The House of 69420
Vol #69 - February 11th, 2022
I apologize in advance for the crude references that may be contained here.
It wasn’t that long ago that only late night MTV shows could reference this kind of vulgarity. Today we have the Technoking of Tesla - the world's largest automaker and 6th largest company - publicly speaking like he’s at a middle school sleepover.
Now I’m far from a prude. My old yearbooks can certainly attest to that. And for whatever was left, it only takes a few days on the trading floor to stamp out Connecticutian sensibilities.
It is however hard to believe that as part of a light hearted but serious discourse, I’m celebrating my 69th newsletter by highlighting the crasser interpretation of the number that comes before 70, and the slang for an after-school stoner special.
That’s because 69 and 420 have become more than just locker room humor; they’re a battle cry and raison d'être for an investor class of growing significance.
When Bitcoin was approaching the price of $69,420, it felt like the entire community was willing it into existence. Even if you bought the top, knowing that the print was yours, was worth the price.
It’s not just on Twitter and Discord servers that this humor thrives. It has made its way into serious dealmaking worth billions of dollars. FTX is one of the fastest growing crypto exchanges, backed by blue chip firms like Tiger Global, Softbank, and even the Ontario Teachers Pension Plan. The group managing the retirement of teachers who gave detention for writing notes, opened up their checkbooks following the meme investing round where 69 participants raised $420 million dollars.
Perhaps because these memes are unappealing to the old guard is why they have such sticking power. Uprooting the establishment is exactly what has drawn many to crypto and decentralized finance.
By leveraging internet culture and speaking the language of the disaffected digital citizens, the community has created a strong identity. The meme is the message. It draws people in, and gives them reason to stick around.
We’ve talked here before about mimetic desire in investing. Buyer see, buyer do is a dynamic that is as old as markets. But memes are bigger than just markets. They cut across every sector, and form the zeitgeist of a unique time and place.
Every generation has their own “how to get rich” sector that is stereotypically mimetic. The Greatest Generation flocked to Madison Avenue to prove their mettle in the dazzling post war business of advertising. New forms of media offered exciting ways to peddle the wares of fast growing conglomerates to a booming middle class.
When Don Draper fell out of style, Gordon Gecko was there to tempt his children. Wall Street was in vogue for everyone from the salesman who could offload a yard of bonds, to the physicist who could model the price of a cliquet option.
The world of tech has eaten finance alive. While my corner of the world still envies the craftiness of Jim Simons and Ken Griffin, their $20 billion dollars only gets bleacher seats to the meme show.
Today the Forbe’s list is dominated by the likes of Bezos, Gates, and Zuckerberg. But as of today, the top two are both strong memers. Elon Musk is wildly successful at wielding the types of meme’s we’ve discussed so far. But at a broader and more culturally significant level, Bertrand Arnault has tactically assembled a deep stable of the world’s finest luxury brands.
LVMH stands for Louis Vuitton Moet Hennesy, and their empire is a who’s who of luxury. Whether wearing Christian Dior or Loro Piana, your Tag Heuer or Hublot will look great next to a glass of Krug or Dom Perignon.
The power of community and branding is incredibly strong. Every single logo in the graphic above conveys some dimension of status, elegance, and sophistication. It’s no surprise that the group has looked to expand into more lifestyle experiences, purchasing the Belmond Hotel group in 2019, and more recently opening Cheval Blanc, the only five star riverfront hotel in Paris.
A brand is a meme with staying power. They require careful cultivation and the ability to stay a half step ahead of the crowd, but close enough to be desirable and attainable. Dom Perignon produces at least 5 million bottles of champagne a year, yet is still the ne plus ultra of fine champagne, whether you’re in a dance club or Michelin restaurant.
From Butthead to Bulgari, the power of memes cuts across every socio-economic strata. They are a fun way to demonstrate your tribal affectations and provide everything from lifestyle to investing inspiration. Just because they’re vulgar, don’t discount a meme’s ability to attract talent and generate significant power and wealth.