"If you own a beautiful building that's newly renovated with all new systems, in an improving area, why would you sell that? You're much better off, levering it up, using the proceeds of the loan, to return some capital to your investors and allowing the rents to rise over time and therefore the value to compound tax free." - Moses Kagan
A lot of real estate deals are designed to quickly flip properties — resulting in a lot of mediocre deals.
But in certain markets, if you buy quality properties, this is the opposite of what you want to do.
Because when you have great assets, don't sell them.
In this episode, we discuss:
- What conditions are right for a permanent-hold mentality
- The advantages of developing smaller properties into apartments
- How to quantitatively evaluate deals in a market like Los Angeles
Check out these resources we mentioned during the podcast:
Mitch Fanning [0:00:46.2]:
Okay, welcome back to Sync or Swim. I'm Mitch Fanning with Rentsync, and joining me today is Moses Kagan, the cofounder of Adaptive Realty, a Los Angeles based real estate private equity firm that focuses on boutique apartment buildings in... You guessed it LA. Moses, how you doing today?
Moses Kagan [0:01:07.0]:
Very well, thank you. Thanks for having me on.
Mitch Fanning [0:01:09.2]:
This is interesting, I'm glad to have you on because initially, I came across you from Twitter, and we'll get into that probably halfway through this conversation, but let's start by just kinda kicking it out by talking about what is Adaptive and why you formed it.
Moses Kagan [0:01:26.7]:
Sure, so Adaptive is a real estate private equity firm based here in Los Angeles. We are, to give you a sense of the size, we're approximately 175 million in asset management, so quite well, we are laser-focused on what we describe as subinstitutional scale, multifamily, so that means projects anywhere between three and 10 million total capitalizations. We have renovated 100 buildings like that over the last 12 years, and currently manage approximately 105 buildings with about 750 apartments.
Mitch Fanning [0:02:04.1]:
So, and this is probably something I was thinking about mentioning earlier, and we'll drill into that what you just kinda mentioned, the thing that was interesting about you and what you're doing is, throughout the whole life cycle, whether it's raising money to even selling, which I know you don't do a lot of... You do things kind of differently or kind of something that's not non conventional will say, so that's kind of starting and drill into what some of the comments you just made by starting off with being a permanent holder, so I know noticed you talk a lot about that. Number one, why and how do you convince your investors to come along for the ride?
Moses Kagan [0:02:48.4]:
Yeah, so maybe let's start out by talking about what the sort of standard in real estate private equity model is, which is buy a building on a bunch of debt, fix it up and then flip it as quickly as you possibly can trying to maximize the IOR. And that's a great model for a lot of people, and it's particularly good for institutional real estate firms that raise money from nontax paying investors like pension funds and endowments, we were with taxpayers, and that means typically high net worth individuals and family offices and those types of investors are highly sensitive to tax, so that's the first thing to say, but the most important thing I think to say Is that Los Angeles is kind of a special market in the sense that it's severely supply constraint, so there's a permanent imbalance between demand to live in Los Angeles, and the number of new apartments that are supplied every year, and for that reason, what we learn after unfortunately selling, selling some renovated buildings is that it really does not make sense if you own a beautiful building that's newly renovated with all new systems in an improving area. Why would you sell that? You're much better off levering it up using the proceeds of the loan to turn some capital to your investors, and then just owning the thing and allowing the rents to rise over time, and therefore the value to compound tax-free.
Mitch Fanning [0:04:15.1]:
No, it totally makes sense. Just to talk about the supply constraint for a second, did LA... Was it... Did it change in terms of an increase of supply based on just covid, did you notice that at all? Or was it typical?
Moses Kagan [0:04:31.0]:
Experience we had during covid, it was more on the demand side to supply for apartments is gonna be based primarily, is based on development. And so the units being delivered during any given year, ones that were planned and permitted and begun years before that, so it's not that we've had more supply during covid, what we've had is less demand, and that's sort of taken two forms, one at the bottom end of the market, so at bottom end the age distribution of mentor demographic, so the like 22, 23yearolds, those people did not come to LA. And the same numbers as they have previously on the ordinary cycle as people graduate college, and some percentage of them who are particularly ambitious and wanna be in in our temp and or tech, or just love the idea of living in LA, come out here. And those people, for obvious reasons, chose not to over the past year or so, so that a prospective tenants out of the younger age range at the upper end of the renter and graphic, so people like... Let's say mid30s to early 40s. A lot of those people end up leaving LA anyway in a normal year because the singlefamily homes are so unaffordable here.
So I think what happened is that people left earlier than they might have, it's like if you're deciding like, Hey, do we stay here for another couple of years or whatever, and continue enjoying the nightlife. And the bars and all that stuff, or do we go move to Austin or whatever else to be able to afford a home.
Mitch Fanning [0:06:08.1]:
I was gonna mention it. Yeah.
Moses Kagan [0:06:10.0]:
Exactly, and so I think with the city upon basically close down over the past year, I think a lot of people said, You know what, we're gonna move now instead of waiting for another year or two like we thought we were going to... So we've kind of lost a demand at the youngest and oldest end of the kind like renter, prime renters ages and we're starting to see that come back, particularly among the youngest tenants, and we're hopeful that that will continue as time is on.
Mitch Fanning [0:06:41.3]:
So I kinda wanna go back to my first question in terms of why you formed it, but also to frame that around maybe the 20082009 period, 'cause I think you have an interesting story around... At least I thought it was very interesting in terms of how you financed your first building and you purchased your first building and so on, and some of the lessons learned. So maybe we'll start with that. Take us back to that first building and your experiences there.
Moses Kagan [0:07:08.6]:
Yeah, I guess I should start by saying that our decision to go into buying and renovating apartment buildings was not the result of some like well considered strategic options strategy meeting. My parents had always owned some small apartments in Upstate New York in 2007 or so, my brother and I were looking to just buy a twounit building, he would live on one side, I would live on the other, and because the market was still crazily inflated, the numbers for those type buildings were just totally insane, it was obvious even to our fairly naive eyes that the numbers didn't make sense, and my brother found a guy who had bought and renovated darkling and run out of money before he could finish it, and so with help from our parents, we purchased that building at a price which was very good relative to the existing market conditions, we could have bought a cheaper six months later if we just waited, but anyway, so that was... We bought that building and that was our introduction to owning buildings in Los Angeles, in that building today, it's right around the corner from here, and it's worth a multiple of what we paid for it.
Mitch Fanning [0:08:27.1]:
Motivated sellers are always the best to deal with, I've heard so.
Moses Kagan [0:08:32.6]:
Yeah, this guy was, he was under water on the building because he was into penalty interest in this construction loans, so in order to make the numbers balance and be able to actually buy the building, we had to lend him $15,000 as a fourth trust deed on his home, and I've told this story a lot, and I always used to joke, Well, we'll never see that $15,000 again, unbelievably, the guy managed not to lose the home during the Great Recession, and about three or four months ago, I got an email from an escrow company being like, please send us the path demand for the $15,000 fourth trust deed on their guy's house. And he admitted he had it been making payments to us and he was in penalty interest to us, but he paid it off. I was actually, it ended up being a great investment for us, over whatever it's been like 12 years or something.
Mitch Fanning [0:09:31.5]:
So this next line of questioning is really geared towards when others are kind of running out of the exits, that old saying, that's the opportunity, and just listening into another podcast that you were on, you made it, obviously, you ramped up, you're investing over that period from 2009 to, I think it was 2012, but you kind of started to ramp it up, and I think there was a quote that you made... You kinda jumped in when others are running away, and so just totally off script, when you look at say, this kind of 2020, another kind of black swan event, if you will, and now obviously it's a different situation, real estate isn't kind of cratering... But how are you guys looking at that in terms of like, do you see opportunities in the market or are you just kind of weathering the storm.
Moses Kagan [0:10:26.5]:
Well, you know, we raised our sixth fund, and we closed it in October of last year, and our thinking was when we bought it, that there were going to be opportunities, so I should say that California, and I guess the whole country, has an eviction moratorium, which means basically that there are a lot of owners who have tenants who are not paying rent, and so we assumed that there would be... Or we suspected that there would be owners who would grow tired of owning buildings, full or tenants not paying rent, and would be willing to sell those buildings for reasonable presents, and so we were very optimistically raised that fund, that there would be all kinds of stuff to buy in real life. That did not happen, and we can talk about why that is and the tenants probably paid at a higher rate than maybe some people were expecting, owners probably had maybe more financial cushion it, less leverage that maybe we thought, and also, thanks for willing to former on mortgages to a large extent, so that weave of opportunity never really appeared and extraordinarily unusually for us, we have not bought a single building with that fund, and again, we've had it active and ready to go since October, now we have luckily been able to buy some other buildings using different vehicles that have different return expectations, so we've been fairly active, but not with that fund again because the opportunities have been so scarce.
Mitch Fanning [0:12:04.4]:
No, it totally makes sense. Now, that's a good segue into the buying part of the conversation, you guys are known to look for neighborhoods in transition, quote on quote, so let's start with the reason why that is, and how do you even go about selecting the property.
Moses Kagan [0:12:27.7]:
Yeah, so I mean I guess the first thing to say is that we're very quantitative in the way that we think about evaluating deals, we are focused almost entirely on unleveraged yield on cost. And that's a very, very simple equation. It's just in the numerator, so the top half of the equation, it is forecast annual rents after stabilization minus forecast annual operating expenses, effectively NOI and operating come at the top and then just divided by, and the denominator, the cost of viability and cost to renovate it the cost to hold it during the time that we're renovating, and then of course, our fees, so it's basically what is the annual NOI once the building stabilizes divided by what is the total cost of the project, and then we're... Depending on the vehicle for which we're putting out money, we'll have a target for what the equation needs to be for a fund, which we haven't been able to deploy, we need the unlevered and cost to be like north of six right now for opportunities on stuff and some other stuff that we're doing, it can be a little lower, but that's how we think about this, so you asked why are we interested in improving neighborhoods is, well, the answer is that there are only two real numbers that change in that equation so that the cost of renovating a building.
It doesn't matter if we're doing renovations in the most expensive neighborhood in LA or the cheapest neighborhood in LA, the renovation cost is the same and the fees are the same, and the cost to run a building doesn't change, it doesn't matter if you're running a building in a fancy neighborhood or reported like, You're gonna fix everything that breaks, you're gonna maintain the building, you're gonna clean it, you're gonna have a gardener there, so you're gonna insure it, so all of that stuff is basically the same, so the variables that matter are... What is the purchase price for the building and what are the rents that you can forecast upon completion of the project? That's pretty much it. And so our job is to constantly be looking at properties that are on the market and running that equation and try to find the ones that work, and so... Why look for approving neighborhoods well and in improving neighborhoods, you can sometimes it used to be frequently, now it's much less frequently, but you can sometimes find buildings that are priced that are mispriced relative to the rent that you can get upon stabilization, in other words, basically that the investors who are trying to buy real estate have not realized how good the neighborhood is, how high the rents can be once you're done renovating. Our job is just to stay abreast of those trends, look at where people wanna live, and so be skate to where the puck is going to use... To use that, it may be a Canadian metaphor.
Mitch Fanning [0:15:15.4]:
Do you think when it comes to the renters and maybe even in your areas, do you think they're looking for that boutique experience as well, almost versus the different types, like the different type of class As.
Moses Kagan [0:15:29.2]:
Yeah, we have and that's a good point. And maybe we should talk about that a little bit. Our buildings are very unusual, the finishes look class A feel class A, we use hardwood floors, we use... The design is really cool and modern, and it's a little generic so that it doesn't age, but it feels very clean and highend, what separates our buildings from class A is that because they're much smaller, we're talking about building with like 6 units, 12 units, 20 units. We don't have the kind of amenities that are in a standard large class A building, we don't have gyms and for the most part, we don't have pools and that kind of thing. What we do have though, because they're a small building and a couple of advantages and I think are not widely appreciated in real estate, one is, and this really came to the fore during covid. In these small buildings, almost never have shared entries and hallways. Okay, so almost all of the units in our entire portfolio have their own front door, and there are a couple of good things about that. So from the tenants perspective, it's nice. They feel like it's a private thing, they're going to their own front door, they don't have any shared interior space.
That's actually nice from the security perspective too, they don't have to be worried about who else is in that hallway or anything like that, it's also very good from an efficiency perspective, both for CAPEX, OPEX for us, because we don't have to renovate and clean and maintain a bunch of space that does not generate rent, so you probably have heard people talk about the difference between the square footage of the building and the rentable square footage of the building for us all the square footage is rentable, pretty much every single square foot of that building is gonna be generating rent for us. So that's one nice thing that are building... The other thing, and I think this is really not widely appreciated, it probably should be, is that when you build big buildings, the nature of geometry means that you are going to have light usually only on one side of an apartment, so if you picture a normal class being class A apartment building with a hallway running down a floor and you got apartments on either side of it. Okay, with the exception of corner units, all of those interior units, the ones along the hallway are only gonna have windows going out in one direction, they obviously don't have windows going back towards the hallway and they don't have windows going into each other's apartments, so it's just light from one side, and that dictates certain things about how the apartments are designed, but it also it's just like worse. It's just natural light is among the most important things that you can have in your house, and so when you do small buildings, your apartments are gonna just by nature, you end up all corner units effectively, or sometimes you got a lot of units with light on four sides. So what that does, again, it's not something people talk about a lot, but one, it improves the regardless of how the apartment laid out, more light, better, but also because of the nature of apartment design, you basically need to have windows in each bedroom, that's a requirement of the fire code, by having light, smaller buildings means light on more sides, which means more flexibility in terms of how you lay the apartments out, you can have... Because you're not hamstrung by only having light on one side, so if you think of a standard class A apartment, what you'll find is like a one bedroom, there's only light on one side, so they have to use part of that... One of the windows have to be it for a bedroom, and the other one has to be for a living dining room, and that's it, there's no... And you can't do anything else because all of that space that's away from the window just has to be part of the living dining, once you get light at another side, it opens up all kinds of other ways to do play Tetris with the units. And that turns out to allow for much more efficient layouts anyways, so there's some major advantages to doing these smaller buildings.
Mitch Fanning [0:19:40.5]:
Yeah, when I looked on your website, your units are beautiful, if I was living in LA and I was renting, I definitely would be checking out your places.
Moses Kagan [0:19:51.8]:
Well, that's, I should say, there's an intentional thing going on there, obviously, we wanna make a nice apartments, but you need to go several steps past that, in other words, if you wanna generate premium rents, it's not just about the apartment, it's about how the apartment is presented and so there's kind of like a chain of things that you need to get right, from how the apartment looks in real life to how it's staged, to how it's photographed, to how those photographs are used in ads and what the copy and those ads look like to who, the leasing person is that the tenants interact with when they reach out when they see that ad and become interested in the apartment, and then obviously the whole experience of signing a lease, so how the apartment looks, like the finishes and the layout and everything is important, but it's getting that whole chain of things correct and having them all hang together in like a coherant way that allows you to generate premium rents.
Mitch Fanning [0:21:06.2]:
So again, coming back to the similar question in your experience, how has that changed that whole... That life cycle experience changed, given covid, what have you guys done differently or have you seen...
Moses Kagan [0:21:22.7]:
Yeah, so a couple of things to say about that. We have done some digital staging, which we had not done previously like we've... Historically, we've done pretty highend staging and it's pretty expensive and logistically painful to do that, so we... During covid, we have experimented with digital staging. I'm reasonably happy with the results, I think there's a lot of room for improvement, it's certainly not as good as physical, it's getting better. We have also implemented because you wanna stay away from giving inperson tours to the extent possible during covid, we have implemented those threedimensional tours, I'm blanking on, yeah, the Matterport Tours, and we've also been doing a lot of having a leasing agents do like iPhone video walkthroughs, move, recorded, but also sort of custom, they'll get a perspective tenant on the a FaceTime call basically, and just walk through the unit and show them the... Show them the layout. So some companies have so moved to totally impersonal, I would call it leasing, where it's all sort of self-serve and you just go to see the apartment without a leasing agent. I believe that highend apartments are sold, I believe that there is an element of salesmanship there, and so we have not wanted to fully remove leasing agents from the equation, so what we're doing is trying as much as possible giving as much additional information as we can in the ADS, but ultimately still funneling people to in-person showings.
Mitch Fanning [0:22:57.2]:
No, it totally makes sense. I wanna go back to the conversation we had around unlevered yield. So my question was, are you looking at unlevered yield as a result of wanting to have some margin of safety also, are you looking at it because you guys are doing a refinancing model or am I kind of out to lunch here?
Moses Kagan [0:23:19.8]:
No, no, the reason is as follows, it is relatively easy to make mediocre deals look tasty by doing two things, one is throwing a lot of leverage on there, and two is building out like longterm forecasts that show rent growth and ultimately an exit at some exciting price, basically, you can take almost any deal, and if you put 75% LTV leverage on their cheap enough interest rate and you show rents growing up to 2.5 or 3% a year and expenses growing at 2% a year or whatever, and exiting at the same cap rate that you bought it like, almost any deal looks good. And so we have some major problems with doing that, like... So first of all, separately from what it looks like, I just don't wanna do mediocre deals, so I wanna make sure that we are adding value what I mean, by adding value, it's very simple, it's like, if you can buy a four cap in the market, a 4% on my renewal, I can just walk in and buy a four cap, right. If I'm going to go through all this brain damage of this massive renovation and was pain and all that stuff, to generate like a four and a half like what's the point? Why would I do that? Right, so the first thing to say is, I want like... I want there to be a significant increase in value, I want it to be clear that I am actually adding value, and I think... And by looking at things on an unlevered basis, you kind of like get at the heart of that, it's easy to tell when you're adding value, when you're not, so that's the first thing, the other thing to say, is that we do not use for the purposes of talking to investors about potentially capitalizing these deals, like we are not in the business of giving forward projections, either about rent growth or expense growth, and certainly not about exits. First of all, we're not gonna sell these things were effectively permanent holders, so that's off the table right away, but it's like I regard, presenting people with for longterm forecasts for real estate is really intellectually dishonest, you can't think of all the people who bought stuff in 2019 on the basis of 3% per year annual rent increases in Los Angeles, and then covid hit and the rents went down by 10, 20% depending on the neighborhood, and it's not, obviously, covid is a black swan, or have you think about it, but it's not like we... Covid particularly is... It's a oneoff thing, but there are always an unexpected thing, sometimes rents grow much faster than 3%, sometimes they come down, and I do not, because I cannot with any certainty predict those, the direction of velocity of rent increases. I do not think that investors should use those predictions for evaluating deals, so what we say to people is basically, Look, here's what we think the rents are gonna be when we're done with this project, and that's based on our existing portfolio, so what are we getting right now, for rents for similar units in our existing buildings, okay, that's how we're gonna forecast the rents upon completion. What's gonna happen after that? I don't know, things have worked out well for people who own apartment buildings in Los Angeles over the last 75 years, or are the numbers... So as long as you don't over lever and have to sell when you have one of these black swan events. So what we say is, look, like get comfortable or don't with the unlevered that we're offering here, and we're gonna keep the leverage pretty moderate, we're gonna refinance after we're done, but we're gonna keep the leverage pretty moderate, and then we are gonna just trust that in a supplyconstrained market, if you do a good job managing the building, you're gonna be happy about what happens over the long term, but as to what's gonna happen in any particular year or couple of years, how the hell should I know?
Mitch Fanning [0:27:26.1]:
No, it totally makes sense. I appreciate that. Running me through that, let's talk about marketing and leasing a little bit, and really, I think the tweet that I brought you into my attention, obviously, we agree, but we are seeing it even some of the larger ones, the people inside of those organizations or operations are getting those skill sets, which they didn't have, to your point, they didn't have maybe three to five years ago now, all of a sudden when you're asking a leasing agent to actually use a camera and do essentially a video tour, or understand video, it's... In a way, it's a different skill set that they had to know maybe five years ago...
Moses Kagan [0:28:14.2]:
Definitely, and if you layer that on top of writing copy for ads and figuring out where those ads should go and tracking where the leads are coming from and all of that stuff, I mean, it becomes a lot... And we're fortunate to have... So we've centralized a lot of that, in other words, we write the copy centrally, we dictate for the most part what pictures are used, but we're fortunate to have a leasing team comprised of very entrepreneurial, smart, personable people, and they get paid well for what is effectively like a part-time job, and that's worked out really well for us, and it's one of the sources of our competitive advantage, I'm quite confident, but there's... Fundamentally, salespeople, they're not marketers. And there's a distinction, obviously, marketers are in charge of bringing in leads and salespeople are in terms of closing them, and we try to do our best to help our salespeople bring in the leads, but that's not fundamentally a marketing person, that's a salesperson. Now, very large owners have had marketing, serious marketing departments for a long time, I remember it must have been seven years ago or something, meeting a guy who works in marketing at Douglas Emmett, which is a very large investment that owns a lot of apartments on the west side of LA and in Hawaii and they've had a very sophisticated marketing department for a long time, so I don't mean to say that that doesn't exist. I think basically, the larger the owner and the larger the manager and company, the more likely they are to have that sort of capacity. But it's just at a small, mediumsized property management company, you just don't have the budget or expertise or career path or whatever to grow internal departments of that type.
Mitch Fanning [0:29:57.5]:
So as we come to a close, and before we get to the quick-fire round, there's one question that basically ties into, I think really the first question in terms of your philosophy, but I wanna touch upon it in 2012, you decided to liquidate your portfolio at the time, and that in a way, taught you some lessons in terms of why you wanted to do it this way, maybe speak to that a little bit before we kinda cap off and get to the fun questions.
Moses Kagan [0:30:27.5]:
Well, so I should say that it was all of our deals, almost all of our deals up to that point had been funded by a good friend of mine from high school, and in 2012, he decided that he wanted to liquidate the portfolio because he was our sole equity provider, he had that, right, and so we sold the first... We own the first deal we ever did, but the subsequent 11 or 12 deals were all one, had capitalized, so we ended up selling all of those between 2011 and 2012, and we made some money or whatever, but certainly, it wasn't lifechanging, and we had several of the buyers of those properties hired us to continue managing them postsale, so we had the unpleasant experience of watching over over the subsequent years as the rents continued to rise and an operating expense stayed would all totally love because these were brand newly renovated apartment buildings and so that was really what other causes, I guess, or the way we think, the current hold mentality that we have, which is just when you have great assets, don't sell them.
Mitch Fanning [0:31:33.3]:
Yeah, it's more and more. I think it's... I personally think it's definitely the right strategy regardless of the asset that you're interested in owning.
Moses Kagan [0:31:44.1]:
Yeah, I would say that I wanna be careful to say that this sort of a strategy, I would not recommend it in markets where it is easy to add supply, so there are certain markets that are sort of more like trading markets where you get in and then you get out because you're worried that on the next top cycle, developers are gonna swamp the market with new supply, Los Angeles and a few other cities make it so hard for developers, and there's so much late and demand for those apartments that you kind of did... There's maybe to bring us full circle in the conversation, there's more of a permanent imbalance between supply and demand, and it is in those sorts of markets where I think that holding permanently makes a lot of sense.
Mitch Fanning [0:32:30.3]:
Good point, and thank you for clarifying that one. Alright, so let's kick off the quick-fire round, so basically, I'll ask you a question and you'll have less than 60 seconds to answer... Moses, are you ready? Alright, what's one thing you wish your phone could do?
Moses Kagan [0:32:49.6]:
One thing I wish my phone could do, yeah, get my oldest children to pick up when I call them.
Mitch Fanning [0:32:56.9]:
Okay, alright, good one. What's the most misunderstood thing about you or Adaptive?
Moses Kagan [0:33:03.7]:
Oh, that's a good one. I think... And this is partially, I guess, 'cause it's the following that I built on Twitter, I think very often I get questions from people asking me like what they should do, whether they think some retail deal in Alabama makes sense, or what they should do about leasing their office building in Des Moines or whatever. And what has allowed us to be successful is a very narrow circle of competence, we know we are real experts in subinstitutional scale in Los Angeles, apartment buildings, and I have some thoughts on other asset classes or whatever, but I am known by no means an expert in them and no one should expect me to be one.
Mitch Fanning [0:33:43.8]:
Alright, next question. What do you believe that others might disbelieve...
Moses Kagan [0:33:48.7]:
I think as I said before, I think the standard practice and real estate private equity is basically to buy mediocre assets and mediocre markets, lipstick them and use as much debt as possible, and try to flip them quickly, and that's just... That's worked out really well for a lot of people. I don't wanna proportionately, well, but that's for various reasons, not what we're gonna do, and so we're just gonna keep plugging along, buying good stuff and really high quality, high barrier, entry markets, doing really high-quality renovations keeping the leverage reasonable and owning them permanently.
Mitch Fanning [0:34:27.1]:
Last one is, what have you changed your mind about lately?
Moses Kagan [0:34:30.9]:
This is a funny time to be talking about it, 'cause cryptocurrencies are down enormously today, but for a very long time, I had sort of just literally word everything about Crypto, I just have found the whole thing to be like a gigantic scam or like... Maybe if not a scam and no speculative and just like, I'm kind of a value investor type framework and everyone can make fun of me about that, but that's just how I think about the world, I just couldn't understand. And didn't care to understand crypto, but I have recently become convinced of its value in certain circumstances, primarily in developing countries where property rights are not protected and where currencies are prone to massive devaluations, again, like today's declines and Bitcoin everything, obviously, shake that fate a little bit but I've read enough about people in desperate situations needing to run away from where they live and go somewhere else to try to save their families, and how hard it is for people in those situations to bring with them any of the wealth that they have accumulated. And the solutions that people have come up with, or, I don't know, converting wealth to diamonds and hiding them and their underpants or whatever, or burying jewelry and hoping to come back and get it some other time. And so I've become convinced recently that crypto does have some significant benefits for people in those circumstances, and so while it's never gonna be a big part of my life. I guess I'm kinda glad it exists.
Mitch Fanning [0:36:15.8]:
I agree with those use cases that you've identified for sure. So where can people find out more about you on the interwebs?
Moses Kagan [0:36:23.0]:
Yeah, so I think the best place to find me is probably on Twitter, it's just @MosesKagan, I'm also... I wrote a blog for six years or something, every day, I haven't written not in a long time, but I do have a mailing list on there, so if you go to kagansblogs.com, and which is the first thing that you'll see when you search for me, you can read all about the history of us getting into the business, I think I started writing it in 2011 or something like that, so it's a really charts or progress as a company, so I suggest people check that out.
Mitch Fanning [0:36:53.4]:
Alright, we'll put that in the show notes. Alright. Well, that's it for another episode. Moses, thank you so much for doing this. Until next time, keep swimming.
Moses Kagan [0:37:02.9]: