What would Warren Buffet do?

What would Warren Buffet do?

By Nams | cryptohowto | 4 Feb 2021


I think Warren Buffet would farm mSTONKs on Harvest Finance. Maybe you should, too.

As the self-proclaimed CEO of the Stonk pool, I’m here to explain to you why farming mSTONKs on Harvest Finance is a good strategy, arguably the best strategy. In particular, the strategy is to invest in Tesla (mTSLA) in order to get rewarded in $FARM, $MIR and $LUNA tokens.

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I’ll summon the wisdom of my favorite CEO, Warren Buffet, to help me convince you why you should farm mSTONKs on Harvest Finance. After all, Warren knows a thing or two about stocks. The nonagenarian bought his first stock when he was only 11 years old! There is so much to learn from him about stocks. So, basically, I’m asking myself, “If Warren Buffet was to invest on Harvest Finance, what would Warren buffet do?

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Warren Buffet would farm some stonks

Now, you might have heard that Warren Buffet is a strong critic of cryptocurrencies. In one interview he said, “I don't own any cryptocurrency….I never will”. But what if cryptocurrency involved stocks? I reckon that he would be more agreeable, right?

Anyway, why am I so interested in Buffet’s philosophy? Well, because Warren Buffet definitely has proven strategies for investing successfully in changing markets. Buffet is my favorite investing guru of all time, and understandably so. I mean, he’s the world’s most famous investor; building one of the most successful investment firms in the history of mankind. Berkshire Hathaway, Buffet’s firm, has total assets approaching a trillion dollars. The Berkshire stock is the most expensive stock of all time, currently selling at US $350,701 per share at time of publishing this article. So, yes, as far as investment advice is concerned, if Warren Buffet says it’s shit then it’s probably shit. If he thinks it’s a great investment, I’m definitely going long on that asset. Therefore, based on Warren Buffet’s school of thought, what would be the best strategy to use in order to be the Warren Buffet of DeFi farming on Harvest Finance?

 

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First things first, what is DeFi yield farming anyway?

“DeFi yield farming or staking allows individuals to earn tokens in exchange for their participation in DeFi applications.”

Different platforms have their own specifics about how DeFi farming is done. They differ in terms of farmable coins, lock-up period, Return On Investment (ROI), benefits, and other technical specifications. Hence, it is important for a user to understand the DeFi platform before they decide to lock-up their coins in a smart contract or liquidity pool. DeFi farming is a great opportunity to grow one’s crypto holdings, but your success will highly depend on your strategy.

Harvest Finance is another DeFi platform. There are so many ways to invest your coins on Harvest Finance. However, to achieve your investment objective successfully, you need a strategy that best puts your coins to work in order to gain the most rewards possible. So, I will now explain why I am convinced that farming mTSLA Stonks is a great strategy.

STONKS

“An intentional misspelling of “stocks” that originated with an internet meme.”

What is mTSLA stonk?

Now you can invest in a mirrored version of a real-world asset. Mirror protocol allows you to buy ERC20 tokens that track the price of a stock, enabling you to buy and sell them on the blockchain instead of a stock market. The mirrored asset responds to the same price changes as the actual asset. Therefore, it is just like owning the actual stock without the hassle of having to trade it on the stock exchange. These assets are also available to anyone in the world, including people in geographical areas where they would normally be restricted from participating in the American stock market, for example. There is no KYC needed, and trading can happen even beyond stock market hours. The mirrored version of the Tesla stock is mTSLA.

Why farm Stonks?

This investment strategy is suitable for investors who might desire the risk aversity, steadiness and consistent growth of the stock market in the long-run. Stocks have almost always performed better than gold and bonds, especially in the last 2 decades. As much as Bitcoin and some altcoins seem to beat gold, the high volatility in crypto assets is a major constraining factor for many investors who would want to invest in crypto assets. However, mirrored assets are changing that narrative. A mirrored Tesla (mTSLA) is just as good as a TSLA on the stock market, if not better. That is if we are considering the Return on Investment (ROI) on the stock market versus the ROI on Harvest Finance. Consider the return on $100 investment over a year in the mTSLA pool, compounded, as shown below.

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estimated profits on a $100 investment in mTSLA pool in 52 weeks

If there is one thing Warren Buffet would tell you to do, it is to reinvest your profits so that you can earn compound interest. It works like magic! In the words of Albert Einstein, "Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn't, pays it." If you think it is too good to be true, it's because, like any investment, risks are involved. 

 

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"risk comes from not knowing what you are doing - Warren Buffet"

The Modus operandi of the strategy I am proposing

In case you are not aware what Harvest Finance is, Harvest uses the latest farming techniques to get you the highest returns available from the latest DeFi protocols. $FARM is the native token on the Harvest protocol. Farmers deposit funds, the algorithm harvests from farms with highest yields and gives back 70% of the profits to depositors. The remaining 30% is used to buy $FARM for distribution to the Harvest cooperatives who stake $FARM tokens in the profit-sharing pools.

My strategy will be executed in the following 2-step provess:

Step 1: Buy UST on Curve Finance and mTSLA on Uniswap. Then, provide liquidity with mTSLA and UST to get MTSLA-UST. Farm it and receive fMirror-TSLA and rewards in $FARM, $MIR and $LUNA. The f on fMirror-TSLA denotes that it is a farmed token. It is a yield-bearing version of the asset which is being automatically farmed by the Harvest algorithm.

MIR, LUNA and FARM have real use cases. They are solving so many problems in the DeFi space. The forecast on their prices is strongly bullish.

Step 2: Get fMirror-TSLA, stake it and receive rewards as well. The rewards will be given in FARM The asset can be unstaked any time.

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Why is mTesla the stonk of interest for this strategy?

I will highlight some of the fundamentals that are highly likely to significantly contribute to Tesla’s global growth.

  1. Tesla makes electric vehicles and other clean energy products. As the world leans more towards mitigating the effects of climate change, there has been a growing demand for clean energy solutions. For example, more than 20 countries around the globe including China and India have already made proposals to completely ban petroleum-powered vehicles by as early as 2025. The combined population of India and China is about 3 Billion people, representing close to 40% of the global population. We can only expect that the market for electric vehicles will continue to grow. Additionally, the Biden administration has rejoined the Paris Climate Agreement. Therefore, it is expected that they will push for greener legislation which will propel the demand for zero-emission products.
  2. Tesla has been at the cutting edge of innovation in this sector. Thus, they are way ahead of their competitors. Tesla’s technology is meteorically superior to that of its closest competition. All things being equal, their market share for electric vehicles will continue to grow as more countries begin importing electric vehicles.
  3. Apart from manufacturing electric cars, Tesla is involved in producing other renewable energy products such as home solar systems. Tesla is more than just a car company; it is a tech company as well. As we have seen in recent years, the demand for tech products has only gone up and up. Warren Buffet was always skeptical about tech stocks until he came around in the recent past. Now he has significant holdings in Apple (AAPL) and Amazon (AMZN), among others. This is an affirmation that tech stocks are here to stay, and are a good investment.
  4. The CEO of Tesla is Elon Musk. The markets just love him. He has shown us how he can move the price of an asset by 20% in a few hours with just a single tweet. Call him a marketing wizard or something. As long as Elon Musk is at the helm of Tesla, it is only logical to anticipate continued growth into the foreseeable future.

Below I leave you with a graph of Tesla’s share price over the last 10 years. With a percentage increase of 16,424.99% over the last 10 years, clearly Tesla has been to the moon and beyond. It is not too late to jump on this rocket.

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tesla 10-year price history


Nams
Nams

Blogger. Cryptocurrency enthusiast. Economist. Researcher. Cryptocurrency is the future, and the future is now.


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