The metaverse, but less dystopian
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SIX things you need to know this week in 60 seconds.
1. Wheels up!
2. The metaverse, but less dystopian
3. Past performance is no guarantee of future returns
4. Twenty. Two. TRILLION. Dollars.
5. “We’ll take it from here” - crypto industry to SEC
6. The Dollar Tree is now the $1.25 Tree
*as of 4pm ET, 11/24/21
Last Friday, 2.24M air passengers went through U.S. Transportation Security Administration (TSA) checkpoints. That’s the most since the pandemic caused the world to come to a screeching halt in March 2020.
The TSA is expecting to screen around 20M passengers over the Thanksgiving travel period (Nov 19-28) which will bring numbers back up close to pre-pandemic levels.
Last week, the U.S. lifted travel restrictions for fully vaccinated travelers from 33 countries, so the airlines expect the uptick to continue.
GRIT’S TAKE: More evidence that we are moving back to pre-pandemic trends.
GRIT’S ACTION: $JETS isn’t back to pre-pandemic yet. Still has +30% to go. Holding my $AAL.
Under the Radar
A 20+ Year History of Drone Innovation: Draganfly continues to revolutionize the drone industry. The award-winning, industry-leading drone solutions and systems developer, has signed a minimum $9 million manufacturing agreement with Digital Dream Labs, Inc. to design and develop an AI companion robot capable of flying*.
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2. DEALS & IPOs
The metaverse, but less dystopian
The “metaverse” is the hottest thing in Silicon Valley and Wall Street right now. The topic probably even made an appearance at your Thanksgiving dinner yesterday.
One company that likely didn’t get mentioned is Niantic, which has created the world’s first and only planet-scale AR platform. You might know them for developing Pokemon GO — the AR game that took the world by storm and forced millions of gamers *gasp* outside.
The Google spinoff is back in the headlines this week after raising $300M at a $9B valuation to build what they call the “Real-World Metaverse”. Unlike
This means a platform for artificial reality based on a 3D map of the world where the physical is overlaid with digital creations, entertainment, and information.
GRIT’S TAKE: Not unlike what they did with Pokemon GO, Niantic plans to create tech that will enhance the physical world as we know it rather than replace it with a virtual one.
GRIT’S ACTION: Long crypto, metaverse & everything Web3.0.
3. STOCK MARKET
Past performance is no guarantee of future returns
If you were long anything that resembled growth, tech, IPOs, or SPACs in 2020 then you had yourself one heck of a year! Your good times even continued into 2021. That is until the inflation boogie monster burst onto the scene like the Kool-Aid Man to ruin the party.
Since then (February-ish), the prospects of higher interest rates have been a headwind for growth stocks and the same portfolio that made you look like a genius in 2020 would most likely be underperforming the market this year.
Ex: ARKK, the innovation fund that made Cathie Wood a household name last year, is currently down nearly 30% from its February high.
GRIT’S TAKE: “When my information changes, I alter my conclusions. What do you do, sir?” - John Maynard Keynes
GRIT’S ACTION: I only own 2 of the 33. Getting hurt on $DKNG and $CRSP but my thesis on both are still intact.
Twenty. Two. TRILLION. Dollars.
That’s what energy consulting firm Wood Mackenzie expects the market for carbon credits will be worth by 2050. Today, the market is worth $268B which makes carbon a literal 100x opportunity!
As we discussed in Sunday’s newsletter, one of the key takeaways from COP26 was an agreement on how to regulate the carbon market.
There’s been talk of what is being done to help us reach net-zero for years, but finally getting uniform rules on this market will provide clear incentives for individuals to take action, and ultimately allow the voluntary market to boom.
GRIT’S TAKE: After talking in circles on climate change forever, pricing carbon has emerged as the clear route to net-zero.
GRIT’S ACTION: Carbon DAO’s, a bunch of private carbon deals in my inbox and I am long two deals already… it’s early innings but the theme is definitely taking off!
“We’ll take it from here” - crypto industry to SEC
Last month, Andreesen Horowitz published a 35-page paper titled “How to Win the Future: An Agenda for the Third Generation of the Internet”. In it, a16Z laid out some policy proposals for crypto that can be summed up with one line:
“It is time to look beyond the SEC as a catchall regulator.”
Elsewhere in the crypto sphere, Coinbase has taken things a step further by pushing for an entirely new regulator of digital assets (one not run by their nemesis, Gary Gensler).
Meanwhile, on a completely different planet altogether, Gensler and the SEC are standing their ground on behalf of investor protection.
GRIT’S TAKE: Stopping crypto is like trying to catch water with your hands. The innovation genie is out of the bottle. Now it’s a matter of figuring out what should be regulated and what shouldn’t be. The intention should be two-fold 1) do no harm and 2) maximize wealth creation for ALL investor types.
GRIT’S ACTION: Buying the dip on Bitcoin & Ethereum.
The Dollar Tree is now the $1.25 Tree
Dollar Tree has been selling everything in its stores for $1 for 35 years. That streak came to an end on Tuesday when the bargain-hunters paradise announced they were increasing prices to $1.25 (or 25% for those keeping score at home).
The pricing move has been in the works since the summer, and it’s meant to give the company more flexibility. You see, the problem with capping products at $1 in the current environment means that eventually, popular items will have to be discontinued as inflationary pressures continue driving up the costs of manufacturing and transportation.
The news was less than ideal for Dollar Tree customers but music to the ears of investors, whose shares have jumped ~10% since the announcement.
GRIT’S TAKE: Just in case you were wondering — using the Dollar Store as a proxy for inflation is not financial advice!
GRIT’S ACTION: Stocks.
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