🦄 vol. 25
matt and karl chat about retail investing and rhino poaching
retail joins the party 🥳
The pandemic ushered in a whole heap of new (somewhat short-lived) hobbies: some huddled around puzzles, others brewed their own craft beers or baked bread, and most, if not all of us, binge-watched Tiger King 🐅.
New kids on the block ⛹️
While I’m not one to dunk on baking or binge watching, there is a far more interesting and impactful trend that emerged: retail investing.
Here are some cherry picked 🍒 stats :
1️⃣ 5️⃣ Approximately 15% of the current retail investors only started trading in the months that followed the pandemic.
🔝 Covid’s arrival saw daily trading activity spike, rising from around $18 billion per day to around $32 billion per day in the few months that followed — double the levels seen pre-pandemic, and they still remain well above the previous watermark.
🎰 Retail investors now account for almost as much volume on the US stock market as mutual and hedge funds combined.
Market movers 🚚 and meme stocks 🤡
The concept of collective capital is really interesting, in that as democratisation of trading occurs, retail investors can increasingly pool capital through social channels (see Reddit, Discord, Twitter) and move markets, competing with institutional incumbents. We saw that with GameStop and AMC, where hordes of amateur retail investors coordinated the purchase of stocks, with the Reddit subgroup r/wallstreetbets serving as the poster boy.
GameStop’s 🎮 share price rose by approximately 1,900% in the month that retail investors piled in.
AMC Entertainment’s 🎬 shares rose by nearly 2,900% in a similar story.
What goes up... 🆙
Sadly (for some) came crashing back down to Earth; so much so that their stock charts almost resemble the GoogleTrends graphics of the transient trends of the pandemic. But the stories of those that were left holding the bag in the GameStop and AMC rollercoaster rides were not isolated, nor were they one-off events.
Data from Robinhood shows that the “hot” stocks bought by users underperform by close to 10% in the month that follows.
Publicly available data reveals eToro users that engage in day-trading typically lose close to 80% of their money.
Approximately 70% of those that engage in foreign exchange (forex) trading lose money every financial quarter, and, more worryingly, 100% of a retail customers' investment is lost in less than 12 months.
And so? 🤓
Greater inclusion in financial markets has always been viewed as net positive but that doesn’t mean we shouldn’t slap a warning label on it. Proceed with caution.
bundu bashing 🦏
Like Matt said, the pandemic had the world watching Tiger King, and in true Netflix fashion, exposed us to animal cruelty in an up-close and personal manner. But what it also did for a lot of people was expose them to exotic animals… animals that we have in our backyards!
SA is home to more than 20 national parks and game reserves, with over 500 game lodges focused on providing land for our animals to roam freely. The country's public parks are run by South African National (SAN) Parks, who have a portfolio of 20 diverse parks and conservation areas in 7 of our 9 provinces. Some of our biggest and most notable big 5 (🦁🐆🐘🦏🐃) parks include:
Kruger National Park 🥇
The largest and oldest game reserve in South Africa, bordering both Mozambique and Zimbabwe.
Total area: ~19 500 km²
Pilanesberg National Park 🌋
The name translates to ‘Place of the Rock’, and was an ancient alkaline volcano that erupted 1,200 million years ago.
Total area: ~570 km²
Madikwe Game Reserve 💎
The fifth largest game reserve, bordering Botswana.
Total area: ~680 km²
This land is crucial for our ecological system. The biodiversity that these game reserves offer keeps our ecosystems in balance and offers a safe space for our animals and indigenous plants to flourish. Of course, it also bolsters our economy with travel & tourism providing R363,2 billion to GDP in 2019 and R182,5 billion in 2020 (a ~50% drop 😢). This was 6.9% and 3.7% of total GDP respectively, according to the World Travel and Tourism Council (which factored in direct and indirect contributions).
Looking at the below infographic, we observe the following:
More than 90% of the continent's rhino poaching in 2020 occured in SA.
In 2020, as borders closed, the number of rhinos poached in Africa decreased by over 30%.
In 2021, the number of rhinos poached in SA surpassed the number from the year prior. However, the majority of this happened on private farms after an uptick in anti-poaching units in the SAN Parks.
And while the total number of rhinos poached has come down from the scary highs of 2015, a lot more work still needs to be done.
Interestingly, one kg of rhino horn goes for as much as $65 000 on the black market! It’s generally used for jewellery, crockery, as well as to (controversially) treat cancer, arthritis and replace the renowned blue pill. On average, the African white rhino’s heavier frontal horn weighs around 4 kg. Matchbox calculations would suggest that from last year’s 451 poached rhinos, their horns had a value of almost $117 million on the black market. 🤯
Where’s the 🦄?
Honing in on the Kruger as a use-case, which is roughly the same size as Israel, slightly larger than Swaziland and, for our favourite Googler, about a third of Ireland - it’s safe to say it’s big. And while the sheer size has been to the advantage of poachers in the past, there is some cool tech that could make life much easier for anti-poaching units:
CAKE 🍰 🏍
The Swedish startup recently introduced Kalk AP (anti-poaching), their solar powered motorbike for African game reserves.
It’s quiet, omitting almost no sound and therefore doesn’t alert poachers or disturb the wildlife’s habitat. The bikes have their own solar panel and power station kit so they can operate in the bush independent from an electric power grid.
Cake is in partnership with the Southern African Wildlife College (SAWC) on the project. Two bikes have been deployed to rangers in the Kruger National Park and are being monitored remotely by Cake. The company has a “buy-one-give-one” charity campaign that funds the initiative.
There are a few players in this space (i.e. Air Shepard).
The drones require a command centre, where they’re launched from and monitored as the drone goes on its predetermined flight path. The manned command centre stays in contact with anti-poaching units on the ground should they detect poachers.
Using infrared or thermal imagery with electric battery packs, the drones can fly for 5-10 hours and have ranges of 50-100km from the command centre (depending on the model).
Think of a hypothetical ecosystem that utilises the above two technologies: The ability to deploy personnel to the right area at the right time, preventing harm to our animals. In the worst case scenario, when personnel are too late, the teams have footage of the poaching incident which would be admissible in court.
Jobs could be redirected to different areas along the value chain with a focus on upskilling current employees and embracing tech to save our wildlife. It’s a step in the right direction, in support of our animals.
sash enjoyed this analysis of app annie’s “state of mobile 2022″ report
karl was shocked by ‘bonnie & clyde’s’ blatant attempt to launder $4.5 billion worth of bitcoin from the 2016 bitfinex hack