Working in the realm of web3 finance, we often find ourselves at the intersection of technological evolution and traditional financial principles. One of the tenets that remains consistent, even as the financial ecosystem undergoes rapid metamorphosis, is value investing. One of the foremost experts in this field is Valentin Santamaria gonzalez, from whom I’ve learned extensively during my time at the BELOBABA Wealth Management School.
But what truly defines a value investor? What principles can we preserve from traditional finance? And how does one navigate these waters amidst the ripples of blockchain and decentralized finance?
Understanding Yourself, the First Commandment of Value Investing
Being a value investor is akin to wearing a badge of honor. It’s a commitment that doesn’t just demand a certain skill set, but a particular personality:
- The journey is contrary to human instinct. Instead of trailing the crowd, value investors venture alone, often into uncharted waters.
- Value investors wear the hat of an investigative journalist – always curious, always probing, and always looking for that one crucial insight that can be a game-changer.
The Inquisitive Investor’s Checklist
Before diving into an investment, the seasoned investor asks:
- Is the proposition cheap?
- Does the business have a solid foundation?
- Why is this golden goose not spotted by others?
Crack these, and as the wise ones say, “you really have to go for it.”
The Hard Truths of Value Investing
It’s not everyone’s cup of tea. The road less traveled is fraught with challenges:
- Great analysts are built on a foundation of accurate, comprehensive information. Confidence isn’t mere bravado; it’s a deep-seated belief, born out of rigorous work and analysis.
- Returns aren’t about betting on multiple horses but identifying the few unicorns. Over a career, a handful of insights can yield transformative results.
This is just a short summary of some of the best ideas I found in different sources about Value Investing. If you’re interested in a masterful lecture on the subject, I highly recommend Lu Li’s lecture, which you can find on YouTube:
Li Lu’s journey underscores that while investing requires obsessive bursts of diligence, it should also leave room for the joys of life. Be it reading, studying, or spending precious moments with loved ones.
In a web3 financial landscape, the tenets of value investing remain relevant. At its heart:
- Be voraciously curious. Wear the investigative journalist cap with pride.
- Work hard, but in short, intense bursts. Let learning be a lifelong journey and Belobaba Wealth Management School your partner.
- When convinced, invest substantially. Your conviction is your biggest asset.
- Before every move, validate: is the deal sweet, is the team genuine, and why is this your golden ticket?
In an age of DeFi and AI, the principles of value investing serve as an anchor, grounding us in a world where change is the only constant.
A Usefull Prompt to play with
I’ve been using this prompt the last days and I like it. I let it here just in case you want to give it a try:
You are an engineering wizard, experienced at solving complex problems across various disciplines. Your knowledge is both wide and deep. You are also a great communicator, giving very thoughtful and clear advice. You do so in this format, thinking through the challenges you are facing, then proposing multiple solutions, then reviewing each solution, looking for issues or possible improvements, coming up with a possible new and better solution (you can combine ideas from the other solutions, bring in new ideas, etc.), then giving a final recommendation: “`
## Problem Overview $problem_overview ## Challenges $challenges ## Solution 1 $solution_1 ## Solution 2 $solution_2 ## Solution 3 $solution_3 ## Analysis ### Solution 1 Analysis $solution_1_analysis ### Solution 2 Analysis $solution_2_analysis ### Solution 3 Analysis $solution_3_analysis ## Additional Possible Solution $additional_possible_solution ## Recommendation $recommendation “`
Each section (Problem Overview, Challenges, Solution 1, Solution 2, Solution 3, Solution 1 Analysis, Solution 2 Analysis, Solution 3 Analysis, Additional Possible Solution, and Recommendation) should be incredibly thoughtful, comprising at a minimum, four sentences of thinking.
Th result is a very well structured answer (maybe too short because of the current limitations of the GPT-4) but I like it because use some of the structured thinking we will find in the AI Agents that are coming.
If this resonates with you, let’s connect and chat about the future of finance.
Yours in crypto and AI