Brooker Belcourt joins us to discuss Rewarding the Next Top Money Managers on Covey.
Covey was founded by Brooker Belcourt, an established investor who spent the last 7 years managing investments for Citadel, a Tiger Management Seeded Fund, and Coatue. Brooker built Covey as a personal tool to simulate and track his own portfolio strategies but soon realized Covey could be a ubiquitous tool for the future of finance.
Want more resources around this podcast? Keep up to date on the latest articles here.
The following transcript was created using artificial intelligence. There will be some grammatical errors below.
00:01:20:13 – 00:01:43:20
Richard Carthon: What’s up, everyone? Your host here, Richard Carthon. And today we got a very special interview with someone out in in New York City. I just got back from NFT, NYC and had a great time. Unfortunately, I did not get to meet this person. However, what they are working on is really cool and I think something that everyone here listening today is going to be really interested in. We have Brooker Belcourt with Kobe Covey. How are you doing today?
00:01:44:09 – 00:01:45:29
Brooker Belcourt: Doing great, Richard. Thanks for having me.
00:01:46:19 – 00:01:55:01
Richard Carthon: Of course, we’re excited to learn more about everything you have going on. But first, let’s learn let’s learn a little bit more about you. Can you give us a little bit of background on yourself?
00:01:55:21 – 00:02:24:09
Brooker Belcourt: Yeah. So I’m a Brooker Belcourt. I’m the founder of Covey. Covey, a community created to find and reward the best analysts for anyone to copy, generating higher returns for more people. And so prior to Covey, I was working in the hedge fund space for the last seven years. Most recently, I was an analyst at Citadel covering tech companies, and before that I was at Goldman doing banking. And I grew up in Canada, known, as you said, living in New York.
00:02:25:16 – 00:02:41:08
Richard Carthon: Excellent. So coming from the traditional finance world and even working in traditional hedge funds, what was that first introduction to crypto like? How did you even first hear about this and what made you want to leave the traditional side and come more to the web3 side?
00:02:42:03 – 00:03:16:28
Brooker Belcourt: Yeah, so I was at a hedge fund called COTA in 2015, which was like one of the larger tech hedge funds, and I was tasked to learn about Bitcoin. And so I contacted all these experts, learned a ton about it and fell in love with it at the time. And so I’ve been keeping an eye on it since then. And then in 2022, when I started building Covey, we basically allow anyone to come to Covey posts their equity ideas, their ETF ideas, even cryptocurrencies, and they create a portfolio.
00:03:17:15 – 00:03:55:18
Brooker Belcourt: And then we track people and rank them and reward them at the end of the month and we pay out real dollars. And so the end goal is to find the best and copy them. And as we were building this product, we, we had these two big problems arise. And the first problem was, hey, we want to allow anyone to get a job or to become a manager off of their track record on COVID. And the easiest way to do it would be to have an auditor come in and verify everyone’s track record and put a stamp of approval.
00:03:55:20 – 00:04:31:21
Brooker Belcourt: But that would be crazy expensive, so we couldn’t do that. And so we thought, well, what if we posted every trade idea to a theory and gave every user on our platform an immutable track record? And that way they could share with anyone they want. And people would believe they had those ideas when they said they had those ideas. So that solves the track record issue at a really low cost. And then we had the second issue, which was a lot of our users were coming in internationally, and so 40% of our users were international and we wanted to reward them for their ideas every month.
00:04:32:14 – 00:05:03:17
Brooker Belcourt: And so we thought we could use banking rails, we talked, applied, we couldn’t figure out a way to get people paid in New Zealand at the same time as people in France. And we were a small company, it was pretty much impossible. So we decided just to collect Ethereum addresses and post payments in tokens at the end of every month to People’s Etherium address. Super simple. We could do it in minutes and solve another problem, and we’ve noticed that just keep solving these problems for our business. So, so we love it and then we’re enamored with it.
00:05:05:00 – 00:05:36:22
Richard Carthon: So being able to identify these challenges in Web two, where things are much slower, harder to track and harder to implement, you basically bridge that over into Web three with having something as simple as, Hey, here’s this native token, we decided we’re going to pay you out in just give us your address and we can pay you as soon as we are been able. What’s been the reception of people being able to now go in and work with something as seamless as that? Like how how was your initial users been receiving this?
00:05:38:07 – 00:06:09:11
Richard Carthon: Yeah. So we right now, we pay people out in other people’s token. We hopefully will give some sort of a native token to the platform. But right now we’re using other people’s tokens and the reception to using crypto has been has been really positive. We have two ways that people interact with it. One way are the crypto enthusiasts. They come in, they connect metamask and they post all their trades using Metamask and it’s awesome.
00:06:09:13 – 00:06:36:10
Richard Carthon: And if they own their track record, it truly is theirs. And that’s one segment. There’s another segment who don’t know as much about crypto, don’t have metamask. They just love investing and they’re passionate about creating a track record. We post their ideas on their behalf, and I would say the split is probably more on the managed side of us doing it for them. And we’re we’re seeing a lot more growth in the metaverse side of people connecting through that.
00:06:37:21 – 00:06:45:05
Richard Carthon: Excellent. So one of the things that I found really cool about this, right, is, I mean, you get right to the point even on your website, so.
00:06:47:07 – 00:07:18:05
Brooker Belcourt: Covey is an analyst on community created to find a reward the next top money managers. So what does that mean? So people who are coming in, who are traders, because there are a lot of new people who come into the crypto space who think they are traders, but they’re investors. Traders are much different, but they’re trying to become traders. They’re trying to learn and educate themselves. Are they? They want to be able to put their theories. So this is a platform for them to be able to come in, start either learning from someone who’s having some success or if they are having success themselves. And I want to share this with the community.
00:07:18:13 – 00:07:21:05
Brooker Belcourt: This is a platform that’s going to help enable that.
00:07:21:28 – 00:07:54:23
Brooker Belcourt: Yeah, you got it right. And I love thinking about the sports analogy. Right. To find the best athletes, we scour the world, we spend millions of dollars, we rely on data. And we’ve created this huge infrastructure to identify the next great basketball player, the next great soccer player. But when you think about investment management, we don’t really have any infrastructure to find the best. And we only look to Ivy Leagues and investment banks as the source of true the next great analysts.
00:07:55:06 – 00:08:29:12
Brooker Belcourt: So as you’re saying, a company is designed to find and reward and even train the next top investment managers from any background so that anyone can copy them and everyone can win. The cool part is there’s no risk you come to clubbing, it’s totally free. You can start entering ideas and even cover your gas fees for posting in the beginning. And it’s really easy. And you can trade equities, ETFs, cryptocurrencies and every month you’re capable of winning 1000 to $2000 in our monthly rewards.
00:08:30:04 – 00:08:48:28
Brooker Belcourt: So we think that’s awesome and we’re really excited. And I think it’s just it’s a lot of fun for people to come and play with these ideas and get to see other people’s ideas, right? We track 50 metrics every 5 minutes, you of hedge fund level data on these ideas that you’re creating an immutable track record on All for free and you can win money.
00:08:50:03 – 00:09:25:01
Brooker Belcourt: Which is really cool. And the other part of it too that I think is unique is you are able to come into this and not just work with cryptocurrencies, but also know traditional stocks and ETFs and other things as well. So you can get a full balanced portfolio of both traditional and web3 type of investment vehicles. Have you found that people who are coming in and using this or doing both sides and you have some that are only doing traditional, only doing web three, are you seeing more of a blend of of all of the above?
00:09:26:02 – 00:10:00:20
Brooker Belcourt: I think people love us because you can put it all in one portfolio. You don’t have to have your Coinbase account of crypto in your fidelity or E-Trade account of equities. So you put it all in one. They love that. When you look at our data, we skew about 20% of our ideas are in crypto and 80% in equity and ETFs. That’s way over indexed the market. If we look at the market cap of US, equities is probably well over 30 trillion and the crypto market cap is a trillion.
00:10:00:22 – 00:10:11:00
Brooker Belcourt: So we’re much heavier at 20% crypto than in the other markets. So clearly our users are a little bit more into crypto than the average person.
00:10:12:09 – 00:11:02:17
Brooker Belcourt: Got it. So another thing that I think is interesting about this particular platform is, as you’re saying, being rewarded. So, you know, obviously there are competitors out there and each platform has its own unique twist to it. Where was this one? Because you’re able to put all of your different portfolios together from, you know, like you said, for the Fidelity and a Coinbase together, manage that and then have people be able to come in. It’s also helping to bridge the diversification of people who are only in traditional finance right now and then being able to get some of that exposure in the crypto and then starting to see that, hey, fewer different ways that I can merge the two and find some success in is opening your eyes to both because you also have some of your hardcore web three guys who are only investing in crypto and now they can see that, oh, I can do some of this in traditional finance as well.
00:11:02:19 – 00:11:20:05
Brooker Belcourt: So there is kind of being that like 2.5. Right? So Web 2.0 those it just like everything that we’re seeing right now, web 3.0 is everything on blockchain and everything else. So this is kind of like a 2.5 where you’re kind of merging both of those together to cohesively be able to blend on one platform.
00:11:20:23 – 00:11:52:03
Brooker Belcourt: Yeah, I think it’s it’s such a great way to think about it. We have a lot of people who are interested in crypto who maybe come from traditional finance, who are not ready to open up a Coinbase account and start trading altcoins. But they have some ideas and they want to they want to have some feeling of being involved. And so they come they create a COVID portfolio. We also have a lot of people who are building strategies and trying to create some strategy that will win over time. And they test their ideas on COVID before they get in the real markets and start risking real money.
00:11:52:07 – 00:12:06:27
Brooker Belcourt: So come to COVID, train your models, build a great model, and once you actually have it, figure it out. Then you can try to get a job easier track record, try to become a manager using your track record, or just invest your own money using it from the same methodologies.
00:12:07:28 – 00:12:27:12
Brooker Belcourt: So some of this is right now they’re like, Oh my gosh, this sounds cool. This is exactly the platform. I’ve been looking forward to test all of my theories, etc. You need to come on to the platform with X amount of money to start executing different trades. Can they come on and kind of do phantom trades? Like walk us through a brand new person trying to come on in and use the platform.
00:12:27:27 – 00:12:59:18
Brooker Belcourt: Yeah. So you go to COVID dot IO, CRM, V1, dot IO, and all you need is an email address and you can join. It’s totally free. Don’t ask for anything. And if you want to start earning money off of your track record, your track record would just be equity ideas. You know, Facebook 10%, Google 10%, crypto ideas, Ethereum 10%. You enter that in and you hit save portfolio, then you’re in the monthly competition and you’re subject to earning rewards.
00:13:00:00 – 00:13:19:06
Brooker Belcourt: So if you if you do well then you’ll have to provide in the theorem address. And that way we can pay you in, in the cryptocurrency and so you can start earning for your tracker, but totally free fun outlet for you. Or if you’re more serious, it’ll be a great way to tell everybody.
00:13:20:19 – 00:13:53:25
Brooker Belcourt: Excellent. So there’s really not a lot of downside to a brand new person coming into this. You you really just can come in and test your theories. And if you’re having success, having success, you get rewarded for it, which I think is really cool because it’s like, why? Why not come in, right? Like, why not come in and and try some of these tough things and or even if you don’t want to come in and use some of your own strategies, you can start to see other strategies that are having success and start to make your own based on what these different managers are doing.
00:13:54:26 – 00:14:09:16
Brooker Belcourt: Yeah, I think it’s great. It’s totally open. But you can see everyone. It’s a transparent meritocracy. You can see who the best investors are, the best analysts on our platform, what they’re invested in, what ideas they’re that are doing the best for them. It’s really cool.
00:14:10:08 – 00:14:23:14
Brooker Belcourt: So with the initial users that you’ve had come on the platform so far and as you’re observing how they’re engaging with those. Walk us through some of the things that you’ve been noticing with the success of some of your initial users.
00:15:25:27 – 00:15:56:05
Yeah. So our best users who are performing the best, our platform there is this this small group that consistently stays in the top 10%. And this phenomenon’s called performance persistence. It’s been observed in mutual funds and hedge funds. And we noticed that if you look at the top 10% of covey in a given month, there is not a lot of churn. So the people who are great investors tend to stay great.
Want to dig deeper? Check out our articles here.
00:15:57:06 – 00:16:19:25
And that’s all. So we can predict the next top 10% with about 40% certainty, which is crazy when you imagine how sticky people are at the top of the leaderboard. And when you look at those individual people and what are they doing that makes them so good? It is so hard to tell.
00:16:21:13 – 00:16:54:29
Richard Carthon: You can’t just look and say, Oh, they are value investors or other crypto investors. They slip their crypto in the bull run. Then they went into energy and now they’re low growth. They’re they’re all over the map and they have different strategies. Some are just some are just cryptos, some are just ETFs. It’s it’s so hard to nail them down into one thing. Their track record speaks for itself, and I’m sure they’ll build a story one day about how they did this. But looking at their portfolio that’s open, uncovered, it’s so hard to discern any sort of pattern of why they are so great.
00:16:56:07 – 00:17:27:22
Richard Carthon: For sure. And another thing that you kind of mentioned earlier that I kind of just want to bring back to the forefront of there are some people out there who have aspirations of being a money manager, of owning their own fund at some point. And a lot of the times when you’re even trying to just become an analyst, to grow into being able to be a managing partner, etc., people want to be able to see track record. They want to be able to see what have you done in the past? And it looks like this is a platform that allows for that.
00:17:28:09 – 00:17:41:29
Richard Carthon: Have you seen any users who have come on your platform applied has some success and then all of a sudden they’ve been either started their own fund or got offered a position somewhere, like, have you had any of those kind of stories quite yet?
00:17:43:06 – 00:18:44:01
Richard Carthon: That’s a great question. And that’s I think the thing we’re most excited about is getting towards that level. We’ve seen people use their track records to get jobs investing. We have yet to see someone create a fund based on their track record. We’ve got about nine months to ten months of data now, and so we’ll get there for sure. And I think the way that we’ll get there is we will create a best ideas fund, and that is a product we’ll be launching in 2023, which we’re so excited about, which is pushing on that phenomenon where we see the best, investors stay the best, and taking those best investors who are really, really sticky at the top, the ones that have earned the most tokens and creating and best ideas fund that allow any retail investor to come in, download an app, deposit a thousand bucks and get access to this amazing return stream that’s been generated from this huge competition that we have.
00:18:44:09 – 00:18:53:18
Richard Carthon: So only investing in the best and we’re really excited about that. And the data is totally open and we think other people will also build really cool projects off of our database.
00:18:54:26 – 00:19:25:13
Richard Carthon: Yeah I can see that being a really successful project on and I know I’m going to be looking out for for when that’s available but kind of just stepping back, looking at the entire just space and as nascent as crypto is in the grand scheme, especially as you relate it to traditional equities market. Why do you think it’s important that the data that is being created in these in these portions and being able to drive value to what you’re observing.
00:19:27:05 – 00:19:29:16
Richard Carthon: How do you think that’s going to continue to mature over time?
00:19:30:19 – 00:19:33:01
Richard Carthon: In thinking about the industry as a whole outside of.
00:19:34:17 – 00:20:06:24
Richard Carthon: Yeah. So Tubby is playing on this phenomenon of saying, Hey, data is valuable. We all hear about data is the next foil. And when I think about that, I think, well, oil has this pricing and so actively traded. It has a market for it, but data doesn’t really have a market for it that’s accessible to a lot of people. And the biggest problem is that people contribute data to big platforms and then those big platforms take the data and sell it in close marketplaces.
00:20:06:26 – 00:20:41:24
Richard Carthon: And so the contributor of the data rarely is able to get value from those ideas. And what we’re thinking is saying, okay, why don’t we have everyone contribute the data of ideas, of trade ideas into this big database? And in exchange we’ll give you tokens for those ideas. And so it’s a data is valuable. Let’s give you tokens and we’ll figure out some market price for these tokens that are representations of your data. And I think that model of data for tokens is is going to be really big in the crypto industry.
00:20:41:26 – 00:21:08:10
Richard Carthon: And there are many examples now I think basic attention, token that in the free browser it’s a really cool concept of selling attention and time and, and even your data in exchange for tokens. I think that’s awesome. Those guys have been really sticking in the business. I think you’ll see a lot more concepts like that emerge where we try to pin down what is the market price of data and I think tokens will be a great way to figure that out.
00:21:09:12 – 00:21:41:03
Richard Carthon: I agree data is the best resource that a lot of companies can use to drive both innovation and to create stickiness for future users. How can you track and see what’s working or what people really want to use without having it? And as you continue to find a way that you can use this data and people can be rewarded and have ownership of their data and get paid for the data that they’re providing.
00:21:41:16 – 00:22:11:21
Richard Carthon: I think that’s where you’re really starting to see more and more value. So, you know, Web 1.8 is about, you know, read only Web 2.0 is read, write and then read. Web 3.0 was ownership. So while you’re providing that that that data, you can now have ownership of it and and also start getting paid for that data that you are creating. And I see this as a way that people can continue to have ownership over the vast amount of data that they’re providing to these different organizations, companies that are participating.
00:22:11:23 – 00:22:39:06
Richard Carthon: And so I think that is a really cool insight, and I appreciate you sharing that. But I mean, as we wrap up here, Matt, always like to finish with a couple of fun questions. And one that I really like to go to is with all the information that you’ve been able to learn over the many years of your money managing, being in hedge funds, everything else. And for those who have never been through either a crypto bear market or a recession or anything that’s going on with the regular markets and the crypto,
00:22:40:24 – 00:22:51:20
Richard Carthon: if you could go impart wisdom to yourself when you first got started in the space where the crypto or traditional finance like what are what are one, the three key lessons that you would impart to yourself.
00:22:53:03 – 00:22:56:02
Richard Carthon: To begin to make it through the bear market or to.
00:22:58:06 – 00:23:00:26
Richard Carthon: That’s a tricky question. I think.
00:23:03:12 – 00:23:40:19
Richard Carthon: What often happens in these bear markets is we get so emotional about the losses in our portfolio and I’m sure if anyone really is passionate about crypto, they probably started as an NFT this year to buy some some projects and the emotions of seeing a 90% loss in some of your coins can be really hard and you start to forget about all of the things that brought you into the space and in the first place. And so I think the thing that I try to do is to try to strip the emotions of it and and keep believing that is that thing that attracted us all to the space in the beginning.
00:23:40:21 – 00:24:20:21
Richard Carthon: That’s the reason you’re you’re listening to this podcast. You’ve got something that you’ve seen out there. Maybe it’s you see this huge inequality in the world when you think that same crypto can actually be an enablement to solve that. And so not forgetting all the nuts, getting all the great things that crypto’s done. And then maybe the second one is this is also an amazing time to start going into these projects and earning tokens. Tokens are super cheap right now. There’s less interest in it. So if you go to these products that allow you to earn tokens, you can start loading up and stacking tokens to a much higher degree than you would have been able to do it in the bull market.
00:24:20:23 – 00:24:47:04
Richard Carthon: And these projects we talked about, basic attention, token nothing is just still kicking around. They’ve made it through multiple bear markets. And so now this is a great time to be able to go and join them and compete for these tokens and all of these amazing uses that you learned about before. And you can still keep generating tens of tokens in terms of value and loading up your wallet for when the market does come back.
00:24:48:15 – 00:25:19:24
Richard Carthon: Yeah. I think those are two solid points. One. Sometimes you got to take the emotion out and it it can be hard. But part of that is. You will see these sharp decreases in value. But in these moments, if you’ve been looking at other opportunities now you can enter at these these prices really like you never thought you would get back to this point. And so you have really good price entry as well. So if you see products that have longevity and one that Brooke brought up was bad and again, none of this is ever financial advice.
00:25:19:26 – 00:25:40:04
Richard Carthon: But if you’re able to look at a product that has longevity and it’s been able to survive over time, and now you see an entry where it’s lower than what it was at its all time high. And it’s very clear that it’s not going anywhere. It’s it’s not a bad time to evaluate if this is a good price entry. So I think those two.
00:25:40:22 – 00:25:57:15
Richard Carthon: There’s a lot of products that give away tokens as well, like we’ll be giving away when we do eventually launch a native token, we’ll be giving away tokens. There’s tons of other projects that are giving away tokens for very small tasks. So this is a great time to try to get access to those free token. There’s less people interested in them.
00:25:58:22 – 00:26:14:27
Richard Carthon: Another great point. Go participate and go grab those free tokens while they’re there as well. But Brooker, you’ve given us a lot of really good information. Appreciate you spending time with us. Explain everything that you’re doing at a cafe. But what is the final thought that you want to leave with all the listeners here today?
00:26:15:22 – 00:26:51:06
Richard Carthon: Yeah, I would say head over to Cubby and check it out. We’re really fun investing competition that you can earn rewards in the short term and eventually maybe become a manager or even get a job out of it. And I think that’s also totally free to join. And if you’re more interested in trying to get ideas out of our database, that’s also a great idea. You can see all our data. We show it all. We show the best performing analysts what positions they’re in, really good trade ideas emerging out of that.
00:26:51:14 – 00:27:10:28
Richard Carthon: We have our top analyst section on a website. I think that’s awesome. That portfolio is up 20% this year with the market, NASDAQ down 30%. That’s one of my favorite parts is getting ideas from the community. And I think that’s just awesome to be able to everyone to generate wealth from these great ideas. And so we’re really passionate about that. And so.
00:27:12:11 – 00:27:20:26
Richard Carthon: Absolutely. Well, we appreciate that, everyone. Make sure you go and do that. One of the ways that people can connect with you and learn more about everything happening at Cubby.
00:27:21:12 – 00:27:29:27
Richard Carthon: The easiest way on video. We’re also on Twitter and we have a discord that’s both on display on our website.
00:27:30:28 – 00:27:43:09
Richard Carthon: Perfect for everyone. Make sure you go check out the community. If you have questions, make sure you reach out to broker with them. But again, we appreciate your time. Thanks for dropping all the knowledge and for everyone listening. Make sure you stay cryptocurrency.
Crypto Current will be guiding all of you who are new to the cryptocurrency world to becoming a cryptocurrency and blockchain expert. Crypto Current was founded to give access to information to everyone on current events occurring in cryptocurrency and blockchain in a digestible way. Since its creation, we have created content that impacted thousands of people through its podcast, blog, and social media.