In the Spring of 1998 I was having lunch at an outdoor restaurant in Stockholm Sweden, while on break from a Wall Street analyst meeting. As I was about to enjoy another bite of crispbread, I watched a guy walk up to a vending machine, point his phone and click - a pack of cigarettes dropped out. I put my food down, literally rubbed my eyes and turned to my colleague next to me and asked incredulously, “Did you see that?” My associate was too busy gawking at the natural blonde women at a table across from us, so I was left with my own thoughts: Why can’t we do this back in the United States? Obviously, this is universal technology, how can Sweden be so far ahead of us?
There's a famous story about how Joe Kennedy (John F.’s father, who was ruthless and manipulative as he was wealthy) avoided the 1929 stock market crash. He said that when his shoeshine boy gave him some stock tips, he knew it was time to get out. I believe Joe had a bit more inside knowledge that instigated his timely exit before the greatest meltdown in stock market history. So, a question before us is, should we pay attention to what ‘certain’ investors or institutions do with their money? I will argue yes, but let’s come back to this in a bit.
I’m typing this blog after the market close on Friday with the Dow and S&P up fractionally and the NASDAQ off slightly. Wall Street not only had the entire day to chew on Hurricane Harvey news, but I will tell you that they had information much sooner than what you’ve been witnessing on the television Friday afternoon... and it didn’t spin the market into a sell-off. Why? We’ll get to that in a second, but let’s focus on Harvey for a moment.
Sorry, that decison has already been made for you.
I ended the last blog with the question: “Should you take a bite of Bitcoin?” To answer that, I believe it will be helpful to provide some context in several areas: Expensiveness, Long-term Viability and Better Mouse Trap.
The first vinyl music record was made in 1951 by inventor Ewing Dunbar Nunn. Dictaphone Corp introduced the first magnetic tape cassette in 1957 and the 8-Track cartridge, later replaced by the compact cassette carried us through to 1982 when the first Compact Disc became available. In 2001 Apple Inc. launched the iPod, moving us to digital and now we listen to our favorite songs via streaming Apple Music, Spotify, Pandora and Rhapsody.
So, in 50 years we’ve gone from listening to music on a 12-inch vinyl plate to all of our tunes being in the cloud. Why do we still walk around with dollar bills, ATM and credit cards?
I first recommended Bitcoin as a hedging investment in my January 2015 Position Paper. At that time it was priced at $288 and I suggested buying while under $350. Today it stands at $2,709. That’s an 841% return in 2 ½ years. Bet your kicking yourself now…
agen∙da: an underlying often ideological plan or program
I want to continue to build on the theme over the last several blogs with regard to understanding what’s going on in the bond market in relation to the stock market. The stock market is the tuxedo wearing, glamor star who upon walking in the room causes everyone’s head to turn. It did again this week…more records on the Dow, S&P 500 and NASDAQ.