Read time 5 minutes

Welcome back to another week with Renaissance, and since we’re in Dubai this week at the conferences, the newsletter equivalent of a Russian crypto millionaire, crazy, but you just keep coming back wondering where the money is coming from. 👀🤑

Today at a Glance:

How To Create Wealth By Paul Graham

$650B Crypto Burned & What To Buy 

Why You Should Want The Market To Go Down

But before we get stuck, this week we’re brought to you by Masterworks.

A million dollar Banksy got investors 32% returns?

Mm-hmm, sure. So, what’s the catch?

We know it may sound too good to be true. But it’s not only possible, it’s happening—and thousands of investors are smiling all the way to the bank, thanks to the fine-art investing platform Masterworks.

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But art? Really? Okay, skeptics, here are the numbers. Contemporary art prices:

● Outpaced the S&P 500 by 131% over the last 26 years

● Have the lowest correlation to equities of any asset class

● Remained stable through the dot-com bubble and ’08 crisis

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The Renaissance Over-Under

Business, Money Markets & Financial News

How To Create Wealth By Paul Graham, The Tech Billionaire Master Investor Of YC!

If you don’t listen to our calls and tips to get wealthy then maybe you’ll listen to the billionaire, we’re bring out the big guns and rifling through his essays on wealth👀

If by some miracle you don’t know Paul Graham, here’s his dating profile: genius programmer, painter, and investor. Started YC back in ‘05, the world’s biggest and best start-up incubator, like Brad Pitt from Moneyball - just going around picking people with great ideas! They invested in Airbnb, Stripe, Coinbase, and 4000+ more, everything you’ve basically ever heard of!

Me in my YC interview…..still think ‘Uber for mail order brides’ was a good idea 🙄 They didn’t even like my second idea for Airbnb for wife swaps!

And here’s the wealth wisdom from his essay archive……….

How do billionaires make their dough? 75% make it from start-ups, 25% from investments. Start-ups = fast track to riches! You can always make your investments along the way. 🚀🎉 You’ll need your own business or start-up if you want to be wealthy, FACTS.

Start-ups are not magic. They don't change the laws of wealth creation. They just represent a point at the far end of the curve. There is a conservation law at work here:

- If you want to make a million dollars, you have to endure a million dollars' worth of pain.

- For example, one way to make a million dollars would be to work for the Post Office your whole life, and save every penny of your salary.

- Imagine the stress of working for the Post Office for fifty years. In a start-up you compress all this stress into three or four years. ♨

There are a lot of ways to get rich, his essay is about how to make money by creating wealth and getting paid for it.

- There are plenty of other ways to get money, not that Renaissance are endorsing any of these but hey, you gotta feed the geese right…👀 They include chance, speculation, marriage, inheritance, theft, extortion, fraud, monopoly, graft, lobbying, counterfeiting, and prospecting.

- Most of the greatest fortunes have probably involved several of these.

- The advantage of creating wealth, as a way to get rich, is not just that it's more legitimate, but that it's more straightforward! You just have to make something people want. (sounds more simple than it is but it’s true!🙄)

Forget the "fixed pie" myth 🥧 Paul drops some wisdom: Wealth isn't fixed - you can just create more of it from thin air! We’re used to poor families, and fixed salaries and everything is fixed and accounted for, but value and wealth are infinite and unpredictable! So open your mind to expanding your idea of wealth, fixed pie thinking is for poor people (that’s a mindset not a number!).

The secret sauce? Intensity! 🌶️ We love this here at Renaissance, we always say - intensity is the strategy! Paul says start-ups compress a lifetime of work into a few years. You gotta work like there’s no tomorrow, with the intensity like back when you were a kid running and weirdly thinking if you don’t reach that post before a passing car your whole family will die! 🔥💼

Measurement and leverage are the keys 📏🔑. You need an environment where your performance matters and your decisions count big time. 🚀

- Start-ups win in wealth creation because they can move fast, but also because they’re small!

- Smaller teams have defined roles, clear work, accountability. The task is yours, you can’t coast like you can in the corporate world! The bigger the company gets, the more people it gets, the more the value of the workers and their effort averages out. And eventually you end up in the normal people’s world where they don’t care about outcomes, just pay checks.

Big company workers, beware! Without danger, there's no leverage. No risk, no reward. 😬💼

The accountability game: You got to risk failure and humiliation under your own name. Be willing to fail in public. Sure, your grandma will never look at you the same again, but fuck it she’s gonna die soon anyway!👀

The catch:⚡ A start-up is like a mosquito. A bear can absorb a hit and a crab is armoured against one, but a mosquito is designed for one thing: to score. No energy is wasted on defence. The defence of mosquitos, as a species, is that there are a lot of them, but this is little consolation to the individual mosquito.

Basically, it’s all or nothing guys and you’ve got to make it work and score on time!

We could go on and on, but if you want more, read it from the big man himself. 🤟

http://paulgraham.com/wealth.html

http://www.paulgraham.com/richnow.html

LITTLE BITS 😎

Lately at Renaissance we’re going full Limitless style on mental focus. The studies and research we’ve done has gotten us to use these two below when we’re working! For those interesting in biohacking, it’s a cheap experiment for an edge. 🤙 

https://uk.iherb.com/pr/jarrow-formulas-alpha-gpc-300-mg-60-veggie-capsules/176#overview

https://www.thorne.com/products/dp/l-tyrosine?utm_source=grow-faster.beehiiv.com&utm_medium=newsletter&utm_campaign=i-took-the-pill-from-limitless-sort-of

Exactly what we’ve all spotted - the majority of brand capital right now is all nostalgia plays and spin-offs: Disney, Marvel, Harry Potter and blah blah blah…

https://www.businessinsider.com/tv-movie-reboots-sequels-spinoffs-you-are-what-you-watch-2023-10

Bitcoin booms! Bears get rekt - we up boissss!

https://markets.businessinsider.com/news/currencies/bitcoin-price-rally-etf-crypto-bears-loss-spot-token-markets-2023-10

NOSTALGIA OF THE DAY

Crypto Market & NFT News

$650B In Crypto Burned Forever - One Man’s Burn Is Another Man’s ‘Buy’😉

*$650Billion dollars

Alright, I’m gonna make you wish you were buying pointless shit for years now. 👀 Welcome back to buying valueless shit to get wealthy 101.

Fade in……..it’s 2019 and Hayden Adams, the founder of Uniswap, first launched a token just to test the migration from Uniswap v1 to v2. He called it HayCoin…the first coin launched on Uniswap!

Good ol’ HayCoin never had any value, never had any utility, never had any real circulation…..until this month.

Most of the supply was burned shortly after, but some… some survived.👀 A group of focused crypto traders were able to get their grubby little hands on 4.4 coins!

When the limited supply hit the open market the price shot up to the hundreds of thousands, and well, Hayden’s supply (99.9%) went from worthless to $650B…. Yes BILLION.

SELL SELLL SELLLL IT! *foams at mouth 

Sorry, my nature got the better of me for a minute, but Hayden didn’t sell. He sent it all to a burn wallet. Sick of traders speculating on his worthless coins. Some men just want to watch the world burn. 🔥

Now we at Renaissance don’t do public math, but that only left 4.4 tokens in existence! And the nostalgia added value and interest to the coin even if Hayden wanted the opposite. He squeezed it. And the traders got the juice. 😎

Each token was trading for an insaneeeee $3Million each FROM NOTHING.

Why? Nostalgia and culture: The wildest ascents of crypto assets haven’t been infrastructure projects, but instead memecoins, frogs, and apes etc.

And that’s simply because they tap into the culture of Web3, which despite all objections, is full of degenerates and meme keyboard basement dwellers. And they love anything that trolls, adds or maps cultural internet-born references onto assets.

It’s often the assets that hold no value that can inherently unlock massive amounts of it, *supply limiting - after all what gives money its value except a shared social protocol that that’s what we’ve decided to use?

The insight⚡: This is really common in market cycles where things have taken a downturn, capital volume is low, and innovation and focus has slowed or shifted.

AI has admittedly stolen some of the spotlight from Web3, not to mention stigma from FTX, and that’s taken away people that would have been innovating here! Or even makes the flakey degenerates up and leave to make their AI girlfriend chatbots!

Anddddd the ones that stay in the space have gotta get creative if they can’t innovate to make some money….

Let’s call this ‘the Disney effect’, sure you innovate and make some great movies, who doesn’t love aristocats (talking singing jazz cats come on!!), but after a while the market changes and the best way to make capital is to extract it from intellectual property you already own, the nostalgia…….

And then we get a load of shitty derivative Star Wars movies dumped on us because of course we’ll go and see them just to say that we hate them. We all agree it’s terrible, yet we’re all interested - this is the basis of cognitive dissonance theory.

It’s especially rampant in crypto. We provocatively add value to valueless relics and it just grips us and sucks in value even more, and we have to embrace that to make money in the space as investors!

Alpha⚡: This signal is a key to the beginning of a narrative for the next leg of the market with the outflows and market changes with AI etc, because as always…..history doesn’t repeat itself but it does rhyme! 🤑

So, the alpha is nostalgia plays. We go full Gary Vee on this shit! We buy up every original test token, every founder’s first project coin, every memento with no value.

TLDR; We’re looking for the opposite of what you know to be a good investment = valueless token, forgotten, original, heavy concentration to founder or burned, but most importantly it must have optics/relation to a popular project or founder.

Mark my words, you’ll see more and more of this in the future cycle but you need to position yourself now……I feel it in the force 👀

Weekly positions:

Been buying $NITRO and looking for good re-entries but it just keeps pumping! Done 5000% in the last 2 days. There’s actually solid partnerships here so I’d wait for a small dip for entry and play it for 1-2 weeks. Happy hunting!

$NERD is also still looking good after launch back down to starting bid level, that Mcap is wrong and could be a good buy!

Wealth Building, Personal Finance Hacks & FAT FIRE

This week we’d thought we’d give you a little reminder on why good isn’t always good in investing, and why sometimes bad is good. We could all do with a little pick me up somtimes!

We’re sitting in October 2023 and the market has produced around a 2% return in two years. Sad.

We’re putting all this money away and we want our return dammit! But for FAT FIRE and true wealth building you will be compounding your cash for decades. And the maths behind why you should actually want poor market returns when you’re building your wealth is a bit crazy.

A lot of us have our picks and plays to gear up the returns we receive. The risk-on assets which we love here at Renaissance. These and your own start-ups are the best ways to get really wealthy as mentioned above. But we’ve still got to park that cash somewhere! 🅿 The core boring investments in the market often act as the backbone.

The market can go up or down in any given year, but on average over time the S&P has returned around 10% per annum. And historically the market has gone up 3 years out of 4.

So for simple illustration purposes lets take 40 years. On a positive year the market goes up 20%, on a negative year it goes down 15%. If of these 40 years, 30 years had 20% returns and 10 years had -15% returns, on average we’d have around 10% per year.

Now let’s look at two scenarios:

Scenario A: The market goes up for 30 years at 20%, and then down for 10 years at 15%

Scenario B: The market goes down for 10 years at 15%, and then up for 30 years at 20%

If you were diligently investing each month which returns would you want? What returns would you want right now earlier on in your investing journey? You’d want the market to go up right?

Well under Scenario A where you got amazing returns for 30 straight years, if you invested $500 a month, at the end of the term you’d have around $1.5 million.

Now under Scenario B where you went through loss after loss for your first whole ten years of investing (let’s face it, most people would give up at this point. Maybe this market thing is broken and I should do something else). But after 40 years under this scenario you’d have approximately $14.5 million. 

This is nearly 10 times more just from the sequencing order of the returns!

This is an extreme example with the bull and bear markets being in order consecutively, but this is something to keep in mind as the market goes through cycles. 🚲

You’d actually be far better of down the line if the market went through a long period of negative returns early on in your investing journey. So if it goes up we celebrate, and if it goes down remember this. The market is on sale. And it’s never a bad idea to buy quality assets cheap.

Meme of the Day

That’s a wrap for this week! Meet us on Twitter to talk all about it. Where we’ll send you jokes, tips, and all important news from the world of money, business and crypto and more! (@RenaissanceDly)

“Net Return" refers to the annualized internal rate of return net of all fees and costs, calculated from the offering closing date to the date the sale is consummated. IRR may not be indicative of Masterworks paintings not yet sold and past performance is not indicative of future results. See important Regulation A disclosures at masterworks.com/cd.