy to the culture in general. So when I saw Fried’s co-founder, David Heinemeier Hasson, was a guest on TWIS, I added it to my feed and listened to it earlier today. I was not expecting what I heard.

Hasson is from Denmark, and the conversation quickly went to discussion about how America can “get to Denmark”, this is, providing citizens with basic services like healthcare and education for free. And Hasson is a pretty strong advocate for social democracy, and a fierce critic of exploitative capitalism, especially gig economy firms like Uber, of which Calacanis is an early-stage investor in. This was a really interesting conversation, and one that I will be sharing quite a bit with people in the run up to the Democratic primary here next week.

Selling in a bull market

We’re already a week into February; it seems like this year is flying along already. And what a crazy one it is. I’ve been spending a lot of time watching the price of Bitcoin; it seems like the bull market is here and ready to fulfil my dreams of wealth. Also, it seems like Sanders is in position to take the Democratic presidential nomination. On the other hand, Trump just got acquitted by the Senate, and the Democratic party seems to be doing everything they can to fuck things up.

I’ve been very low-key about crypto lately. I don’t talk to people much about in real life. I have fun with it on Twitter, but the fact is that if things go right, I don’t want people to know how much I’m involved with it. Keeping control of your bank is all fun and games until someone gets kidnapped. Someone on Twitter was bragging about being a member of the 10BTC club, and I warned them about OPSEC. They took the tweet down after.

I’ve done my best to protect my holdings. I’ve got redundant hardware wallets plus the private keys protected, but it’s starting to get to the point where I don’t feel entirely safe. I could literally make more from hodling this year than I do at my day job. That’s insane. Many months ago, during the depths of the bear market, I set some dynamic price targets to sell some of my holdings once things took back off using the Mayer Multiple (MM), or the price of BTC as a multiple of its 200-day exponential moving average. I’ve also posted the current MM chart and the TradingView PineScript I used to create it as well.

//@version=1
study("Mayer Multiple", overlay=false)

psma_length = input(100, title="Price SMA Length")
msma_length = input(250, title="Multiple SMA Length")


ma = sma(close, psma_length)
multiple = close / ma
mma = sma(multiple, msma_length)

plot(multiple, title='EMA Multiple', color=#891A0D, linewidth=3)
plot(mma, color=orange, linewidth=2)

Looking at the above chart, one can see that the price of bitcoin has usually peaked when the MM hits 1.9. The winter 2017 bull run peaked just under 2.9x. So a possible strategy would be to start selling as the MM approaches these numbers. I won’t be dumping my holdings at these points, rather I’ll probably start scaling out gradually. I’ve been using a dollar-cost averaging approach, or accumulating, every week, so I think I may start selling the same amount as the price reaches 1.55-1.60x, which is currently $12,900. However, I have made a decision to sell a significant portion of my holdings if we reach 2.88 like we did at the end of the last bull run. That would be just under $24,000. Of course those numbers are dynamic and will likely be much bigger if we take our time to get there. Otherwise, I assume we’ll have some sort of blow off top with opportunity to buy back in later.

I truly believe that Bitcoin represents the greatest financial opportunity that I’ve seen in my lifetime, and one of the main difficulties I’m struggling with is how to balance my risk. I’ve already got a majority of my net worth in crypto, and the temptation to go even further is strong. I’ve written about GBTC in the past; in the next week I’ll complete a 20-week value-averaging plan that I’ve been executing. It’s just hit it’s max payout target for the first time, and we are fully in the black. More about that next week.

That said, it’s hard finding a sell strategy. The important thing is to have a plan, and having the discipline to execute it. My hope is that I can use some of the longer-term trend indicators to build a cash reserve that I can redeploy during the next bear market. If we’re setting up for another multi-year parabolic bull run, then I want to make sure that I take profits and do so slowly enough that I don’t miss too much of the top.

Trade wars and crypto gainz

The last couple days have been pretty interesting in the cryptocurrency and equities markets. The Fed lowered interest rates for the first time since 2008, back before Bitcoin had been created, and CryptoTwitter has been abuzz about what it means. Most see it as a devaluing of the US dollar, and ultimately good for Bitcoin. The Trump tariff chaos is also being seen as ultimately good for Bitcoin, assuming that its ‘store of value’ thesis holds up and it’s used as a hedge against US markets tanking. That’s how I’ve been acting, anyways.

The US economy — at least as measured by GDP and the S&P, we’ll leave broader economic issues for another day — has been in a bull market for much longer than we traditionally see in the market, and prominent investors believe that we are overdue for a pullback. There are claims that the Administration fears a downturn before the next US election, and that the fight between Trump and the Federal Reserve over interest rates is because the President wants to give the economy a boost in the hopes that any impact won’t be felt until after his re-election. With last week’s rate cut, it looks like he won that fight, but we’ll see if things play out like he wants.

The lower interest rate will have a devaluationary effect on the dollar, and seems to have pissed off the Chinese, who have since decided to devalue the Yuan in response. This sent Bitcoin prices flying as the Asia markets opened, and it continued upward after the US markets opened and proceeded to tank about two percent. Whether the Bitcoin price increase is due to capital flight, Asians trying to hedge their capital, or just speculators anticipating such a move remains to be seen.