Conviction Without Stubbornness: Utkarsh Ahuja on Investing, Risk and What Comes Next

[00:00:07] This is the Crypto Hipster Podcast. This is not a traditional interview show. These are perspective-driven conversations with founders, builders and independent creators shaping what comes next.

[00:00:30] We go beyond headlines, beyond hype and beyond price to explore ownership, freedom and opportunity in the digital economy. Where builders talk freedom, not price. Hello and welcome to the Crypto Hipster Podcast. This is your host Jamil Hasan.

[00:00:55] Today I'm joined by Utkarsh Ahuja, founder of Moon Pursuit Capital. Rather than talking about price predictions, I want to understand the person behind investment decisions, why he built Moon Pursuit, how his philosophy has developed and what experience is emerging behind the technology that has taught him about founders, risk, conviction and being wrong.

[00:01:24] Utkarsh, welcome to the Crypto Hipster Podcast. Utkarsh Ahuja, Happy to be here. I'm happy you're here. Thank you so much. It's been a little over a month since I had been on break and now I'm off break and thanks for joining me. Nice. So let's start with you. Okay. Before we get into Moon Pursuit Capital, what was happening in your life that eventually put you on the path toward becoming an investor?

[00:01:54] Yeah, so good question. I was, my investment journey, you know, the wholehearted investor journey really began around the time that I was going through an exit, exit of a firm that I used to run. This was in the marketing and technology space.

[00:02:24] And back in 2016, I was, we were undergoing a potential exit of this firm to a larger conglomerate. And, and in that, in that time, I started, I discovered this interesting world of, of Bitcoin and, and potential other altcoins.

[00:02:50] And this was a newer journey for me that was initially just brought up by, by friends, to be honest. And, and we, we underwent an exit of the company, were able to sell it. And, and during that time I was dabbling in trading, trading Bitcoin, investing in varying other, other things. I was, I guess more of a, it was more of a personal passion at the time.

[00:03:20] And that really kicked off an investment journey that started with, I made some money, lost some money, as people do in this, in this space and didn't really get disheartened. In fact, if anything, it raised my conviction because I was very curious about the, about the digital assets script, this asset class per se.

[00:03:48] And at the time I would not really call it digital asset, it was just called crypto. And, and, and the interesting thing that I've, I've always been very macroeconomic focused. And I wanted to really see where does this asset class tie into the larger economic thesis?

[00:04:10] You know, when we, when, when we're looking at macro patterns, global liquidity, supply chains, do all of those actually have an impact to this asset class? Initially it's a little bit of the wild, wild west. So, you know, which is fun and we can also lose a lot of money.

[00:04:28] And I had, the shift was slowly happening and, and I geeked out, taught myself day trading and was a day trader for almost two years in crypto through a bear market. And where I guess more good portion of that was a bear market. And I think that really tests the resolve when you can start doing that and really understanding how this asset class works. But then we emerged out of that in a, in a larger, larger bull market.

[00:04:56] And at this time I became more of an active investor in the ecosystem and not just a trader. So really investing in companies themselves. There were, and you know, not, not necessarily just a DGN projects per se, but actual companies that had value, which was very interesting to me as to how certain companies were launching within this industry. Versus, you know, they were just, they were type regular technology companies and became an angel investor.

[00:05:27] And I was a trader and an investor in these companies. And before I knew it, you know, you start, you kind of get, start getting known as the crypto guy. You have friends that come up to you and you know, pretty soon it was, it started off as a, can I get some advice? And then pretty soon it's like, Hey, if I give you my money, will you invest for me? um, that turned on a little bit of a light bulb as well as a cautionary tale that, Hey, um, I don't want to go to jail.

[00:05:53] So, um, maybe I should start something, um, start a fund and really take this, uh, take this puppy and actually turn it into an investment fund and become more of a wholehearted investor where I can actually share my learnings of investments with the world. And, um, during this process, I became a thought leader and speaker, uh, at global events around the world. So, awesome.

[00:06:22] So how do you, how do you, some people say that they're a long-term investor and some people say they're a trader, right? How do you balance, since you're both, how do you balance the conviction with the desire to, to, to, to buy and sell? Like any same opposites? Yeah. Yeah. You know, I would not consider myself, uh, you know, there's a, the term long-term trader is a very, uh, it's very loose terminology.

[00:06:51] Um, I'm not doing, um, I'm not doing much day trading anymore. Uh, there, do I do swing trades, uh, once in a while? Yes, I do. From, you know, perspective, run something for a couple of weeks or so, two or three weeks. Um, but depending on the asset class.

[00:07:11] So if we, let's say we talk about crypto, um, to me, I think, you know, someone can say, okay, I'm going to buy and hold, um, buy and hold and hold for, uh, years on end. I actually think that's, um, to me, I, you know, for lack of better terms, there's a little bit of laziness involved in that. You know, I think that, uh, you can, if you take the time to really understand an asset class, you can also understand the nuances of the cycles of an asset class.

[00:07:40] How do those cycles relate to macroeconomics? How do they relate to global money supplies? What is a geopolitical events due to that? Uh, you know, there's this whole theory on four year cycles for crypto. Um, you know, and that gets debated constantly. I, I still am of the proponent that that there is true to that.

[00:08:00] Um, but not necessarily related to the havings anymore per se, but I think there's some global supply movements that impact that, you know, for context, crypto, what crypto does in a potential four year span stocks do in a potential 10 year span and real estate does in a potential 18 and 19 year span.

[00:08:21] Um, and, uh, you know, it's, there's a lot that happens within this industry and, and maybe one day that cycle will get extended for crypto as well. Um, but I feel that, you know, when you get a certain understanding of how these cycles operate, how it ties into those geopolitical movements, you can actually get in and out, but not, it's not, um, there's still long enough time durations where you can still very conveniently invest and make, uh,

[00:08:50] and make good investment decisions. Yeah. I think the good decisions include don't chase, right. Don't you? Yeah, exactly. You know, dude, I mean, it's, uh, it's, it's interesting when the, it's the herd mentality that, uh, that is, that is something where we tell our investors and we, you know, this is where, where the expertise comes in.

[00:09:14] I think there's, I, I can't, I can't even count the number of times when someone said, you know, and I use the word emotional investing and they say, oh, I'm not an emotional investor. I said, okay. Um, and they'll give some example. I'm like, that's emotional investing. And I said, no, how is that emotional investing? I said, no, you don't understand.

[00:09:32] Like, um, it is very difficult to just separate emotion out of convict, uh, in emotion and have conviction being driven by emotion versus conviction being driven by actual data and what makes sense. And a lot of times it goes against the grain of what you might be thinking. And so there is a discipline that comes and a lot of times, unfortunately people don't have that discipline.

[00:09:56] And so, you know, this is where we come in and we help, uh, folks in educating them and also investing on their behalf or what have you. I'd agree. I'd agree with that emotional chase, uh, perspective. Um, when, when did that, like, when did investing become something you wanted to build you an organization around? Like what, what was that moment that you said, okay, I don't know when to sit just to want to do this for me and my friends.

[00:10:23] I want to build, I want to build a company around cause I think I had the expertise to do it. I think that last piece you just said, you know, where I think I have the expertise to do it. That, um, for me, there was an aha moment that, and, and, and I would not say this in a boastful way or anything.

[00:10:42] I was, uh, I felt a privilege that, okay, you know, um, what had come naturally to me when I, I actually took a step back and looked into how many hours of my day for X many years, have I been involved in this topic, in this industry, in the way this entire investment thesis works.

[00:11:08] And when I looked back and it was mind blowing, I said, okay, well, it kind of makes sense that what, what is starting to come naturally to me has been, there's a big back history behind this, you know? And it's like, um, um, um, they, they talk about, uh, preparation and no one sees all the preparation when it comes to actual time to, to the game per se. Right. And so the actual game is played with all the practice that comes prior to it.

[00:11:37] And so when it's actual game time, it becomes easy. And, um, and so when I, when I had that aha moment that, okay, well, I actually have a lot of insight that most other people don't because of the sheer amount of time that I've put into this, that, Hey, I can actually help people with this and build a business around this. You know, no one's going to, for someone to catch up to 10,000 hours worth or X many more hours worth, it's, it's going to take them a very long time.

[00:12:06] And so, and, and I would, I would love for more and more people to get, to get that much experience in this industry and to, you know, just help build the industry as well. Yeah. Let's talk about some of that investment philosophy. You said earlier that, that just buying and holding onto something that's considered laziness, right? And to a degree, to a degree, I agree with you, but how do you distinguish between true conviction, believing in something and, and stubbornness?

[00:12:38] I think, um, to me, stubbornness is when emotions drive your decisions. And so, um, and, and I mean, and so it's, and I say this with a caveat, right? And so, I mean, you can be stubborn. Well, I guess let's put it in a, in a different way. You can be stubborn for the right reasons and stubborn for the wrong reasons.

[00:13:00] And so, um, and so, um, if there is a data-driven approach to, to making investment decisions, um, and where you take an emotion out of it. And even if that, even if your emotion, uh, leads you, emotion and data lead you to the same, same analysis, then at least that's a sound decision in terms of what to invest in and what not to invest in.

[00:13:28] Or when to get into an investment and when to get out of an investment. And, um, um, now conviction, you know, conviction is the same thing. I mean, it's like, you can, someone could say, I have conviction on, uh, on this and be, and have it come purely from an emotion angle. Um, and we, when we make our investment decisions, we make a conviction based upon data.

[00:13:55] And so I think the, the wording around this is more that, um, I think, um, if there are certain, there are parameters that an investor can set for themselves. Be it, um, what is, uh, what are all the checklist data points on what to invest in? Once you have an, once you identify that, what are the price points? What are the macro events that will influence this?

[00:14:23] What are the technical events? Um, and, um, what are the fundamentals of the, the ticker, the business, the company itself? So, you know, when we really look at, um, um, fundamental technical and sentiment analysis on how, um, um, how a certain token per se, or how a certain stock or, or what have you, um, how that operates.

[00:14:51] Now, the, by, by building a conviction of all of these pieces and everything aligns, that becomes a much more sound decision. We, you know, if, if we, if there was one more thing to add on this, we talked about, um, the term laziness. Okay.

[00:15:05] And so now I would, I would put a caveat with that, that if someone, if, if a person, uh, does not have enough experience and if they wanted to make a safer bet into something and just hold it for some time, that I, I would still be one to fully support that. I would also say is that, um, I would say is that, um, you know, I've always believed that risk is a measure of how much knowledge you have on a topic.

[00:15:34] And so, you know, if I was to repeat that risk is a measure of how much knowledge you have on a topic. So risk for one person is different than risk for another person. One person can have more conviction because they have more data points at their disposal versus someone else that may not have had exposure to that much knowledge. And they might choose to say, Hey, you know what? This looks safe, but I'm just going to buy and hold. I don't have time to actually go into it and really extract additional alpha from this asset.

[00:16:03] And I will, maybe I'll hold it for five or six years versus someone who will go in and out two or three times in five or six years and make a little bit more in that same, in, in, in that same token. And so this is what I kind of talk about the, um, you know, maybe I should rephrase the term laziness for, um, how much time is actually being put in to study.

[00:16:24] Um, and I will say that, um, despite us, our investment fund and what we do is we educate people, uh, we're not just buying and selling on people's behalf. We're also educating them along the process. And so, because I really do believe that it's important for everyone to really be knowledgeable of what they're putting their money into.

[00:16:46] I think that goes back to what you said, um, that losing money gave you more conviction. Most people would like, would like if they lost money, they'd, they'd be gone. Right. You said losing money gave you more conviction. Right. So I'm interested to know like a time where you made a decision that didn't work out in your favor emotionally or financially and how that made you a better investor.

[00:17:13] Yeah, I think, um, well, it definitely helped that I made money first versus losing. And, and, uh, but you know, the, I think, um, you know, when, when you're looking at, um, I'm, I'm looking around, I'm seeing people make a good amount of money in an asset class.

[00:17:37] I have, I had done enough, even after losing money, I'd done enough research to know that, um, this is something that has legs behind it. Yes. I lost money, but I look at that as a challenge. Some people can give up and say, okay, no, it's, it's, this is a, this is a hoax. There's nothing here, et cetera.

[00:17:59] Well, the thing is that if it was really a hoax, it would not even back then, um, this industry was already growing leaps and bounds faster than anything else out there. So this is not just, um, this is, this does not seem like a fad. This is not, uh, um, the, I think the biggest conviction I had is just the whole premise of Bitcoin alone, let alone the entire, the rest of the entire altcoin market. But Bitcoin alone, the fact that it's, uh, it's an unbreakable algorithm.

[00:18:28] Um, now quantum is a whole other thing, which, you know, there, I do have some thoughts on that. Um, but an unbreakable algorithm with 21 million Bitcoin that can ever get created. That becomes very interesting, right? This is something that cannot be manipulated as, um, where you can print more Bitcoin, you know, just like you can print more money. You cannot debase, like the same way you can debase a currency.

[00:18:57] You cannot debase Bitcoin. Um, did, um, and there's, you know, I can go on and on with, with this. Now back then, did I understand all of these pieces? No, but there were the initial inklings that, okay, like this is a very interesting, I would love to explore more about what this is all about. And so through that, it was like, whether I was making money or losing money was more about, okay, well, what, what can I learn from this? Right.

[00:19:22] And then how does, and that actually took me to a journey of even understanding macroeconomics to a whole different degree that, and like about debasement of currency and all of that. And how, you know, now whether Bitcoin ever becomes something like where it's an actually used as currency for, um, for the whole world, like that remains to be seen. And I'm not necessarily saying that it's going to become that. Um, but the initial premise, what was created for was a very interesting concept. So. Yeah.

[00:19:50] I am interested to know your, your thoughts on quantum. Yeah. So, uh, you know, quantum threat, the quantum threat is real. And, uh, you know, this is not, um, this is not like a Y2K moment. It's going to come and go and nothing happens. A lot of people getting ready for it and then boom fizzles out. Nothing really happened. I actually think that the quantum threat is real. Um, I think quantum. Threats are going to come sooner than people might realize.

[00:20:18] And I think it's going to hit the crypto industry first, just because of the sheer nature of, um, the way AI compute power is being utilized within, um, uh, within crypto.

[00:20:35] Um, and I think that the fundamental, um, the fun fundamental infrastructure of, of, of crypto, uh, where the whole blockchain with decentralization, it actually, uh, creates a big exposure. Um, we're, uh, luckily, I mean, I actually, we're actually invested in, uh, in, in a quantum encryption company, which I, you know, in, um,

[00:21:03] um, and in, in my opinion, I actually think this company has actually solved, uh, solved for the quantum threat. Even, you know, there, I would say there's still under the radar, but, uh, they've solved for the threat. But the, the interesting thing for us, um, you know, when we look at this, I mean, I, I got very fascinated with the whole quantum encryption, which is basically security for quantum and where all that is headed. Um, and I think it's going to hit us like a freight truck before we realize it.

[00:21:33] But, um, the path to there, now there are multiple companies out there that are building solutions. The, the issue is how do you migrate every single company to that solution? It's like, for example, Hey, we built a patch, but everyone needs to install this patch. For example. Okay. For in, in, in layman's terms. Now, um, that is a massive undertaking. Okay.

[00:22:02] How do we, um, how do we do that? Um, we, um, one of the things I look at as an investor, because we're not only a hedge fund, we're also a venture cap. We're also, we also do venture capital. Um, and from when I put on that business lens, and this takes me back to my days of actually investing in early stage companies. When I put, put on that lens, we really look at what is the path to migration. You can have a fantastic technology, but if you cannot migrate, if the UI is not there.

[00:22:31] Um, if it's, everything's clunky, we're not going to invest in that because it's not going to get adopt, uh, adapted. And, you know, we found a company that actually started focusing on not the companies themselves, but the blockchain infrastructure layer. So now with everything passes through a blockchain, everything. Now, what if we just change the, what if we coat the entire infrastructure, which automatically coats the companies?

[00:22:59] You, you know, you, you see what I'm saying. Right. Right. And so these companies are going through, everything is passing through it. So now you have a much smaller base to work with and you can literally transform the entire industry. And so, and it was a very monumental way of looking at quantum encryption. Um, and so, you know, we invested in a company called American Fortress that is, um, uh, is doing that.

[00:23:24] And, and, and, and I think that even for the web two world, you know, if we look at web three as synonymous with crypto, even for the web two world, that's now shifting towards web 2.5, so to speak, is I think the solutions that will, um, that will actually come to be are the ones that where the path to migration is a lot easier.

[00:23:47] Um, versus every single person in the whole world trying to install a plugin or install this or install that. You know, I just don't think that's going to be as effective. And I think they need, there needs to be a whole other way of changing the overall infrastructure. So, so it's like a seamless transition for every human being because it will impact every human being. Well, you asked me if I, if I understood what you're saying. Yeah.

[00:24:14] Cause you answered my last question was what is the difference between a great technology and a great investment? And the great investment has that UI component, you know? Yeah. Yeah. I mean, I think, you know, like if we were to talk about there now, there are a company can have a fantastic valuation, but, uh, from, uh, from, uh, and, and they can, well, let's put a different, actually, let me put it a different way.

[00:24:38] A company can have fantastic technology, um, and it can have an inflated valuation, but it may not be the greatest investment because, um, because of just the mechanics, uh, mechanics of adapt, of, of adoption. And so, you know, a lot of pieces have to align from an investment standpoint, but that doesn't mean that certain technologies are not already there. And I think that that's what comes first. The clunkiness comes first as overall in technology.

[00:25:05] And then now how do you roll it into something that's easy for migration? It's like the computers of yesterday to the computers of today that sit in a, in like a tiny little piece like this, you know? So it's, uh, um, that's kind of where the differences lie.

[00:25:21] Right. And the other thing also is that, you know, when we talk about like AI, for example, and even with quantum and other types of technologies, I think that when, when we get, um, to the next phase of a technology, like even with AI, for example, I think that, um, it goes to, when it goes to the actual infrastructure layer that is required to support.

[00:25:44] So I, you know, the companies we look at are may not, the companies we look at may not necessarily have .ai in their name anymore, you know, but they could be supporting that industry, you know, as in, in infrastructure place. And so, and I think that this is where the next wave of investments can lie, but that actually are going to make a difference in impacting, um, certain existing technologies, the way we think of them today.

[00:26:10] Okay. That makes sense. So you said you're a VC firm, we're talking about this now. So when you meet a founder who is building in an emergency, uh, an emerging, emergency. Yeah, no emerging technology environment.

[00:26:28] Like what tells you that they actually are going to understand the problem instead of just simply chasing technology and slapping that .ai or .quantum on their, on their project and, you know, chasing. If a founder can explain to me in 30 seconds or less and, and, and he can explain the, a problem in layman's terms.

[00:26:57] And a lot of times if, if they can really, if they really understand a problem, they should be able to even potentially give an analogy that it can make a layman understand. Then that's when I know that they really understand, like they, there may be, they, they really understand the problem and they understand a solution. And so, um, sometimes I see very often a solution in looking for a problem.

[00:27:21] And so, um, I think when founders really start with the problem in mind and with a certain, uh, certain flavor on their own understanding, those founders become very interesting to us, you know, where they can explain a problem. And a lot of times these founders have, um, some sort of, uh, personal connection to a problem.

[00:27:46] And, and, and the ones that have that personal connection tend to be a lot more, um, intricate in how they solve for that problem versus just taking a problem from the, from, from the world without actually experiencing it themselves. So let's talk to you. The next question, the outtarsion from 2016 and outtarsion from today. Yeah.

[00:28:12] What mistakes are you less likely to make today than you were 10, uh, 10, 10 years ago? Um, I think our, uh, the, the biggest, well, AI has been the biggest change for the entire world. Okay.

[00:28:34] And so, and, and interestingly enough with, so we've started, we've adopted, uh, the usage of AI in, in our, in our entire business and the way we operate and the way we're analyzing, um, analyzing deals as well as analyzing, um, investment trends.

[00:28:54] And what that has actually taught us is that we, we thought we did a lot of due diligence, but we realized that there were so many pieces that we had overlooked. And so from that perspective, it's actually, uh, allowed us to be a lot more meticulous. Um, if anything, where, um, we're not giving out checks as easily, let's put it that way.

[00:29:21] Um, and, um, you know, the, the woodcar shop yesterday was probably a little bit more free on giving checks and, um, versus, versus today where, uh, we're a lot more meticulous. Um, I also, um, the, the other thing is, you know, we, we talked about that, um, we use the word stubbornness, right?

[00:29:41] I think every, every investor and even every thought leader has a, has a certain degree of stubbornness that, um, and they can go two paths on that. And one of the things I realized is that I might have a good deal of knowledge on a topic, but at the same time, um, I want to make sure I'm constantly learning because the world is also constantly evolving.

[00:30:07] My entire viewpoint on, uh, investment theses and how, how they're impacted has completely shifted. And, and it's actually allowed me to become a lot more humble and become, um, a life, a much more of a lifelong learner. And, um, and realizing that there might be patterns in from cycle to cycle from an investment perspective, but at the same time, there's also a lot of differences.

[00:30:31] And so we have to approach everything with a whole new lens, um, take history as a backdrop, but also be, be open to understanding the new market dynamics and how they're shifting today. Yeah. A lot of people don't realize that humility is a strength. Yeah. So. I would agree with that. Awesome.

[00:30:53] So if you and I had this conversation five years from now, like not 10, but they say five years from now, what would you, what would have to be true for you to feel that moon pursuit became what you intended it to become?

[00:31:09] Well, what would need to be true for moon pursuit is that, um, five years from now, what would need to be true today is the infrastructure that we're putting in today to really, uh, institutionalize our farm.

[00:31:25] We're now, we're now at an inflection point of, um, based upon feedback from a larger audience around the globe that, um, we have all the tools necessary to turn this into, um, you know, for lack of better terms and into something very massive.

[00:31:45] But, um, but, but to allow for that is, um, the operational pieces that need to come, the, um, all the checklists that need to come into play. There is, um, there's, um, there's no, there's no shortcut to, um, to reaching certain, certain goals and we cannot take those shortcuts either.

[00:32:09] Um, prior to even accepting capital for where we're, we're, we're actually, uh, uh, going to be launching a new fund and, um, a market neutral quant trading fund. And five years from now, I'm hoping that this, uh, it is established. It's very well established all around the world. We have, um, multiple, um, limited partners and investors from all over the world.

[00:32:34] And, but to get to those points that there's, uh, again, humility and a lot of, a lot of work involved that we're going to just take it step by step. Awesome. Well, this has been a very enjoyable conversation. I want to thank you very much for speaking with me today. Thank you. Thank you. It's been a pleasure. And now I have one last question before, before I'm going to ask you, how can people find out more information about you and about moon capital? Yeah.

[00:32:58] So, um, we can go to, uh, moon pursuit.com and, uh, there's plenty of information there. Um, uh, if anyone, uh, wants to look at our, we have our LinkedIn pages as well. And my personal is, uh, you can find me on LinkedIn, um, or you can Google me or Google moon pursuit. We're, um, constantly in the news these days. And, um, um, um, I think our, our website itself gives a variety of information. So you can, and you can reach out to us through any means. So awesome.

[00:33:29] Thank you very much for your time today. Absolutely. Thank you, Jamil. Thank you.