Lisk For Investors #8 – $0.11 – $0.50 Price Prediction For LISK In 2016

Tai Zen: I do my price predictions based on charts so there isn’t a chart that I really can’t predict the price of it just yet. We’re gonna rely on your fundamental analysis and your evaluation.

Leon Fu: So the way we can value this is we can value this base on what the market value similar things. One way to put a valuation on it is relative valuation. This is in the stock market too.

Tai Zen: Let’s do an example of a stock that everyone is familiar with how you do the valuation on that and then we’ll switch it over and do the one for Lisk. That way the audience will know what we’re talking about because remember if we talk about something they don’t know about, then it’s not going to make any sense.

Leon Fu: Let’s take an example. Let’s look at some something that’s been traded for a while. Let’s look at Google, Google hasn’t been out for a while.

We know the concept of PE, we know the concept of Price to Earnings ratio, in the stock market you hear about the PE is a statistic that’s quoted very common. But it’s important, you might not care about it because you just look at the charts, but from fundamental analysis, it tells you what investors are willing to pay for a company at any given moment.

So if you look at a price-to-earnings ratio, what that number means is how many dollars investors are willing to pay for a dollar of earnings of that company. So if you take a company like General Motors, the company that the market values GM at 9, I’ll give it a PE of 9, which means that the market is willing to pay $9 for every dollar of GM’s earnings. That’s something for like old-established traditional companies, that’s typically like revocable they get.

Tai Zen: So it’s about 9 or 10 times the earnings.

Leon Fu: So the stock price divided by the earnings, you get a multiple about 10.

Tai Zen: The listeners know what the average is, so it’s around 10 times.

Leon Fu: I think like the S&P 500 Fraser, an average of 18 or something like that, 15 to 18 for historically. I don’t know what it is right now, but 15 to 18 like when we were at the peak of the bubble, that got as high as likely 5 and when you’re in a depression, it can get down to it like 9.

At the long-term average tends to be around 15 to 18, something like that. When Google came out in 2004, they came out at 50 multiple. In other words, the market was willing to pay $50 for every dollar of Google.

So the question you would ask yourself why is the market willing to pay $50 for $1 of Google’s earnings and only say $10, $9 or $10 for $1, it’s the same dollar profit. So why is it that for say, GM, the market is only willing to pay $10 but a company like Google, the market is willing to pay $50?

Tai Zen: Because at that time, they believed that it had more potential.

Leon Fu: Because some PE is looking at the past, the PE is looking at the way you calculate PE was for the past 12 months. How many dollars did you earn? Their company earnings per share divided by the stock price, the stock price divided by their earnings for the last year.

That’s a backward-looking number, it’s telling you what has been. It’s based on the facts that have already happened. That’s not how to stock trade.

Stock trade based on what the market believes the future is going to be, not based on what has already happened. It’s based on what the market thinks is going to happen.

Tai Zen: So when I’m trading, if you pull up a GE stock or GM stock or Apple stock, I’m trading it based on where I expect it to be.

Leon Fu: Exactly, so the market is saying basically that I’m going to pay $50 for a multiple of 50, because I thought the market believe Google is going to grow a lot faster than say, General Motors. In 2004, it actually did. In fact, if you paid 50 times earnings, they said the forward multiple would actually, you know, from 2004, what actually ended up happening was you are actually only paying $6 for what was what happened in the future.

There’s no way you could have known in 2004 but the next year you actually paid something like it was cheaper than anything like even paying 50 times earnings for Google was less than anything you could have bought, that’s why Google has outperformed so much. That’s one way to look at valuation, are you can say what is the multiple of Google or Facebook versus Uber or any other tech company.

I have a friend who gave me this example. He said I can open a trucking company like he’s trying to do something like Uber for construction vehicles, and he’s saying that I could open a traditional cement or trucking company.

Let’s say I built this business and it makes $1 million a year and I wanted to sell it, I could probably only sell it for between 1 and 2 million dollars if it made $1 million a year and I want to sell the company, I probably only sell it for more than a few million dollars. But if I make a tech company, let’s say I make an Uber for dump trucks, a trucking tech company that is based around and apps like Uber, because Uber is basically a taxi company but they don’t own any taxis, they just own an app.

If I built just as an app for dump trucks and I built this business that it made $1 million a year just like I built a traditional company as he said, I could sell this company for $20 million, not for 2 or 1. And I was just like why? Why you’re building a trucking company and just because this tech company has an app, you can sell it for 20 times the profit versus if you just ran a trailer? And he’s like well I don’t know why that’s just what the market says.

So going back to Ethereum and Lisk, you can see that it should start off at $7 million valuations if Lisk were to start trading right now, let’s say they issued the coins and put it on an exchange. Theoretically, if investors were willing to give them 14,000 Bitcoins for 85 million Lisks, it should start off at $7 million valuations, around 7 cents as you put in that number because they haven’t sent the money yet, they’ve just started.

So theoretically, this should just create at around $7 million. Now Ethereum, when they actually launched the network and had all the features, you can remember that they started at $1.

Tai Zen: I would say that the first 3 days don’t count. I would even say as far as the first week, the first launch, the first pump, and the first dump, none of that counts. I would say that there’s going to be a pump and then 1 cycle of pump and dump, and then I’ll look at what the current prices.

We’re gonna get a real market price but you have to wait until the dust settles because exchanges are trying to figure it out. Just a few days ago, when BitFenix announced that they were going to start trading Ethers. If you look at their charts, there’s like a massive crash from 50 mils a bit all the way down to 25, 26 mil a bit or whatever it was, and then it went to 30.

But if you look at the charts, if you did not know, you would think that it started out at 50 mils a bit and crash all the way down. Somebody has to make the first trade, somebody has to put the first order in so there’s all kinds of BS that happens, just technical stuff that has nothing to do with anyone.

Leon Fu: So we can put Lisk with things that are like Lisk, we can value Lisk. I would say Lisk is like Ethereum, it’s like MasterCoin.

We give them credit for that partnership with Microsoft. We give them credit for the amount of money they’ve raised.

Tai Zen: I won’t give them the credit for the amount of money they raised. In my mind, it’s hard for me to give them the same caliber of coders as the other.

Leon Fu: The market’s not giving them that, the market’s valuing them at 7 million not 18 million. On the other hand, when Ethereum raised that money, they didn’t have a network launched, it wasn’t like another year before they started trading.

Because Lisk is a copy of Crypti, Crispy has already done a lot of development. This is mainly going to be a marketing effort, they’re further along in their development then Ethereum was when they did their crowd sale.

Tai Zen: I actually created a video already in case anyone’s interested. I talked about the timeline, what my projections are on the timeline.

Leon Fu: If they launched a network if they have the features that they say they have which is basically this features Crypti says that, then I can see this opening at around 40 to 80 million dollars. Base on the fact that Ethereum has none of that, they just launched the Mist wallet. There’s really not a lot of infrastructures yet with Ethereum and it’s turning at a billion but over the summer, I think that Crypti is about where Ethereum was in terms of adoption from a technical standpoint.

They probably were further along than when Ethereum launched last summer. If your name what was trading at a $70 million market cap and had nothing, it was like a frontier, was barely worked. We were even scared to move our Ethers because we were scared of messing up.

Tai Zen: You were one of the top developers, iOS developers in the world and when you said hey man I don’t want to touch this because it’s so unstable, I’m like man, if you were the top iOS developers and you’re afraid to touch it, I’m like man I am not going to touch mine.

Leon Fu: I don’t think that’s going to happen with Lisk because Crypti has been around almost a couple years now, so that’s not gonna be an issue. They probably get something running, they probably have a lot of the stuff already working, it’s been in development for a couple of years. I feel with Lisk, it’s going to depend a lot more on marketing and partnerships and adoption.

My sense is that a lot of that 5 million is going to be used to do promotion and to create partnerships and do a lot of evangelism, developer evangelist, to convince developers to develop for the platform. This is a case where I agree with you, I think that it’s going to like where the market trade, and remember like if Ethereum got the valuation it was because of marketing, a lot of it had to do with marketing.

Tai Zen: I am just a strong believer in just marketing. If you happen to have a good product, it’s even better, it makes the marketers in the sale good easier to market and sell it.

Leon Fu: That’s really the problem of Bitcoin because Bitcoin had horrible marketing, no marketing in Bitcoin, it’s amazing how far it’s gotten without any marketing.

Tai Zen: It started as a grassroots movement and it started to grow, the fact that it got up to a point of 12 billion at one time when you and I first got involved into it. That’s amazing in itself to show that it was purely just a product that did all the marketing, there were no sale people, no marketing people even do it.

Leon Fu: But imagine if there were if Bitcoin had a real sales team at Satoshi Nakamoto was a real person if we knew who he was and they didn’t get the bad reputation that it did with MacOs and Silk Road. Even if there was just a half-assed marketing effort in their kind, imagine it wouldn’t be at 6 billion, it would be at 60 billion.

Tai Zen: So you’re saying that based on your projections, you feel that right after the ICO, it’s worth 7 million but you can easily see that it’s going to be between 30 to 40 million.

Leon Fu: So number one, how well they do the marketing. Max, he doesn’t seem to be a technical guy, he seems more of a sales and marketing guy. So I would say in the short run, it’s going to be how much buzz, how much hype he can generate.

He’s already done a lot with this Microsoft field. But going forward is going to be can he get the developers, can he get developers to develop apps, to develop applications on the platform. And number two, can he recruit developers to come to develop the platform further.

He’s got $5 million, some of it’s going to go to marketing. Probably half or more of it is going to go towards engineering to build out the road map, it really depends on can he executes. It’s his game to lose at this point.

Tai Zen: How about we do a worst-case scenario and an average case scenario and a best-case scenario, or just 2? Let’s just say the minimum valuation that you have, bare minimum?

Leon Fu: I think you can get up to like what Dash did worth right now, like 37 million right now. Even Made Safe is still vaporware, there’s no product on Made Safe, I don’t know a great deal about that, but I know they have a single Safecoin and it’s kind of like storage.

Tai Zen: They have been there more than several years, they’ve been at it before Bitcoin even came out.

Leon Fu: They’ve been at this since 2006, it’s been 10 years. I think when they started, they still have nothing. Why are they out of $42 million valuations?

Tai Zen: So you’re saying that the minimum, the bare minimum that Lisk should be evaluated at is 30 million. So Dogecoin is at 22 million and NXT is at 8 right now. Everyone agrees that Dogecoin is just a joke, let’s just look at the absolute worst-case scenario that Lisk is just half that joke which would put it at $11 million valuations.

We just said we’re just looking at it like just a bonehead case scenario here, the market is just so retarded that the market can’t tell that it worth as half as much as a joke of a Dogecoin. So let’s do it real quick I got the trusty old calculator right here. So if we take 11 cents minus 7 cents that everyone paid for it, that’s a gain of 4 cents divided by 7 so that means that at the bare minimum everyone, all the investors are going to make 57% return.

That’s the minimum. Now let’s just say that it goes up to the 30 million valuations that you project, but let’s call up the average valuation based on Factom, based on the vaporware Made Safe and all this other stuff.

Leon Fu: Factom is not vaporware, but only has a $14 million valuation right now.

Tai Zen: Let’s just say that it reaches that 30 million average valuations that you’re talking about. If you take 30 cents minus the 7 cents, it’s almost four times your money so, at minimum, it would be as 57% return for the investors.

On average, you’re projecting that it’s going to be 400% return, 400% profit for the investors. Let’s say that a really good scenario. You’re saying that if it’s even half what Ethereum is.

Leon Fu: Ethereum, let’s call it a dollar. So 80 million would put it like right behind Litecoin. Litecoin is at number 4.

Litecoin is at $145 million, it is just ahead of Made Safe. That would mean it would open at number five on the coinmarketcap list that would be 50 cents, this is really easy because there are only 100 million Lisks. It would be 50 cents, almost 700% returns.

So I think it’s somewhere around there. As you said, it depends on how well I’m tuning and the partnerships go and how much bucks they create. I think that’s going to drive where this thing ends up.

Tai Zen: So are you going to go on record right now? Is the Warren Buffett of Cryptocurrency going to go on record right now and make a prediction of bold prediction that Lisk is going to go anywhere between all the way we say was 11 cents to an average of 30 cents to a high of 50 cents?

Leon Fu: I would go on record and saying that will end up somewhere most likely if we don’t at least start at 11 cents that means they really screwed up something. They’ll get 11 cents if they do anything at all if he does anything with that $5 million.

Tai Zen: So now, if it goes to average around 30 cents and then really good would be 50 cents. So now we get the price projection down at 11 cents, 30 cents and 50 cents. Now, what is the time frame that you’re looking at?

Leon Fu: This is based on after the launch and when the trading settles down. That’s the number I’m talking about.

Tai Zen: Just to be safe, I’m going to give you this. I’m going to give you 2 pump and dump cycles before that settled. So we’re talking about the 11 cents, we’re talking about the 11 cents or 30 cents in the 50 cents have 2 pump and dump cycles just so the market levels out.

Leon Fu: I feel the level out between 11 and 50 cents. Some cycles maybe 1 month or 2, 1 or 2 months after it launches. I would say the time frame is 2 months after they start trading on the next 1 to 2 months.

Tai Zen: It can’t just be when it’s available for trading, it has to be on a major exchange that nobody can give access to. So we would have to say it would have to be on like maybe Poloniex or Kraken or a BitFenix or something.

Leon Fu: On Coinmarketcap, they list the exchange like that, at least it looks like the top exchanges are like BitFenix, depends on like Poloniex, some of the Chinese exchanges. If they get listed on a Chinese exchange, that will be a big boost too, that’s going to be a major.

I think if I were Max, we’re doing marketing, I’d be in China right now trying to get it listed on a major Chinese exchange, double the market cap alone if he does that. Because it’s done it for Factom, if I was doing the marketing, the first thing I do is take a flight to China and try to get it on a Chinese exchange.

Tai Zen: I’m almost certain that Max and Oliver will be listening to this.

Leon Fu: I’m just saying that because it’s happened before, I’m just saying that because it’s happened every time. A coin gets listed on a major Chinese exchange, it pops. Do you see that? That’s something where I’m looking for this thing to go.

Tai Zen: So you got your price projection down for Lisk, you got the time frame. Well, the time was not clear, we both agreed that we have to wait for 2 pumps and dump cycles for the price to level out before we can end. So one is that the 2 pump and dump cycles go through for the dust to settle.

Number two, it has to be listed on a major recognized exchange. Then the time would be from that point on after those 2 criteria. Are you saying the time will be, 90 days? I think that’s a safe bet.

Leon Fu: As I said, it has to do a lot with what Max does. It’s not like I’m going to be paying the price, it’s in his hands at this point, here the balls in his court to make this happen. The crowd has given him a big opportunity here.

Tai Zen: If he listens to the Warren Buffett of a Cryptocurrency investing, then those numbers will hit. Now, what happens? Let’s just say that in an average scenario as you said, it reaches a 30 cents market cap, that will give them plenty of funding to ensure the success of the project.

Leon Fu: They will because they still got 15 million Lisks, 30 cents times 15 million will give him another $4.5 million. So he’d have about $10 million to work with, that should be like 5 to 7 years of funding.

Tai Zen: If it goes up to the 50 cents if he gets it on the exchange as you suggest, and then give it up to 50 cents, then for sure, they’re going to have about probably close to $10 million then. They’ll be able to hire the Warren Buffett of Cryptocurrency investing with that, that’s important.

So we talked about the price projection and the time projection and we also threw out there what needs to be done to get it up to those price points. So hopefully they listened to what we discuss and take action on it.

If you are listening to this and you like what and I are discussing, make sure you give us a thumbs up, leave your questions and comments below and let us know what you think about price projections there. Now after they start trading and there’re charts available, then that’s where I’ll take over and then I’ll do my price projection than the time projections.

But right now, there’s no chart for me to look at so we’re going to rely on the Warren Buffett of Cryptocurrencies here. Alright, so give us a thumbs up and if you haven’t subscribed to our channel yet, make sure you do and we’ll catch you in the next broadcast.

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