How to Become a Gen Z Millionaire; Non-Consensus Macro

Ram Ahluwalia Lumida Ledger

3 weeks ago

9 MIN READ

Here’s a preview of what we’ll cover this week:

Market: NFP Report; Sell-offs after Earnings; Anti Doom’s Trade; Weak Animal Spirits
Digital Assets: SEC Atkins embraces crypto; Is Jack Dorsey Satoshi Nakamoto?
Lumida Curations: Chinese AI Models Dominate on Cost and Quality; GENIUS Act Sparks Internet Capital Markets; OpenAI stalled AI innovation

This week, I interviewed Ben Forman, a private equity alumnus who transitioned to build ParaFi into one of the leaders in Digital Assets investing.

Ben shared his perspective on:

– Why stablecoins are a big deal

– The impact of stablecoins on credit intermediation

– Winners & Losers: Stripe, Visa, Moelis, Amex, Citigroup, JPMorgan

– RobinHood vs. Coinbase

– Tokenization and the opportunities in the ABS market

– Treasury Companies: Boom or Bust?

Check it out here on Youtube or on Spotify here.

If you are a Gen Z and want to be a millionaire in 10 years, here is what you should do:

Serve others.

In the 1950s, this meant Ray Kroc creating McDonalds.

I remember driving by often and seeing the countless “billions of hamburgers served” under the Golden Arches.

Rah Kroc served others. Not only did he serve his customers, he arguably may have created far more millionaires thru the franchise model.

(At least up until Mag 7 stocks went public!)

Today, there are two big opportunities: Care for the Elderly and Care for the Young.

Care for The Elderly

The annual cost of elderly care is about $140 K / year.

REITs like Welltower have a PE ratio of 94x.

That’s a higher valuation than nearly all Mag 7 companies except Tesla!

And it’s one of many such companies.

You can focus on Assisted Living which, for starters, is easier than Nursing homes.

This is an interesting idea under the “Follow the Boomers” investment thesis.

Care for the Young

Bright Horizons is the daycare facility my kids visit when I have a care gap.

BFAM has a PE ratio of 40x and is growing earnings.

I don’t own either of these businesses (too pricey for my taste), but the point is both of these services are scarce.

There is a lot of vacant commercial real estate space out there.

Many would-be entrepreneurs want to create wealth ‘on their terms’.

That’s a type of ego.

Focus on identifying a market need that you can fill where you have some kind of passion or competitive advantage.

Boring business models are sexy. Look at what Brad Jacobs did with Waste Management (garbage disposal), United Rentals (equipment leasing), and now QXO (building supply materials).

You don’t need an edge in this market. The competitive advantage is “getting up and doing the work” like Ray Krock did a few decades ago.

This is similar.

Focus on the needs of others and you will be rewarded.

Humanoids will not disrupt this business.

Human connection is priceless.

This is why capitalism is the best of all systems.

True (and meaningful) wealth is created by serving others.

We celebrate founders. Check out our curation.

Macro

Non-Farm payrolls spooked markets by clocking in at ~70k significantly short of expectations.

Risk assets declined sharply off the open although rallied near the close (only to sell-off again as Trump re-positioned nuclear subs near Russia).

Last year, to the week, we had the same setup. NFP had a miss. Markets spooked further – against a backdrop of a Yen carry trade unwind as well as elevated valuations.

I had a newsletter addressing this issue:

You can read what we wrote then here.

The main message is No This Is Not a Recession?

So what’s happening?

“Labor Markets Clear”

Put simply, we are seeing negative revisions and a slower pace of job growth due to a slower pace of illegal immigration.

This study noting that 88% of immigrants make up growth in the work force is strong evidence for this thesis.

But there’s more.

Why did we not get a major recession in 2022 despite : (1) a bubble bursting, a (2) collapse in CRE values, and (3) an inverted yield curve with depressed bank lending?

Two reasons: trillions in hold-over stimulus and, crucially, a surge in immigration.

We wrote about this concept in 2023 when everyone was freaking out about recession.

Let’s do some basic math.

Assume you had 8 MM illegal immigrants. (Maybe it is 6 MM or 12 MM – no one knows).

Assume those immigrants have an average wage of $50K. (You can assume some are on government programs – but that’s still income – even if it is not “productive”).

GDP = Labor * Labor Productivity Growth

That gets you to $400 Bn in stimulus.

Now, $50 K is probably too much of an estimate for a day laborer.

But, the employer surplus we are likely understating.

Example.

We are installing wall-mounted TVs in our New Jersey office. The cost is an insane $250 per TV.

It’s about 30 minutes to 1 hour of work at best. The laborer can’t speak English and he isn’t pocketing that.

The small business contractor owner is capturing most of that margin.

So, the $50K may be under-stating the value creation. You could tell a similar story in the home building industry or restaurant sector.

The more workers a restaurant can hire, the most tables they can turn, the more food deliveries they can make.

Illegal immigration was a large stimulus program.

I’m not discounting the negative effects of illegal immigration – fentanyl, crime syndicates, and fractures to a shared concept of American national identity – I’m simply pointing out the facts.

And, yes, the United States does need a legal immigration system that attracts the talent required for the challenges ahead.

(Let’s start by poaching China’s best AI developers for starters. Zuck can write the check…)

What’s the Macro Impact of Low NFP and Lower Immigration

This is really a nothing burger.

Remember, earnings results are strong. That’s the key driver of stock prices.

Also, statistical phenomenon in the “birth death” labor model and summer seasonality may also have contributed to this noisy report.

(We saw the same ‘miss’ last summer and the summer before…_

Earnings Pops then Fades

One of the more notable developments we’ve seen in recent weeks is super strong earnings that have a one-day pop – then they fade.

Table of Examples:

Ticker	Day 1 Stock Price Bump	Day 2 Return	Day 5 Return
CALM	14.3%	-11.2%	-4.5%
GOOGL	0.89%	1.04%	2.78%
META	11.22%	-2.9%	Not Applicable
MSFT	3.89%	-1.7%	Not Applicable
TSM	3.37%	-2.04%	3.37%
NCLH	9.2%	-4.14%	Not Applicable
ANF	6.8%	-0.66%	-1.3%

What’s happening is retail traders are buying at the open market. Then they get stuck holding the back. Then the stock trades down for a week or two.

That’s when you should look to buy…

The Anti-Doom Trade

A Polymarket trader made nearly $1M by betting against disaster.

His trades were simple: don’t panic when the world doesn’t break. This week, despite stable earnings and households, markets are flashing fear signals.

The VIX is up 20%, soft payrolls are spooking investors, but with long-term rates at 4.3%, the data isn’t recessionary. The economy is humming, fear may be mispriced.

Mr. Market Front-Ran the Historically Weak Month of August

Animal Spirits Shall Remain Weak

Last week we shared we were not optimistic about Animal Spirits which have done extraordinarily well.

Coinbase is now below $100 Bn market cap. Robinhood is a tad below the key level of $100.

Circle has corrected. So has CoreWeave. Uranium is softening.

Bitcoin went from $121 K to $113K.

AMD is under pressure.

SoFI has a local top in our view.

We expect a rotation to quality, profitable companies – essentially the opposite of Animal Spirits.

Industries like Insurance – property & casualty. Healthcare. Timing the rotation is tricky.

Notable that healthcare was the best sector this Friday (along with other defensives which were leading).

Bottom line though – the bull market is intact.

Digital Assets

This week, SEC launched Project Crypto, a Commission-wide initiative to modernize securities rules for blockchain infrastructure.

The goal is to make America the ‘crypto capital of the world’.

Chair Paul Atkins said the SEC will “update antiquated agency rules” to enable markets to move “from an off-chain environment to an on-chain one.”

He made clear that existing laws assume intermediaries, but on-chain markets may not need them.

This opens regulatory doors for tokenized securities, real-time settlement, and reduced reliance on intermediaries like Visa and Mastercard – and others in policy.

Tokenization and Internet Capital Markets are a theme we’ve been writing about for years.

See this thread with a collection of our assorted thoughts.

Is Jack Dorsey Satoshi Nakamoto?

Sean Murray has an interesting thesis: Jack Dorsey is Satoshi Nakamoto.

His reasoning:

Jack coded in C and C++, Bitcoin’s core languages, as early as the ’90s.

He subscribed to the cypherpunk list in 1996, cited Adam Back and Hal Finney on his website, and was obsessed with cryptography.

Satoshi’s pseudonym first appeared in a beta Twitter post in 2006 by Jack’s close friend.

The first Bitcoin forum post? Jack’s birthday.

The first transaction? His mom’s birthday.

Jack’s university mascot? The Miners.

Bitcoin’s white paper cited a 1997 ACM research paper. Jack was a part of ACM during the period.

He wore a “Back” cryptography shirt in his yearbook photo.

Jack’s firm Square was the first public company to talk Bitcoin with the SEC.

He now finances core Bitcoin development.

And in 2024, filed a letter saying Block follows “Satoshi’s design.”

It’s speculative. Still, hard to ignore.

Lumida Curations

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GENIUS Act Igniting a New Era

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Alibaba Cloud’s founder ignites debate, claiming OpenAI’s dominance is stifling innovation and that Chinese models like Qwen and Deepseek are already ahead.