Luc Smits van Oyen
Shark Tank star O'Leary shows his crypto portfolio
Kevin O'Leary, one of the major investors on the American TV show Shark Tank, recently gave insight into his crypto portfolio. In an interview with Insider, O'Leary explained his strategy for investing in the "digital landscape”. Decades of experience as an index and equity investor underpin his crypto portfolio, according to him.
Since there are currently 11 sectors in the S&P 500, most experts recommend putting no more than 20% in any one sector, and no more than 5% in any one stock.
O'Leary applies that strategy to his crypto portfolio and predicts that crypto, blockchain and innovative financial services will become the 12th sector of the S&P 500 within a decade. He now has 32 positions in the cryptocurrency sector, including Solana (SOL), Bitcoin (BTC) and blockchain company Polygon (MATIC). No position takes up more than 5% of the allocated 20%, he explained.
"Bitcoin is not a currency, it's software," O'Leary told Insider. And the same goes for other tokens like Ethereum, Helium, and Solana, he noted.
"If you believe there is long-term economic value in software, then you can give it a 5% weighting within your corporate mandate. My larger positions are those that I think offer a great economic proposition."
Within the cryptocurrency sector, O'Leary also adheres to the 5% rule. The Shark Tank star urges strong diversification "because you have no idea what's going to work." Only one or two winners in 10 positions can pay for all the losers, he added.
When O'Leary considers investing in a company, especially one in the crypto sector, he first considers what problem is being solved and whether that problem has economic value.
"What do you do to make something cheaper, faster, better, more transparent, more auditable? All of these measures need to be given weight," O'Leary says. "If you can't see the economic value of something, it probably won't survive in the long run.
His investment in Polygon, for example, is also in line with this thinking. He has faith in the blockchain protocol because it aims to reduce gas costs for transactions, which O'Leary sees as a strong economic advantage.
O‘Leary isn‘t touching Metaverse real estate yet though, as he is waiting for a clear sign of what type of Metaverse site will take the lead - curated, or not.
More curated Metaverse locations, O'Leary explains, will be highly sought-after places for economic transactions and advertising for big brands. Uncurated metaverse locations, however, will likely have less desirable businesses, such as virtual pawn shops or smoke stores, and less well-known brands.
When the time is right, O'Leary expects to find a location among other businesses that align with his own vision.
So, as in the real world, O‘Leary places importance on where his stores are located. For example, you won't see a Nike store in a thin alley in a remote location, but rather in the busy shopping streets, among other notable brands.
O'Leary is an inspiration to many when it comes to investing, and he once again demonstrates that his approach is strategic and well thought out, even when it comes to a completely new sector.
Since there are currently 11 sectors in the S&P 500, most experts recommend putting no more than 20% in any one sector, and no more than 5% in any one stock.
O'Leary applies that strategy to his crypto portfolio and predicts that crypto, blockchain and innovative financial services will become the 12th sector of the S&P 500 within a decade. He now has 32 positions in the cryptocurrency sector, including Solana (SOL), Bitcoin (BTC) and blockchain company Polygon (MATIC). No position takes up more than 5% of the allocated 20%, he explained.
"Bitcoin is not a currency, it's software," O'Leary told Insider. And the same goes for other tokens like Ethereum, Helium, and Solana, he noted.
"If you believe there is long-term economic value in software, then you can give it a 5% weighting within your corporate mandate. My larger positions are those that I think offer a great economic proposition."
O'Leary is also interested in the Metaverse
Within the cryptocurrency sector, O'Leary also adheres to the 5% rule. The Shark Tank star urges strong diversification "because you have no idea what's going to work." Only one or two winners in 10 positions can pay for all the losers, he added.
When O'Leary considers investing in a company, especially one in the crypto sector, he first considers what problem is being solved and whether that problem has economic value.
"What do you do to make something cheaper, faster, better, more transparent, more auditable? All of these measures need to be given weight," O'Leary says. "If you can't see the economic value of something, it probably won't survive in the long run.
His investment in Polygon, for example, is also in line with this thinking. He has faith in the blockchain protocol because it aims to reduce gas costs for transactions, which O'Leary sees as a strong economic advantage.
O‘Leary isn‘t touching Metaverse real estate yet though, as he is waiting for a clear sign of what type of Metaverse site will take the lead - curated, or not.
More curated Metaverse locations, O'Leary explains, will be highly sought-after places for economic transactions and advertising for big brands. Uncurated metaverse locations, however, will likely have less desirable businesses, such as virtual pawn shops or smoke stores, and less well-known brands.
When the time is right, O'Leary expects to find a location among other businesses that align with his own vision.
So, as in the real world, O‘Leary places importance on where his stores are located. For example, you won't see a Nike store in a thin alley in a remote location, but rather in the busy shopping streets, among other notable brands.
O'Leary is an inspiration to many when it comes to investing, and he once again demonstrates that his approach is strategic and well thought out, even when it comes to a completely new sector.