Compound Collaboration, Month #15
Every month I put aside some money into a portfolio aimed at long-term bets over the next 20 years. I will be gifting this portfolio to my future kids someday. I hope to use these memos as an educational tool to teach them about the world. With any luck, managing the portfolio will become a shared activity to collaborate on as they grow up.

It is one of the main reasons why I invest.
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Performance from the first 14 months:

‌‌Month #1 Aug 2020: $ARKK +45%
Month #2 Sep 2020: $ARKG +21%
Month #3 Oct 2020: $BTC.X +407%
Month #4 Nov 2020: $BTC.X +222%
Month #5 Dec 2020: $NVDA +91%
Month #6 Jan 2021: $VT +16%
Month #7 Feb 2021: $PACB -13%
Month #8 Mar 2021: $TSM +3%
Month #9 Apr 2021: $KLIC +11%
Month #10 May 2021: $TTD 7%
Month #11 Jun 2021: $ETH.X +100%
Month #12 Jul 2021: $ETH.X +86%
Month #13 Aug 2021: $ROKU -17%
Month #14 Sept 2021: $ETH.X +44%

Total portfolio return: 86%

This month's addition: Roblox $RBLX

Roblox is a video game company that is enabling developers to create games and get paid for doing so. Rather than trying to build everything themselves, they are creating tools so that others can build whatever games they want, and then help them distribute and monetize their games.

Some impressive stats, courtesy of @sidnistandard (you should follow her):

  • More than two-thirds of U.S. kids aged 9 to 12 play Roblox
  • Those kids spend an average of 2.6 hours a day on Roblox
  • 43% of Roblox users are 13 and over
  • The fastest-growing demographic is ages 17-24
  • Ad solutions are being made available to creators as a revenue stream
  • Roblox has 43 million daily active players
  • Revenue is expected to be between $167m & $170m, up ~98% YOY
  • Roblox is on both mobile and desktop
  • Virtual concerts show the potential for further digital events

Risks are that the young users might 'age out' of Roblox as their tastes change when they get older. But video games as a career, live events, and full economies being built might be able to mature with the current users. That's this month's bet.
Michael Panebianco's avatar
I've got a 5yr old and a 3yr old and they already know it's a good thing when "green is winning".

But I've never thought about what you're doing, and I think having the thought it will be for them in the future rather than for me in the nearer-term will result in even more prudence. I'll think I'll be pinching this idea.
Nathan Worden's avatar
Yeah it's a totally different psychological angle— both from a risk perspective but also from thinking about what the world will be like when they're old enough to start talking about what they think should go in the portfolio themselves.

If you do something similar would love to hear the ideas your kids come up with! @tecantra
Michael Panebianco's avatar
Certainly. And I think this is something that will definitely warrant a video call sometime.

I already have a small position in $RBLX partly because the technicals are there but also because my eldest is already teaching me about it, what it is, what it's capable of, etc. I don't yet know anything about it's infrastructure or much about their plans but is certainly something I need to learn as he'll be chuffed to bits to learn that we own a part of Roblox! :)

I'll need to give this some proper though and would be great to discuss our ideas some time.
Nathan Worden's avatar
@tecantra would love that- we may want to invite @ryanm on as a guest for that convo as he also has kids and they are using their allowance money on Robucks 😅

Absolutely imcredible that your five year old is teaching you about Roblocks. I feel like we should do an interview where we interview the kids 😃
Ayesha Tariq, CFA's avatar
This is a brilliant concept... and it's great that you're sharing this with everyone. We all need a reminder to keep at the LT investments.
Nathan Worden's avatar
Thanks @ayeshatariq! It's been an extremely fun project thus far. And I love to see that some other people have started to do something similar as well :)
ParrotStock's avatar
The foundation you are setting now, will pay so many dividends (literal & figurative) in the future. Well done Nathan!
Nathan Worden's avatar
Thanks @parrot! It's already been an extremely rewarding project to do together with my wife. Every month we do a check-in and talk about what we are investing in for our future kids. It's a really fun form of planning.