If you turn on the TV, or read the financial press, financial pundits & investors alike are talking about “The Everything Bubble.” There are multiple stages of financial bubbles, & while each mania has its own nuances, in retrospect there are almost always commonalities that the market & market participants experience.

Howard Marks: “We Are In An Everything Bubble”

Dr. Jean-Paul Rodrigue published a widely circulated economic bubble chart in which he identified four distinct phases of a bubble, referred to as the (i) Stealth Phase (ii) Awareness Phase (iii) Mania Phase & (iv) Blow-Off Phase.

Looking at drawdowns in the S&P 500 as a proxy for “bubbles,”…


There’s been a lot of ink spilled over Square’s $29.0B acquisition of Afterpay, ramifications for public / private payment companies; with numerous bulls / bears on both sides. In most of what’s been written, there’s still a fundamental misunderstanding of Buy Now, Pay Later (“BNPL”), implications for incumbents, challengers, consumers & merchants alike.

BNPL is yet another payment type, not dissimilar from an unsecured lending mechanism. While some view it as the continuation of the evolution of alternative payment methods dating back to store charge cards in the late 1800s / early 1900s, and layaway / installment plans that became…


Financial Services Background

The origins of finance are as old as civilization itself, with the earliest historical evidence dating back to 3000 BC. Banking originated in the Babylonian empire where temples & palaces were used as safe places for the storage of valuables. Over the past 5,000 years there have been countless evolutions in how we pay, earn, save, spend, lend, borrow, invest & insure; yet we might be in the midst of the greatest concentrated period of innovation yet, due to the human & financial capital gravitating towards the broader FinTech industry.

There is no shortage of reasons to…


Last September we wrote about capital allocation & risk asset ramifications in a 0% interest rate world. We said:

“QE Infinity turned your savings account into your checking account, the bond market into your savings account, the equity market into the bond market, the venture market into the equity market, while given rise to the crypto market as the new venture market.”

We wrote about Bitcoin & SaaS Stocks in June, and SPAC’s and the Financialization of Everything in July. While these are all different themes, the growth in every one of them over the past nine months can be…


FinTech continues to heat up with demand from both public & private investors & seemingly not enough supply. FinTech 1.0, 1.5.0, and 2.0 public companies have traded well over the past 12 months or enjoyed warm welcomes to the public market with companies such as PYPL +103.8% / SQ+188.7% / and ADYEN+107.5%. For the recent IPO’s AFRM is +102.9% since IPO, while LMND +414.7%. For the FinTech SPAC’s IPOE is +102.8% / and INAQ 49.7% +from trust value.

At the same time the global FinTech venture ecosystem has attracted over $40B of capital during the past 12 months across 2,450+…


In May we wrote about COVID-19 as a societal accelerant, the implications for Cloud vs. Land Jobs, Content Consumption, Digital Banking, Domestication of Supply Chains, eCommerce vs. Physical Retail, Educational Disruption, Precision Wellness, Remote Work, Telemedicine, and more.

As we turn the page into 2021 we think it’s important to ask what demand was pulled forward and cyclical vs. what demand was permanent and structural. …


According to an analysis for The New York Time conducted by Mint, in 2019 people spent $640/year on digital subscriptions such as streaming video, music services, cloud storage, dating apps, and online productivity tools, up 7% from 2017.

West Monroe, a technology consulting firm published an article entitled America’s relationship with subscription services, where they conducted an analysis of 2,500 Americans’ budgets, spanning 21 categories of subscription service. When they first asked participants how much they spend / month on subscription expenses, the estimate was $79.74/month. …


Last week the DOJ filed a lawsuit to block Visa’s proposed $5.3B acquisition of Plaid which was announced in January. The complaint had to be creative because Visa & Plaid don’t really compete today but the DOJ held no punches. Throughout the complaint they harp on Visa’s monopolistic position as it pertains to online payments, the significant barriers to entry competitors would have entering the market, and the two sided network effect they’ve developed between both consumers & merchants.

Visa seeks to buy Plaid — as its CEO said — as an “insurance policy” to neutralize a “threat to our…


Background

If you rewind the clock ~100 years, prior to the Great Depression there was no concept of “public” or “private” markets; investments were on a continuum of liquid vs. illiquid and regulated vs. non-regulated. Like most things in 2020 the “ideal state” isn’t one of 100 years ago, yet in this instance it’s important to look at what changed and why.

The Wall Street Crash of 1929, also known as the Great Crash saw a two-day decline in the Dow Jones of 23% between October 28–29th, and ultimately resulted in the loss of 89.2% of its value in less…


Software contracts are better than first-lien debt. You realize a company will not pay the interest payment on their first lien until after they pay their software maintenance or subscription fee. We get paid our money first. Who has the better credit? He can’t run his business without our software”- Robert Smith

In June we wrote a piece entitled This Time It’s Different: Maybe? where we highlighted the outperformance of Cloud / SaaS stocks vs. …

John Street Capital

Interested in all things Venture, FinTech, Public Markets, Personal Finance, and Sports

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