My Top 3 Investments for 2022
A sneak peak into what I'm betting on in the coming year.
A common question I get asked is, ‘what bets am I making right now?’ In this post, I’ll share with you my top 3 bets for the coming year.
As always, none of this is financial advice, but just my opinion and what works for me. Do your own research.
Crypto
It’s no secret that cryptocurrency will continue to play a major role in my portfolio in 2022.
As I’ve mentioned many times on Twitter, my primary goal with all of my trades is to accumulate more Bitcoin as I believe that’s the only crypto asset with no competition.
While most view Bitcoin as risky, I believe it’s the safest bet I can make and it’s the highest conviction asset I currently or have ever owned.
As you know, I’ve moved further out on the risk curve and am speculating on meme coins. This is a short term trade, which I hope to exit before the current bull market ends (sometime in 2022). I’ll pull liquidity off long before that to hedge.
I’m outlining my belief that in order to make outsized gains in crypto, one has to specialize in a hyper specific niche. My experience in poker has helped me understand this phenomenon. For example, I play almost exclusively high stakes live no limit hold’em cash games, yet there are many forms of no limit hold’em one can play, from live tournaments to online sit and gos. One can even play other forms of poker entirely.
The same is true in crypto, only multiplied by a hundred. The industry is growing exponentially and new niches are popping up every week (like music NFTs for example).
My intention (subject to change of course) is to focus on Play to Earn games, as I believe this will be the sector of crypto with the fastest growth. I intend to outline the bets I’m making on my Twitter and YouTube, as well as my newsletter, so stay tuned for some of my favorite picks.
In short, play to earn games are video games where users earn real money to play. The most popular game, Axie Infinity, has a fully diluted market cap of 36B. Some of the games I’m betting on are sub 10 million, which gives you an idea of the growth opportunity here. Asymmetric, just how I like it!
If you’re new here, my name is Alec Torelli and I’ve spent thousands of hours in crypto, DeFi and NFTs. My mission at CrypTorelli is to simplify crypto so anyone can understand it. I’ll also share the latest, most exciting opportunities in the space before anyone else. Join the thousands of others to stay up to date.
Start Ups
The second industry I’m betting on are start ups. I’ve made several investments in 2021, most notably through AngelList.
AngelList makes investing in startups extremely easy. Create a profile, apply to syndicates in the niche you want to invest in, and opt in to your favorite deals.
My wife and I are focused on the health and wellness niche, since she has built two brands in that space and it’s something we know very well. It’s also something we’re both deeply passionate about and believe has a positive sum impact on the world.
One of the investments I’m particularly excited about is Patch Organics, a plant based milk company made from pumpkin seeds. It’s great for vegans as pumpkin seeds are high in iron, something vegans often lack.
Another company I’m extremely bullish on is Halberd Corporation. They believe they have the magic keys to cure the root cause of many of the world’s leading diseases, including cancer and Alzheimer's. In case you missed it, here’s my interview with the chief of science.
Overall, I like start ups because they are fun, challenging, positive sum, asymmetric and non correlated to crypto.
Mobile Home Parks
Yes, you read that right. Although they sound like one of the least sexy investments in the world, these babies have great cash flow and I believe are one of the last great frontier of real estate, and the only aspects that aren’t in a bubble.
I’ll be releasing an interview with someone very close to me whose an expert in this niche, so be sure to subscribe to my YouTube to be notified when it drops.
Aside from the obvious that real estate is much more stable than the former two, and non correlated to either of them, there are 5 reasons I love mobile home parks.
Cash Flow
There’s no cash flow like real estate cash flow, and mobile home parks really shine here. If you work with a savvy partner who can find these in a good location, the land is cheap compared to the rents. Multiple homes can fit in a property, allowing for generous cash flow for the owner (that’s me!).
Low Turnover
Traditional real estate suffers from high turnover, yet mobile home parks don’t. Since it’s costly to move, a typical mobile home park only has 2% turnover per year. Translation: your property is always rented and cash flowing.
Low Expenses
Since you as a mobile home park owner merely buy the land and rent it out, the maintenance is very low. This translates into more money in your pocket at the end of the year.
Very Low Supply
Something we all love from the crypto space are assets with a low supply. Due to zoning laws, mobile home parks are nearly impossible to build (only 50-60 are built per year), and more than that are torn down.
Contrast this to apartment buildings where 350,000 are built every single year.
Tax Shelter
Mobile home parks offer some of the best tax benefits of any real estate asset class. (NFA, double check with your accountant).
Traditional real estate allows you to depreciate your asset by roughly 3% per year, whereas mobile home parks are upwards of 5%.
Here’s a real life example of how that may look. Let’s suppose your mobile home park is $1,000,000. At 5% depreciation you can write off $50,000 against your income.
If your income is $100,000 per year, suddenly with the depreciation it’s now $50,000. At a 25% marginal tax rate, that’s amounts to $12,500 a year in tax shelter.
I’ll be putting out more content about each of these niches across my channels, so be sure to stay tuned.
Which investment is your favorite?
Also, if you have questions about mobile home parks, reply to this email and let me know. I’ll address the most popular ones in an upcoming interview with my favorite broker and partner in the space.
Alec