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Steve Harmon - Checking In With China & Crypto

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Checking In With China & Crypto
 

Steve Harmon

June 7 · Issue #25 · View online
Beyond the hype, inside the world of venture capital, tech, stocks and trends, from Silicon Valley to Shanghai, from veteran investor and entrepreneur Steve Harmon - followed by many leaders in finance and tech, see more: http://steveharmon.com

Checking In With China & Crypto

Data Is A Verb
In 1998 my plane touched down in Hong Kong at Internet World trade show. Some 15,000 people or so swarmed the building. My keynote speech at the show was how data was the new oil.
How a century earlier oil had powered wealth creation. Cars, roads, suburbs. And here we are today with an entirely digital ecosystem around the world’s largest companies.
Data beats oil with scale. Replication drives down the price of data acquisition. On the other hand, every new oil well or shale deposit requires massive capital outlays upfront. The cost to acquire oil is limited to gravity-bound efforts. Meanwhile, in digital space – yes, zero gravity – the cost to make another copy of iOS is virtually nil.
I don’t think investors or many entrepreneurs yet understand this new environment. Even 20 years later.
Data is not a noun.
Data is a verb.
It grows itself.

China Stocks: Then & Now
To prove this point I checked in with some Chinese Internet stocks that I wrote about and recommended back in 2001 when I wrote for Zacks Investment Services, a subscription-only newsletter.
I also taught entrepreneurs in China for several years and got a good look at how things were building out there.
In the interim years something happened in China that I predicted: consumerism. That drives buying stuff like phones, which drives adoption of online services.
In the early days of China tech it was believed they mostly copied Silicon Valley, cloning google, facebook, whatever. Some of that is true.
But what happened in China was fierce competition combined with massive user bases to create brand new methods to do online services. These days in many ways China is ahead.
A picture is worth a thousand words, here are the stock charts of a few of them. Note the early price versus today:


Off The Charts
NetEase went from about $3 to $250 per share. This is a company I had partnered with to do entrepreneur training in China with.
Sina went from about $1 to $40 per share during the past 17 years.
The market finally recognized what was happening in China. But I think that market still has more to ground to gain. It makes the US stock market look like a snail.
Crypto
I think we may be in a similar situation here with crypto/blockchain. As mentioned many times, I believe most of the crypto and tokens are garbage. I own 2: XRP and XLM, both financial enabler services. In my new venture I use Ethereum (ETH) to handle smart contracts. So that’s 3 I think hold promise. Out of thousands. I don’t own Bitcoin but know people who rave about it.

Invest?
China looks within reach for average investors to me. So do the crypto above. If I were a large hedge fund I would consider taking huge stakes in several. I don’t think many investors truly understand digital space yet …
God bless and take care,
steve


p.s. to hear about my new venture, Ditto, email me steveharmon@gmail.com
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