Snapchat, Ethereum, Bitcoin, China and India…Being a Public Market Venture Capitalist

Tomorrow I will buy my first shares of Snapchat. It is below the IPO price.

Today I was buying some Ethereum. I started at $190 and bought down every $10 into the $140’s and it seems to have stopped going down for the moment. I remember the good old days of MAY, 2017 when it last traded at $140.

This week it looks like I will be buying for Bitcoin (would probably start buying at $1700).

The last few years I have started to treat a few of my liquid positions as public venture capital.

I explained it a bit when I started buying Ctrip ($CTRP) and MakeMyTrip ($MMYT). I have never really owned Chinese and Indian stocks but since I will likely never invest in startups in these places, owning leaders in certain industries is my way of being a venture capitalist in these markets. I get the added benefit of liquidity if I change my mind.

Generally I give new stocks I buy very little room for error. I keep stops at around 10 percent and if stocks do well I try and let them ride as long as possible within a band.

With my 8–80 portfolio where I put most my public stock allocations, I am thinking of owning for 5 plus years and look for 20 plus percent drops to add or enter.

With my public venture capital ideas, I am willing to give positions a much wider loss range of 40–60 percent (that has not happened yet thank goodness) and my first buys will likely be early and wrong.

This is how I am thinking about Snapchat for instance…

At $17 billion it is obviously not a startup, but I believe Facebook/Instagram can’t kill it. Facebook has done a fantastic job of keeping a lid on them for sure, but I believe it is as likely that Snapchat is worth $40-$60 billion in a market like today than say $5 billion. So, if I can average into a position over time of $13 billion (assuming Snapchat keep dropping over the next 3–6 months), I have good upside/downside risk picture.

It’s easy to stay up to date on Snapchat as I own and operate two millennial/Z generations kids.

If Snapchat gets taken out in a month at $30 billion…great.

Have a great week.


Originally published at Howard Lindzon.