Portfolio: Decentralized Economy

📊 Investing
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I just created a starter portfolio to get exposure to the ‘decentralized economy’. By that I mean stocks that enable individuals to sell products and services to other individuals directly. The reason such as portfolio can be interesting is twofold

  1. It saves individuals/businesses money to directly connect to the person who is going to do the work and pay them only once for that work instead of having to pay fixed salaries.
  2. The trend of increasing centralization (concentration of power in a few companies) has risks: censorship & de-platforming, both online and offline. These services allow individuals to de-centralize from these centralized services.

Freelancing services:

  • Upwork
  • Fiverr
  • Amazon Mechanical Turk

Food delivery

  • Delivery Hero
  • Just Eat Takeaway
  • Uber Eat

Crypto / Fintech

  • Robinhood
  • Coinbase
  • Wise (Low-cost multicurrency bank account)

Marketplaces

  • Ebay
  • Amazon
  • Alibaba
  • Etsy

Transport

  • Uber
  • DiDi Global

Housing

  • AirBnB
  • Rightmove

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If you have any comments or stocks to include, feel free to add suggestions.

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What about “decentralized” healthcare

teladoc and others would pop into mind

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Is Teladoc decentralized, seems like it has in-house doctors that help patients. I also wonder what kind of long-term competitive advantage they have over your local doctor just using Skype or Zoom to help his clients.

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Some others I’ve added:

Deliveroo
Auto Trader Group

The latter one seems really interesting now with the boom in used vehicles.

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Seems like an interesting concept to catch the micro environment at the moment!

I’m considering doing the same with a small amount just for fun

EXPI might be worth a look at for housing also?

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Would the Apple and Google App marketplaces be too far a stretch, or does their main focus exclude them from your list?

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Googl does indeed allow individuals to easy distribute their apps & host the backend (Play Store and GCloud respectively) and allow individuals to make money on content (Youtube). So it could be added to the list for those reasons. One negative perhaps is that Google is increasingly cracking down on dissent and that big producers have an increasing advantage over small ones.

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Yeah EXPI is a good option for housing indeed, thanks.

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Have there been any law suits for this yet?

Apple just settled one finally, which meant that they take a 15% cut from developers with revenue under £1m.

I believe the usual cut is 30%, which is huge if you think about it. With that being said, Apple and Google always have the argument that they give a level of exposure to devs, that otherwise would not be possible without there platform.

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I’m not saying that these fintechs are cheap, but PayPal and Square follow this trend nicely?

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You’re right, that’s why included Wise, which has a market cap of “only” £10 billion vs over $300 billion for PayPal, which in essence does more or less the same thing.

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Seems smart, I’ve never actually looked at wise in fairness.

Is it worth a butchers?

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In many ways it ranks favorable to PayPal, other than market share of course.

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Another stock that could be of interest is ANGI, which provides a market for home improvement, that is it allows people to post jobs (e.g. electrical, plumbing, renovations) and skilled workers to bid on these jobs.

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I’d consider removing Robin Hood on this due to the large portion of revenue from payment for order flow.

Of course it may not come to fruition.

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it doesn’t even matter at this point if it does or not. the news alone with shake up the listed stocks for everyone who uses that as a source of revenue. especially for those like RH where its a sizable amount.

its a pretty good direction for the market if it goes ahead.

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This is worth a butchers. The article states that 80% of total revenue is made up from payment for order flow (ouch).

I haven’t checked the last earning to verify, however even if it’s close that’s a hellish chunk to lose.

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Yeah, you’re right, probably a good idea to take this one out of the portfolio.

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Does RH even “enable individuals to sell products and services to other individuals directly” - the main criteria? If so, then under the same assumption IBKR could be added as well?

How about Online Blockchain - they built the Mooning Market, which going by the website allows people to " Buy / Sell Almost Anything With Bitcoin"

https://mooningmarket.com

It also has a 17.98% share of ADVFN, which currently has a mcap of 17m, so half its current mcap is this other service.

*Edit not on IB as ASX1

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You’re right Robin Hood doesn’t fit the criteria. The rationale was to get exposure to the growing crypto industry, which is in part driven by the “decentralized” economy (although at the moment it seems to be more like a giant online casino).

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