For example, let’s say you had $10k and you planned to travel internationally but you didn’t know where you were going to go yet. You wanted to preserve the buying power of that $10k relative to some currency that hadn’t been identified yet. Your best bet would be to split it into a variety of currencies so that their relative value motions tended to cancel one another out. When you left for your trip you could convert it back into the currency of the country you had decided to visit. Now, how should you split up the money in the meantime? Should you put 40% of it in US Dollars and only 1% in Norwegian Kroners because that happens to be the percentage of global wealth held in each of those currencies at the time? No, of course not. If you did that, you would remain highly volatile based on the motions of the US Dollar. In this case, the “market cap” of the currencies is irrelevant to your purpose. Instead you should:

1. Decide how many currencies you can efficiently diversify across before the expenses and hassle significantly erode the value of diversification.

2. Identify a number of currencies that have demonstrated the lowest possible correlation to one another, yet without underperforming over the long haul.

3. Diversify *equally* across each of your chosen currencies.

Kyle is doing the same thing here.