Virtual worlds, digital economies, and, yes, NFTs…

Between Roblox’s $40 billion direct listing this week, Beeple’s $69 million NFT sale, and Top Shot’s $20 million NFT whale… the digital economy is outright exploding. But not all metaverses (metaversii?) are created equal. Ben Thompson of Stratechery goes on a deep dive of how a metaverse like Roblox may be disrupting not just traditional gaming formats—but also challenging incumbent business models built on digital entertainment, social media, and even traditional toys.

The Roblox Microverse – Stratechery

“In short, Roblox isn’t a game at all: it is world in which one of the things you can do is play games, with a persistent identity, persistent set of friends, persistent money, all disconnected from the device that you use to access the world. That is the transformational change… Roblox is the exact sort of platform that is only possible when you accept the reality that the platforms on which it rests aren’t going anywhere. The responsibility of those foundational platforms is to give room to let these microverses flourish, without legislating or taxing them to death.”

The big battery boom (and why lithium is the new oil)

For years, we’ve been studying how utility-scale battery deployments increase resiliency and lower grid costs (and could ultimately disrupt legacy natural gas peaker plant business models). Over the last few weeks, Texas, thawing out from a statewide energy crisis, realized just how essential battery storage technologies can be for the grid. As the costs of battery manufacturing declines—and efficiencies improve—batteries are becoming the new oil of the energy markets. Plus, add a layer of software to help manage the grid—and we could see the biggest energy boom in decades, all built off renewables and battery storage.

Tesla Is Plugging a Secret Mega-Battery Into the Texas Grid – Bloomberg

“A Tesla subsidiary registered as Gambit Energy Storage LLC is quietly building a more than 100 megawatt energy storage project in Angleton, Texas, a town roughly 40 miles south of Houston. A battery that size could power about 20,000 homes on a hot summer day. Workers at the site kept equipment under cover and discouraged onlookers, but a Tesla logo could be seen on a worker’s hard hat and public documents helped confirm the company’s role.”


Riding winners—when it’s a winner-take-all game

When do you sell a position? This is a question we constantly think about. Lawrence Burns, an investment manager at Scottish mega-fund Baillie Gifford, has a smart analysis here, writing up top that “a tiny number of superstar companies account for returns from equity markets.” If that’s case—and we believe it is—how should one design a portfolio to capture those potential long-term returns of a superstar winner?

Why it is usually a mistake for investors to take profits – Financial Times

“..conventional wisdom pervades much of the financial industry. As the old saying goes, “it’s never wrong to take a profit”. A client is unlikely to be unhappy or indeed notice if you sell a stock that subsequently goes up significantly. The loss of foregone upside is not captured in performance data. Perhaps it should be… For the client, equity investing is asymmetric — the upside of not selling is nearly unlimited, while the downside is naturally capped. For the client it can be very wrong to take a profit. Sadly, too few fund managers try to get investment right for investors. Most conventions and practices exist to serve, protect and enrich investment managers’ interests.”


Apple’s (monopolistic?) dominance

Investor Matthew Ball goes on an incredible deep-dive of Apple’s dominant platform, and how it both creates—and potentially stifles—innovation, entrepreneurship and wealth creation on the platform for developers. There is no doubt that Apple controls the ecosystem, but the key question will be how that monopolistic control is wielded…

Apple, Its Control Over the iPhone, The Internet, And The Metaverse – Matthew Ball

“Right now, we are on the cusp of the next internet. The terms used for this future vary and the degree to which you believe in one label or vision is not particularly relevant. And the technologies to design, enable and support the fullest version of this are as far from the capabilities of 2021 as the 1990s Internet is from us today. But what matters is that a growing share of our time will be spent within virtual spaces and with virtual goods — for education, work, health, politics and leisure. Sometimes these spaces and goods will be purely virtual, other times virtual twins of physical ones, and sometimes augmented reality. For related reasons, a growing percentage of our income will be spent on virtual assets, goods, experiences — many of which we’ll be able to sell, trade, share, use or improve. And of course, enormous new industries, marketplaces and resources will emerge to enable these opportunities, with novel types of labor, skills, professions and certifications invented to serve them.”

This information should not be considered a recommendation to purchase or sell any particular security. It should not be assumed that any of the investments or strategies referenced were or will be profitable, or that investment recommendations or decisions we make in the future will be profitable. This article contains links to 3rd party websites and is used for informational purposes only. This does not constitute as an endorsement of any kind. While Nightview uses sources it considers to be reliable, no guarantee is made regarding the accuracy of information or data provided by third-party sources. Nightview Capital Management, LLC (Nightview Capital) is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Nightview Capital including our investment strategies and objectives can be found in our ADV Part 2, which is available upon request.