Is the spring of blockchain the death of value investing?

This article is from the public account GPLP Family, author: XL

67-year-old David Swensen has passed away; he was the patriarch of asset allocation. Last year, VC godfather Don Valentine also passed away. It turns out that these investment models have existed for over 40 years.

Years from now, if the now 91-year-old Buffett were to live on, would people sigh about how old value investing is and that it should come down from its pedestal?

This was a conversation I had with my husband during dinner. No offense intended to the greats, but some recent explorations in the blockchain field have given me a magnifying glass, making me realize that profound changes are happening in the world, and investment, as a probe of world change, cannot rely on past paths.

A month ago, when various blockchain groups started flooding with "doge to the moon" memes, most group members just laughed it off. As far as I know, those who dared to heavily invest in Dogecoin were mostly newcomers to the crypto space, as the veterans held a "value" belief in Bitcoin, Ethereum, and others, looking down on "pumping a joke coin."

Today, as Dogecoin's market cap was about to hit $100 billion, "Shiba Inu" (also known as shitcoin) has already surged to the hot search lists on Douyin and Weibo, seemingly eager to take its place. There are even people starting to sing about "three dogs."

Bitcoin has doubled in value since the beginning of the year, Dogecoin has increased 80 times, and Shiba Inu has surged 200 times in the past month. It's no wonder that voices in the crypto space lament, "Value investing has ruined my youth."

Traditional investors criticize the crypto space for having "no fundamentals" and "no actual value." Crypto veterans mock newcomers for "blindly following trends" and not understanding "blockchain value investing." This layered disdain and disruption constantly point to one question: what exactly is value investing?

By definition, investing at a price below intrinsic value is value investing. So what is intrinsic value?

The internet has taught us that user attention is valuable and can ultimately be converted into huge cash flows in a DCF model. GME, Dogecoin, and others further teach us that the power of community is strong. Especially when the internet has leveled the information playing field for individuals, it is inevitable that retail investors band together to fight against entrenched interest groups as a form of class struggle.

The redundant backup design of blockchain determines that it maintains fairness at the cost of efficiency. And this is precisely what society needs today, as the pendulum of society has swung to the extreme of efficiency driven by capital. As long as we pull it back a little towards fairness, that is value.

To be more specific, the value of Bitcoin lies in the option it gives us to escape the Federal Reserve's excessive money printing, as algorithms and code cannot be manipulated by the elite class like the U.S. government; the value of DeFi lies in providing a decentralized trust mechanism that allows you to enjoy equal financial power regardless of your identity or wealth, without enduring the inefficiencies and conflict-ridden service models of traditional banks and brokers.

The essence of value investing is not to pursue low PE ratios but to seek out mispricings of value that are unsustainable. And value is not measured by narrow numbers on a balance sheet.

Blackstone raised $100 billion last year. This $100 billion will be used to buy some buildings and companies, creating additional profits for the capital's entrenched beneficiaries. But what if this $100 billion were given to retail investors to buy coins? It would be equivalent to directly helping ordinary people make money, directly putting cash into individuals' pockets, decentralizing and eliminating intermediaries, thus bypassing layers of rent-seeking. The latter would boost total social demand far more than the former. This is the true value.

There was originally no path in this world; when many people walk it, it becomes a path.

There was originally no value investing; when others look closely, and you look far, that is value investing.