Finance and Ethics: Key Lessons

If you think about how financial markets run, a lot goes on in terms of volatility and emotionally driven events. This is true whether in the stock exchanges, real estate, fiat, or other economically driven mediums of exchange including crypto. Some people might take advantage of such events or cross some ethical boundaries in order to make money. I’m not trying to point fingers, but I am saying this is bound to happen in any type of event driven by markets.

This is why more and more companies are remaining or going private. This is also why I see the emergence of private exchanges like CartaX, a really big thing in the future. Infact, I really think that just how you had initial public offerings in IPOs, you will have initial private offerings in the future for institutional investor liquidity.

Many companies are going out of their way to chose to remain private because they are worried about market manipulation, activist short sellers, or similar hassles revolved around going public. If a short seller says misleading information about a company, they are not only occasionally temporarily making money, but now the company may need to take time out of their busy schedule to respond. Not only that, but many short sellers have guerilla marketing strategies or know how to be viral at least for their entry level goals. This means that if a short seller has a really negative track record, that may not even effect how some people listen to them.

There are two petitions on Change.org against Andrew Left of Citron Research. One of them was made few years ago, and can be seen here. Another one of those petitions was few months ago, and can be seen here. We also need to remember how Citron accused Shopify of being an illegal get rich scheme in 2017. Citron has shortened $TSLA, $UI, $W, $GSX, $NIO, $JMIA, $PLTR, $NNOX, $PTON, $LAZR, $DASH, $SOLO, $INO, etc. While not all these companies are great or ones that I would buy, some of them are. Many of you also know I am long on $NNOX.

The track record of shortening trending stocks or tech plays haven’t been great, and some of these stocks went up over 400% since the time Andrew Left released a short report. I also covered controversy in regards to both MuddyWaters Research and Citron.

Personally, I disagree with Citron Research’s philosophy in regards to how they go about a short call. Many of their tech plays really end up failing. Many short sellers that went after Urban One, and Nikola had very decent points. Luckin Coffee was also one of the more obvious shorts of 2020. Andrew Left was also part of an Emerging Markets SEC round-table panelist discussion. Not everything they do is bad, however, the track record objectively isn’t great in regards to long term ROI.

Other markets I notice that have alot of things going on is crypto. I personally been interested in the crypto and blockchain space since 2011. There are alot of things that I like about the crypto world, and alot of things I don’t like about the crypto world. For starters, there are alot of unfortunate scams. I have made an article before on obvious crypto scams like Bitconnect and Paragon and their rise and fall. I am also not really a big fan of the cryptocurrency known as EOS.

I feel like a big problem in the crypto space is that you have this bubble of ICOs, where you see 99% of altcoins worthless or not offering anything beneficial. People release a worthless crypto, raise a bunch of money through an ICO, cash out their money in Bitcoin, and the crypto crashes. Not all ICOs are like that, but many of them are. This also ruins it in regards to how people look at crypto or governments now thinking regulations need to be even harsher.

I said it before and I will say it again, the crypto market needs less shills. There needs to be a higher focus on decentralization over centralization and building something unique and innovative. That is why lots of the tech that I either get involved or become interested in has something “different” about it. You can also say the same about private equity and the “me to” problem in Silicon Valley and startup culture.

Now I’m also seeing the whole “decentralized finance” trend in the cryptocurrency space. To be honest, I’m not that big of a fan. The original point of blockchain in the digital cash space is p2p electronic cash based systems. This is true with Bitcoin as well as what many of the attempted cryptographic pre-successors to Bitcoin have done. When you add this whole DeFi trend, many people will start wanting to hop on the next popular thing like ICOs and not really do something meaningful.

When I look at where the future is heading in financial markets, there are a whole bunch of things I’m taking into consideration. For starters, I’m thinking more consensual and ethical frameworks will be developed around certain market ideologies. These don’t necessarily need to be governmental enforced. I feel like once people have a decided view on where they want the future heading, lots of positive change could happen. However, I could also be a bit too optimistic.

I see a massive paradigm shift in regards to socioeconomic models and philosophies as well. Many people are looking into anarco-capitalist economic and political philosophies. This may be a step in the right direction. Also non-traditional models such as crowdinvesting and private equity offerings on private exchanges, may make public exchanges such as the NASDAQ more competitive. I see alot of changes going on in regards to how people invest and their investment strategies. In some ways the old VC model was better, and in some ways the traditionalist model of investing is outdated. I don’t think necessarily we need to pick and chose.

I do engage in research related to the sensory tech and medical device industry. However, I hold no relations to Nanox Imaging or working with Nanox Imaging. My only current conflict of interest is being long on its stock.

Disclosure: Please keep in mind, everything I say is on an opinion based basis. This is not meant to be taken seriously or as actionable financial advice. Do your own due diligence and any trades/investments you do is at your own risk. We are not responsible, proceed with caution and we are trying to voice an opinion not meant to warrant action. This is solely meant to be viewed as a non actionable opinion not meant to be taken as seriously or as a form of actionable advice.