I just voted "Yes" on "Ammendment to SIP#20 - Continued Balance and Rebalancing" snapshot.org/#/stgdao.eth/proposal/0x5280241b4ccc9b7c5088e657a714d28fa89bd5305a1ff0abf0736438c446ae98 #Snapshot
Stan Druckenmiller’s Worst Mistake Ever
One of the best ways to learn about investing is through second-hand experience by learning what not to do from the mistakes of others. It’s the most cost-effective, resource-abundant way to learn since history is filled with other people’s mistakes. The other option is first-hand. It’s expensive but stickier — less easily forgotten.
There’s one downside though. Knowing won’t make you immune from repeating it. All the information in the world is useless when emotions drive decisions.
Take Stan Druckenmiller.
He’s arguably one of the best investors ever. He averaged 30% per year over a 30-year career, with no losing year. And he once turned a null million donation to a school, invested over five years, into a $35.6 million windfall.
A return like that is not easy. It requires taking extremely concentrated bets with a lot of leverage and most importantly an openmindedness to change your mind when you’re wrong.
I’ve thought a lot of things when I’m managing money with great, great conviction, and a lot of times I’m wrong. And when you’re betting the ranch and the circumstances change, you have to change, and that’s how I’m always managed money.
And yet, emotions drove him to do something he knew was a mistake but did it anyway. Druckenmiller retold the story of his worst mistake ever at the peak of the Dotcom boom in 2000:
I made a lot of mistakes, but I made one real doozy. So, this is kind of a funny story, at least it is 15 years later because the pain has subsided a little. But in 1999 after Yahoo and America Online had already gone up like tenfold, I got the bright idea at Soros to short internet stocks. And I put 200 million in them in about February and by mid-March the 200 million short I had, lost $600 million on, gotten completely beat up and was down like 15 percent on the year. And I was very proud of the fact that I never had a down year, and I thought well, I’m finished.So, the next thing that happens is I can’t remember whether I went to Silicon Valley or I talked to some 22-year-old with Asperger’s. But whoever it was, they convinced me about this new tech boom that was going to take place. So I went and hired a couple of gunslingers because we only knew about IBM and Hewlett-Packard. I needed Veritas and Verisign. I wanted the six. So, we hired this guy and we end up on the year — we had been down 15 and we ended up like 35 percent on the year. And the Nasdaq’s gone up 400 percent.So, I’ll never forget it. January of 2000 I go into Soros’s office and I say I’m selling all the tech stocks, selling everything. This is crazy…at 104 times earnings. This is nuts. Just kind of as I explained earlier, we’re going to step aside, wait for the next fat pitch. I didn’t fire the two gunslingers. They didn’t have enough money to really hurt the fund, but they started making 3 percent a day and I’m out. It is driving me nuts. I mean their little account is like up 50 percent on the year. I think Quantum was up seven. It’s just sitting there.So like around March I could feel it coming. I just — I had to play. I couldn’t help myself. And three times the same week I pick up a — don’t do it. Don’t do it. Anyway, I pick up the phone finally. I think I missed the top by an hour. I bought $6 billion worth of tech stocks, and in six weeks I had left Soros and I had lost $3 billion in that one play. You asked me what I learned. I didn’t learn anything. I already knew that I wasn’t supposed to do that. I was just an emotional basket case and couldn’t help myself. So, maybe I learned not to do it again, but I already knew that.
Fear of missing out, greed, envy, or as Druckenmiller said, the need “to play,” are just a few magnets for mistakes. Emotions can cause even the best investor to do foolish things…when they know its foolish.
Source:
Druckenmiller’s Lost Tree Club Speech
How did Pudgy Penguins go from a rug pull to selling $500k worth of toys?
Few NFT projects have had as many trials and tribulations as Pudgy Penguins, from sell-out mints to rug pulls to launching a best-selling toy on Amazon.
Here's the story 🧵
Pudgy Penguins launched in July 2021, in the middle of the NFT bull run, selling out in less than 20 mins.
So the NFT collection of 8,888 NFTs was off to a solid start.
The floor price quickly reached an all-time high of 2.49 ETH (worth around $7k at the time.)
However, a few months later, problems started to arise.
A Discord moderator claimed that he was underpaid and was bribed by the founding team to keep his mouth shut.
Then it was discovered that the project’s founders had emptied the Pudgy Penguins treasuring, resulting in the floor price dropping to 0.4 ETH.
Needless to say, the Penguins were in shambles.
Many thought that the project would never recover from this.
How Pudgy Penguins Have Turned the Tables
In the midst of all the scandals, Pudgy’s community stayed strong, searching for new leadership.
One of the NFT holders, Luca Netz, came to the rescue, buying the entire project and IP for 750 NFTs (over $2.5 million at the time.)
So who is this Luca Netz, and what did he do to turn the Penguins into a blue-chip NFT project?
Luca Schnetzler, known as Luca Netz in the NFT world, is a 24-year-old serial entrepreneur, and his background is beyond impressive.
He’s not of those “serial entrepreneur” gurus you see on the Internet.
While he comes from humble beginnings (growing up homeless, living in 30 guest bedrooms in 9 years), his “entrepreneurial resume” is stellar, including:
• Working at the start-up Ring Doorbell which sold for null billion to Amazon.
• Being the CEO of companies like La Gold Cartel (his jewelry store), Manners Holdings, and LPT Technologies.
• Launching a VC firm, Netz Capital investing in e-commerce companies.
Using his experience in e-commerce, Luca assembled a rock-solid advisory board featuring:
• Alex Svanevik - CEO of Nansen
• Sanjay Raghavan - Head of Web3 at Roofstock
• RJ Cilley - COO of SAKS Fifth Ave
• Jordan Sterlin - Partnerships at META
• Chet Kuchinad - CPO at Save The Children, Previously at Nike & Starbucks
• Bee Ngyuyen - General Partner Limited Ventures
• Jess Richardson - Head of Licensing at Hasbro
• Paolo Moreno - Adviser at SFX Ent & Fashion Nova
• Pentoshi - King of the Penguins
Pudgy Penguins also raised $9 million in seed funding from investors like:
• BigBrainVC
• Research Kronos
• CRIT Ventures
With that much experience and dry pounder, Luca started expanding the project’s IP.
The NFT project signed a deal with the Hollywood talent agency, WME, to help them expand the brand in TV shows, movies, and gaming.
The Penguins also doubled down on their social media strategy, reaching over 3 billion views on its official GIFs and 500k followers on Instagram.
Taking advantage of the social media views, and family-friendly IP, Pudgy launched their own toys - Pudgy Toys.
It’s the world’s first mass-market NFT product that’s licensed directly from its community.
The toys are not a cheap cash grab, though.
They’ve their own utility.
Buyers of the toy will get their own certificate that gives them a trait box featuring 4-6 traits.
Owners can trade or equip these traits to their own Forever Pudgy Penguin NFT.
Once the Forever Penguin is equipped with these traits, users can mint it on the blockchain as a dynamic NFT, which can be further customized.
The toy launch was a wild success, selling over 20,000 toys (worth over $500,000) on Amazon in the first two days.
So what are the lessons we can learn from Pudgy Penguins?
- Play to your strengths
The NFT collection of cute Penguins has a natural kid and family-friendly appeal.
So the team used doubled down on it.
The project is sharing a ton of cute memes, wallpapers, stickers, and GIFs on social media, which helped them grow theirs following without spending any money on ads.
,
- Go beyond web3
Instead of launching its 19th airdrop, the project decided to explore an entirely new market - toys.
Using Luca’s e-commerce experience, and Pudgy Penguins’ social media brand, the project’s dive into physical goods has been a wild success.
- Think outside of the box
One quote by Luca Netz stands out:
“I look at the Pudgy Penguin like an influencer.”
If you look at the project’s social media channels, this rings true.
Pudgy Penguins has a strong presence on all social media platforms, especially on the visual ones (IG and Tik Tok), and frequently collaborates with other NFT projects like DeGods.
I also write a newsletter covering the intersection between crypto, gaming, NFTs, and the Metaverse, where I cover topics like this one.
Sign up here for free:
