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Welcome back to another week with Renaissance. The newsletter equivalent of this energy. 🙌

“I haven't needed the money since I took Archie's milk money in the third grade.” - Jack Nicholson in the Departed

Each week we give you actionable intel and opportunity to assist you on the journey to financial independence. 🛣

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Today at a Glance:

How To Social Arbitrage Trade Your Way To Millions

Azuki's Big Elementals Drop

How To Make Money From Failure

- And remember guys we don’t do this all for free…..well we do, but still. Honour our gentlemen’s agreement and refer a friend. 🤝 

- We’ll give you some free tailored advice to set you on your journey to financial independence. What are you waiting for!

You are: 1 referral away from a free personal financial consultation!

 Refer your friend using the link below ➡ Reply to this email, copying in your referred friend with the phrase “I want my free consultation” ➡ Your journey to financial independence starts

The Board

The Renaissance Over-Under

Business, Money Markets & Financial News

How To Social Arbitrage Trade Your Way To Being A Millionaire 👫 📈

- Money is a game of doubles. Chances are you’ve got $1000, but that $1000 is 10 doubles away from a million……….so how do you get the doubles I hear you ask? If only if only…….enter social arbitrage trading. 👀

- What is it? Social arbitrage investing is getting your money into stocks that will benefit from a new social trend, or change in people’s thinking before Wall Street analysts even understand what you’re talking about. There are many famous solo investors who use this strategy and have turned 10K into 21 million!

- You can’t learn this from a chart and you can’t beat it with technical analysis. All you have to be is a normal and smart human. This is your edge over hedge funds who are so out of touch with people and social media, they never see this coming.

⚡ In a nutshell:

1) Find the social or pop culture change,

2) Do your research on what companies could benefit from this change,

3) Check to see if it’s already been priced in from an earnings call or by analysts,

4) If not - then you’ve got yourself a social arbitrage trade - where you know the trend, how to profit, and you can get in early. 🎆 

- But because we’re so good to you at Renaissance we’ll show you a case study of one of ours for free!

Identify the social change & trend around you ⚡

- Unless you’re a reclusive analyst in your basement, you’ll have noticed the meteoric rise in this ‘old money aesthetic’ style. Urban outfits have taken a decline and anything that can facilitate this old money look will kill it!

- It’s some Sherlock Holmes shit, you see but you don’t perceive….…I’m sure you’ve seen videos and images like this on Insta and TikTok etc. The trend has emerged that only the socially adept will catch first. ✅ 

Validate the trend - get metrics to see just how big it is! ⚡

- Anyone can get on google trends or something similar to measure a site’s traffic. This is how you go from seeing an early social media trend to seeing the number of likes and views to gauge the social sentiment. Back that up with some solid trend lines and you know you’re probably early to catching the wave.

Find your company that can benefit from the trend ⚡

- You have your trend now. You’ve got validated social data and numbers. Now where is all this traffic and interest going to pile up to a bunch of dollars??

- You’ve got to think of a public company that you think will benefit from this and then validate your bright idea, making sure you’re early to the party and the fireworks didn’t go off 1 or 2 earnings reports ago! 🎇

- Weirdddd we know……old money doesn’t scream this brand, but public companies in this field are limited, and Ralph Lauren etc. are so closely watched by analysts you probably wouldn’t get the opportunity on them!

- But, Abercrombie is not the cancelled giant you remember it being! In fact it’s reinvented itself the last few years, made cuts to have great margins, and most importantly - started selling cheaper alternatives to this old money look and is included in most of the clothing tips videos on Insta and TikTok!

Is Abercrombie coming back?

- “In 2021, its operating margin was the highest it had been in over a decade, and in the third quarter of 2022, net sales for the brand had increased by 10 percent compared to the same time the year before. All that to say, the brand is back with a vengeance — and better than ever.”

- More importantly, most of its items related to this trend were completely sold out online - giving a sharp demand signal on the back of their profitability!

How to validate the trend with the stock - by the numbers 🤓 

- This is probably the most important bit! This is the bit that’s make or break for the trade and to make sure you’re onto a winner that’s not priced in already.

- Get your investigator hat on for this bit and hit the streets! Noice.

- You have to be analytical at this stage and get your raw data from the source - what does that mean?? 

- ⚡ Study the stock price after earnings calls and get feedback from both the markets and analysts.

- ⚡ Walk into as many of the stores in person as you can. On the website see what items are out of stock and in how many locations. How many trucks for deliveries are coming and going? Find out the footfall and average order value for customers.

- ⚡ Talk to employees about their day and what they’ve seen - they don’t even know they’re holding all the valuable information!

- ⚡ Talk to customers and people in the target demographic to understand if they’re buying.

- ⚡ If you really want to get into the weeds you can find out where the items are made and talk to manufacturers and employees. Get creative - all the raw data and information doesn’t change, it’s there for you to see like anyone else. And the sooner you do that before everyone else the better the trade will be!

Speed to entry ⚡

- Once you have your trend, stats, company and conviction - you have to enter the trade as soon as possible. Do not delay. Being early in social arbitrage trading is everything, if you hesitate you’ll miss the window to make the gains that make the strategy worthwhile!

- In this scenario depending on your risk and portfolio size you should be placing between 5-25% of your entire portfolio on these trades for the strategy to best pay off.

- Therefore the number of trades per year are small but they’re well researched. Call us Miguel cause we’re looking for a sure thing! Not dicey speculation or technical analysis.

- The beauty of this strategy is that anyone can actually do it if they’re social and in tune with society more than they are with the markets. It has nothing to do with debt, P/E ratios, nothing but sentiment and trends leading to a bigger number of sales!

- And sure enough……..at the earnings call Abercrombie smashed their targets set by Wall Street. 😎

- And the real kicker that’s making this all the more likely is the Lipstick Index - Alexa, what’s the Lipstick Index? 👇 (and hint hint, it’s linked to a lot more consumer goods than just lipstick)

 “term coined by Leonard Lauder, chairman of the board of Estee Lauder, used to describe increased sales of cosmetics during the early 2000s recession. Lauder made the claim that lipstick sales could be an economic indicator, in that purchases of cosmetics – lipstick in particular – tend to be inversely correlated to economic health. The speculation was that women substitute lipstick for more expensive purchases like dresses and shoes in times of economic distress.”

- The next big play we’re looking at….. Crocs! Again weird, but could be great. If you want more examples of social arbitrage investing see the link below:

https://theimpactinvestor.com/what-is-social-arbitrage-investing/ 

LITTLE BITS 😎

Young people in China are giving up their high paying jobs to work in Burger King and other low wage simple jobs in a huge new trend - they’re claiming it’s better for their life and mental health not wanting to climb the corporate ladder……….crazy I know. Here it is

Oh Zuck……

$2K to set up and it now makes almost 3 million a year on Airbnb. I’m speechless

Hate your life and want to sell everything? Easy, just buy a campground and operate it to get $1.2M a year 🤷‍♂️

https://www.youtube.com/watch?v=B08FbmwIjBU

For the start-up and tech bros out there, here’s an amazing doc from a16z (biggest and best venture capitalists in the world) on how to hire a chief product officer. If you’re an engineer or product person and want to break into the role you should learn from this!

https://a16z.com/2023/06/14/hiring-a-chief-product-officer/

This week we’re also showing off our friends over at First Class Founders, a seriously good read!

Learn proven strategies to build a loyal audience, create irresistible products, and scale your online business each week. Join 2,500+ entrepreneurs for free.  Check it out!

NOSTALGIA OF THE DAY

Crypto Market & NFT News

Azuki, One Of The Hottest NTF Collections, Just Dropped Another Collection (Elementals) - Should You Buy In? ⚡

Written 25th June

- After their Vegas event Azuki airdropped 2 new items into holders wallets! An Elemental chip (a soulbound token as memorabilia) and an Elemental bean.

- Each Azuki was airdropped an unrevealed Elemental and the remaining 10K Elementals were up for sale in the mint on Tuesday by public access.

- Listen up Renaissance, NFTs and their prices rise with FOMO and euphoria on the run up to announcement dates or sales! Kind of like really anticipated earnings calls for stocks. In most cases this is a buy the rumour sell the news event.

- Holding after the release or buying at mint is almost always a bad idea: This is when hype and prices are inflated, floors are meant to be sweeped after all……..🧹 

- Tell me one good mint price or IPO in the last few years we’re all still holding…………I’ll wait. 

- Facts: Bored Ape Yacht Club crashed 40% after their Dookey Dash game was released and Pudgies fell 33% after plushies. I mean BAYC and MAYC floors are sliding into dust the last week!

- History is on the side of a crash after the sale but Azuki is tough to bet against. After their first bean airdrop the price pumped continually. Although there are some very different factors now.

Sell the news case: Causes for Concern ⚡

- There is massive leverage in the system. Renaissance spotted 696 Azuki loans on blend (NFT loans) with $15M of leverage. 92 loans are on auction and lenders are pulling in liquidity so they don’t lose their shirt on this price action!

- The airdrop itself: collections almost always drop the floor price after an airdrop, e.g. Mutant Ape Yacht Club after the sewer passes. Again, everyone is in hype mode and when the sale happens - it kills all that speculation! Poof. gone. Now there’s a real price and a real number of sales. Not as CrAzYyYy.

- The NFT market: There’s UFC fighters beaten down less than the NFT market this year! There are basically no new people or organic traffic in the space AT ALL.

- Capital is coming from already existing members of the space………and if you’ve been under a rock, most people have made the wrong calls in Crypto this year and don’t have the capital on hand (not us, still thanking us for the PEPE and Coinbase call 😉)

- The price: they’re selling in a Dutch auction style at 2ETH mint price. 2ETH!!! And the fact this is a 20K collection massively dilutes existing holders with the sheer supply.

- This is a big price in this market. On the back of the NFT marketplace wars there’s now no royalties and they have to get their funds straight from sales. There’s only so far existing holders can be squeezed.

⚡

- TLDR; if you’re looking for a quick trade on Azuki we think you’re catching knives in the short term from the hype. 🔪

- Historically floors fall and the NFT space is dead right now. If you really want a blue chip NFT, wait for the dip 2 weeks out, sweep the floor and hold it long term waiting for the NFT space to come alive again.

- Eat that dip in the future if you’re really that keen, but PFP NFTs don’t hold their value.

After release and mint ⚡

- As expected, Elementals trading below their mint price. Along with duplicates spotted in the collection.

- But while this is a dilution event for investors and holders, Azuki raised 20K ETH to simply extend their runway and generate more of the same with no further utility.

And worst part is, they know it too. 👇

Wealth Building, Personal Finance Hacks & FAT FIRE

- To build wealth you have to do something different than others. After all if everyone did the same thing you wouldn’t be wealthy from it!

- Not everyone can even achieve FAT FIRE. It’s not possible for everyone to be enjoying Mai Tai’s on the beach 🍸 (well until AI does all our jobs for us anyway).

- This is as there’s only a limited number of resources and that’s just how it works. Someone should remind Jerome………..

- So if you want to be one of these outliers you need outlier behaviour. It’s this outlier behaviour that drives outlier outcomes. It is these tail events that really makes the difference and drive progress. What this means is that it’s only a small minority of actions that really move the needle.

- When something is true you see it across many areas and fields. It’s why you’ll see this trend from financial markets all the way to Disney cartoons below.

- Over the last 30 years if you missed the best 20 days of S&P returns it took your average annual return from 7.8% down to 3.2% - less than half! These outlier days alone are what led to the S&P being the best performing index in the world. 🌍

- Venture capital also works this way. It’s a tail-driven business. Make 100 investments, most fail and almost all your return comes from just a few.

- There’s been $482 billion of VC funding in the last 10 years. The combined value of the ten largest venture-backed companies is $213 billion - just 10 companies valued at half the industry’s deployed capital.

- But by nature, to have these outlier events and enjoy their success, you have to bear a lot of misses. In fact the large majority will be failures.

- A key distinction between the successful and unsuccessful is an understanding of this. That often failure is the price you pay for outlier success.

⚡

- The lesson is to truly build wealth you have to take these losses on the chin. Losses and failures should be viewed as an investment in your future success. It’s part of the process. The reality is most truly successful people have failed and failed until they hit the tail event that made the difference.

- For example, Disney’s first studio went bankrupt. By the mid-1930s Disney had produced more than 400 cartoons, most of them losing money. They were nearly broke when they finally made Snow White. But the money it made alone changed Disney forever and allowed them to pay off all its debts.

- They had made hundreds of hour of films, but the 80 minutes of Snow White was all that mattered. You’ve got to find your Snow White.

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)

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