RCIF II - Five bullet Friday - Issue # 7

    All of you must have received your February statements from Intertrust Group. We returned 290.35% (after fees) in the month of February. If we returned 290% in 10 years, that would have been a great return, if you compare to major indices like S&P 500. As you can see here, in the last 10 years S&P 500 has returned 187.2%.

1. Most people don't understand that very few mutual funds beat S&P 500 in the long run. Some studies have shown that 80% of the mutual funds do not outperform S&P 500. A simple passive strategy of investing in VFINX from Vanguard would have saved a lot of hassles for many investors. It surprises me that hundreds of billions of dollars are paid out to these mutual fund managers, while they add no value at all. They will add more value to the society if they all turn into taxi drivers or carpenters.

2. In the past week, KBTC price traded below bitcoin's price. As a result, we did not get any income in the boardroom. We are generating income via staking in Uniswap, which has yielded us $331,000 in income. Now KLON position is reflected in our portfolio on Zapper. This number we see in Zapper is cumulative.

3. KLON token is expected to launch their version 2 this month. This version 2 will cut the outstanding tokens from a million to 500,000. The token contracts have to be migrated to a new token. The new token is likely to be called, 'RUSH'. Our stake in the protocol becomes more valuable as 50% of the potential tokens are removed from supply. They also plan on providing VeKLON as another token which is used for yield farming, which accrues to the stakers in the boardroom. They are also planning to launch many other synthetic assets. We control 20% of KLON protocol.

4. Today Elon Musk revealed that he purchased bitcoin not only from the Treasury of Tesla, but also from SpaceX. Elon Musk's total exposure to bitcoin is now close to $5 billion, it seems. That is a big vote of confidence coming from the richest man in the world. Recently I came across a good video from the CEO of Microstrategy, Michael Saylor in which he was addressing other CEOs. It is worth a watch: https://www.youtube.com/watch?v=CoOPoIpLFpQ

5. I used to travel to Omaha, Nebraska for the annual meetings of Berkshire Hathaway as I have been a shareholder for many years. In one of the meetings, he was asked how he decides which of his portfolio holdings he will allocate new capital, that comes from insurance premiums. Berkshire's portfolio consists of 20 major multi-billion dollar enterprises.  He would not add the money equally to all of them, but he would add a big portion of his capital to the company that has the best return on invested capital. Similarly, our SNX and YFI are not generating as much income for us, when compared to KLON. I think that is a more prudent strategy to add our capital to those positions which are generating a lot more income as seen in our Retained Earnings spreadsheet. This leads to a lot of concentrated positions. So, going forward, I will not buy more KLON as I am happy with our current position.

Have a wonderful weekend!

warm regards,

Sam Ikkurty

Managing Partner