![]() ![]() Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. ![]() To hear more from Alden, including how the network effect applies to Bitcoin and where to look for undervalued stocks, listen to the full episode on Opto Sessions.ĭisclaimer Past performance is not a reliable indicator of future results.ĬMC Markets is an execution-only service provider. “We’ve seen over the past decade, in particular, that the emergence of network effects has been arguably the most powerful mode around.” That applies to exchanges around the world and to credit card companies, where merchants only accept popular ones and users only use cards that are accepted by merchants” “It’s just really hard to get that flywheel started. That applies to exchanges around the world and to credit card companies, where merchants only accept popular ones and users only use cards that are accepted by merchants,” Alden says. It’s just really hard to get that flywheel started. “, you have trouble building a user base because there are no users there. Even with a better interface or privacy improvements, it would still be hard to draw away. It just sucks everyone into that platform, it really hard to start up as a competitor.”Īlden points to Facebook as an example, which has reached critical mass “to the extent it just became the de facto social network”.Īs such, she says, it’s become almost impossible to create a better version of the business. “Therefore, it becomes like a sucking force. One of the most powerful ones happens to be a network effect, which is a phenomenon where the more people use it, the more valuable it gets per user” “You can have a strong brand, economies of scale, unique assets - things like that. One of the most powerful ones happens to be a network effect, which is a phenomenon where the more people use it, the more valuable it gets per user,” she explains. It is the companies with an edge that prevents that - those that avoid success being replicated and displaced - that investors like Buffett look for. “If a company finds an opportunity to have really good returns on invested capital, it’s natural that other companies will want to come in and … take some of those returns.”Īlden explained that this increases competition and drives down the average return of capital for the industry. This was a topic popularised by Warren Buffett,” Alden tells Opto Sessions. “Companies have economic moats, or at least really high-quality companies. In this episode of Opto Sessions, however, the discussion turned to an intriguing theory that has come into play a lot in recent months - the network effect. Throughout Alden’s career, she has contributed to Business Insider, MarketWatch, CNBC, The Street and Time’s Money Magazine, with her particular area of focus being on the intersection between engineering and finance. Her research methods have received global renown and helped her amass more than 165,000 followers on Twitter. ![]() We covered their outlook for the US dollar, fiat currencies in general, central bank policy next steps, the promise of digital currency alternatives - and ended with each speaker providing their top book recommendations for those interested in fully understanding the world of money.Lyn Alden is the founder of Lyn Alden Investment Strategy, through which she has been providing research, both publicly and privately, since 2016. It was a killer line-up for a very important topic. And this year we had the pleasure of welcoming Lyn Alden to the group. And, while the talent is elite, it has become a gathering of friendly peers who – with goodwill and respect – reunite to peel away as much of the fog obscuring the road ahead as they can, giving us a clearer view of where our currency & money is headed.Īs usual Danielle DiMartino Booth, Jim Rickards and Russ Gray were there. I’ve moderated this panel for several years running. Early this month, I was invited to host a panel discussion on “ The Future of Money ” at the New Orleans Investment Conference, which has a well-earned reputation for attracting the world’s foremost authorities on geopolitics, economics and investments. ![]()
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