Quick hits in the finance substack-verse
YC investment performance, Li Lu’s investment lessons, Cross-border payments
I wanted to recap a few recent “quick hits” of finance-related highlights I’ve come across in the Substack-verse:
Analysis of YC investment performance on Lenny’s Newsletter: As someone who is a semi-frequent angel investor in YC companies, I found this analysis in
especially interesting. A few things that stood out:Fintech is over, back, or never left, depending on who you ask, but it has been an enormous contributor to YC returns, led by Coinbase, Stripe, and Deel
This analysis argues that the shift to B2B companies driving returns indicates that “the shift away from Consumer is likely driven by the fact that most of the large Consumer companies have already been invented”; I’m not so sure that I agree with that statement. While there has certainly been a ton of innovation in B2C, I also think it’s clear that with new transformational technologies, most notable GenAI, here to stay, there will be a number of opportunities for new consumer applications. Two of my recent angel investments, FIG and StudyDojo, are good examples of creative new consumer applications
The U.S. is still the global center of innovation and startup activity; more than 70% of YC companies are from the U.S., but I was encouraged to see other geographies including India (#2), Mexico (#6), and Singapore (#9), also well-represented amongst YC batches
Li Lu’s six investing lessons in Kingswell:
, a newsletter that gives updates and analysis around the world of Berkshire Hathaway and value investing, is one of my favorite Substack newsletters. Here it highlights six investing lessons from Li Lu, a famous Chinese investor and acolyte of Charlie Munger. A few thoughts I had:“Market fluctuations should serve you, not guide you”: I generally agree that, as Lu mentions, “Mr. Market” will tell you the price of stocks, but not their true value. On a long enough multi-decade time horizon, I think this philosophy is wise. However, I have also heard the saying “If you don’t do the macro, the macro does you,” and professional investors or even retail investors with liquidity needs or performance requirements can get whacked by macro circumstances if they completely ignore them.
“Wealth is all about purchasing power”: I think Lu’s insight that “Wealth is your share of purchasing power of the entire economy” is a profound one; it can be tempting to keep assets in cash, but as the broader economy grows, you want to maintain or grow your share in the economy, and the way to do that is through owning a share of economic activity.
Matt Brown’s Cross-Border Payments in 1000 words: I always enjoy
around different fintech topics, and my main takeaway from learning more about the cross-border space is that putting in the work to build out the back-end and regulatory infrastructure to properly facilitate cross-border transactions and payments is a real and durable moat in the fiercely competitive world of payments.