10 rules from the inventor of the index fund • CEO Letter #48

Taylor Culbertson -

Dear Hedgeprickles, Ladyhogs, and Inbetweenies, this is Taylor, the CEO of Hedgehog. Every week you wonder, can he still get sillier? I wonder too.

Hedgehog is the crypto homebase that keeps your portfolio in tip-top shape according to your wishes. We’re trying to be your genie in a bottle, except without any weird ancient curses. Instead, Hedgehog offers a modern interface for timeless investing needs adapted to the blazing fast future of crypto. Far superior to an ancient curse, I think!

Reminder, there’s a giveaway at the end of every newsletter! One lucky reader wins a Ledger Nano S hardware wallet. I made the question super easy this week 💗

Next week is my Consensus 2022 panel, "Digital Asset Investment Outlooks in a Turbulent Market":

Consensus 2022
The 2022 Consensus festival is a showcase and celebration of all that crypto has to offer. Thousands of the world’s brightest minds and impactful voices will take over Austin, Texas, June 9-12 – and expect to see events and parties in the days before and after! This is the only festival cov…
Consensus 2022
Spiffy, right?

I'll be talking with Liz Young (Head of Investment Strategy at SoFi), Jeff Dorman (Chief Investment Officer at Arca), and David Duong (Head of Institutional Research at Coinbase).

In between ranting about memecoins, I quickly mentioned Lipsa’s Hedgeblog article about dollar-cost averaging. It deserves more than such brief attention! Lipsa wrote:

DCA is a great way to reduce the risk of buying at a loss when prices are high or selling at a loss when markets crash. If you don't have a lot of money to invest, crypto dollar-cost averaging allows you to slowly but surely build your investment over time. What's more, this investment strategy removes much of the emotionally taxing and detailed work of timing the market for a perfect entry position.

Read on for way more info all about how DCA strategy works for crypto.

Lipsa also wrote about the purpose of rebalancing your crypto portfolio — rebalancing is another essential topic. We’re trying to cover more foundational investment principles on the Hedgeblog 👍

Tldr: In the future, DCA’ing will be SCA’ing. Satoshi Cost Averaging baby! WOOO!

Speaking of foundational investment principles… Hedgehog product manager Colin recommended that I share John C. Bogle’s “Ten Simple Rules for Investors and a Warning for Speculators.” Fair warning, this is a hefty PDF, but here’s the link!

To refresh your memory, John C. Bogle founded the investment firm Vanguard. He created and popularized index investing, sparking a revolution in methods for retail investors.

“I wish I could assure you that the investment strategy outlined below is the best strategy ever devised,” Bogle wrote regarding his list of ten simple rules. “Alas, I can’t promise that. But I can assure you that the number of strategies that are worse is infinite.”

THE LIST:

  • Remember Reversion to the Mean
  • Time Is Your Friend, Impulse Is Your Enemy
  • Buy Right and Hold Tight
  • Have Realistic Expectations: The Bagel and the Doughnut
  • Forget the Needle, Buy the Haystack
  • Minimize the Croupier’s Take
  • There’s No Escaping Risk
  • Beware of Fighting the Last War
  • The Hedgehog Bests the Fox
  • Stay the Course!

Oh, and the hedgehog beats the fox, eh? “In the field of investment management, foxes come and go, but hedgehogs are forever.” Glad to hear it — I’ll take that to heart, and I hope you do too 😉

Seriously though, Bogle was an astute thinker, and his insights hold true today. Especially the thing about Hedgehog forever, delighted to learn he was a fan! Despite the time travel involved.

Tldr: If you were also wondering, “croupier” means “the person in charge of a gaming table, gathering in and paying out money or tokens.” Vocab word of the day! For the bagel and doughnut thing you’ll have to read the PDF.

Quick hits:

You can now buy Chiptole with Bitcoin.
Tldr: Sweet.

Gemini is preparing for crypto winter.
Tldr: Ugh.

FTX now has more bitcoin trading volume than Coinbase.
Tldr: Neat.

The failure of TerraUsd might “mark the end of algorithmic stable coins.”
Tldr: “Uhhuh, sure it will” — developers

That gave you plenty to chew on, I hope. Giveaway question of the week: What’s your favorite spring or summer treat? I will also simply accept ice cream flavors. Reply to this email with your answer and you’ll be entered to win a Ledger Nano S hardware wallet.

Watermelon at a picnic on a hot day by the lake,
— Taylor

To get future newsletters delivered straight to your inbox every week, sign up here!