Doge Proves the Rule
One of the things I keep a pretty close eye on in my role at Permanent Equity is our returns. After all, if our investments were not to generate an appropriate level of them, Brent might find himself another chief investment officer (sad!).
Yet there are also a number of different ways to look at returns. You can look at them over different time periods, on an absolute basis or relative to other things, compared to how much risk you are taking or how hard you are working to earn them, and even whether or not there is a non-economic component – like a social good – to them. And whenever I’m calculating our returns, I get curious about all of those things.
So there I was running our year-end 2024 numbers (investors, you’ll get them soon) thinking what I was thinking about them (I can’t give away too much here because this is a sensitive regulatory topic about which our chief compliance officer Taylor is risk averse plus I don’t want to go to prison) when I got to the part in my spreadsheet where it compares how we did relative to how other things did. Because I’m morbidly curious, one of the other things I include in that part of the spreadsheet is bitcoin. And I hope I’m not giving away too much or will go to prison when I tell you that bitcoin – which increased approximately 125% in value in 2024 – did better than Permanent Equity last year.
You should know at this point that I am the person who gave our pickle-ball-playing, March-Madness-pool-organizing friend David an endlessly hard time about speculating in polkadot and also probably the reason the otherwise aforementioned risk averse Taylor (people trying to sell us insurance know to call him, not me…shoutout Tom) ended his dalliance with dogecoin. So I probably don’t need to tell you how I felt about lagging bitcoin and also that I then proceeded to benchmark Permanent Equity against polkadot and doge.
Thankfully for my sanity, I discovered that polkadot was down 20% in 2024, but then learned that doge was up more than 300%?!
I wrote way back in season one of this whatever-it-is that returns come from what you pay for something and how well you operate. On the one hand, recent experience demonstrates that perhaps that’s naive. But on the other, remember that it’s the exception that proves the rule.
– Tim
