[2020] A little stock market sense

[Brett]

Stock market at new record highs

hope it continues going up .......................

 

[easyrider]

More like "Buoyed by the Federal Treasury" imo.

Bill

 

[PamMo]

I expected a surge post-Covid, but equities are at an all-time high, housing markets are on fire, digital currency and "art" have blown into the stratosphere, SPAC's are picking up any companies that have a pulse... DH just asked me to pick a night to share a good bottle of scotch and decide where we want to put some cash.

 

[VacationForever]

For most part, we do not need to tap into our investments besides RMD each year. We just had our money manager liquidate $100K to pay for remodeling of our new home. Other than that, I don't worry about whether the market goes up or down.

 

[Talent312]

Call me a happy-camper.
I pulled $50K for a new kitchen in 2019, and the market covered my tracks.
This year, I'll pull another 50K for a sunroom, mostly w-gains made to date.

Although I'm 50-50 bonds to stock, w-interest rates so low these days,
where else can peep put their $$.
.

 

[rapmarks]

I expected a surge post-Covid, but equities are at an all-time high, housing markets are on fire, digital currency and "art" have blown into the stratosphere, SPAC's are picking up any companies that have a pulse... DH just asked me to pick a night to share a good bottle of scotch and decide where we want to put some cash.

Let me know where to put that cash. Been sitting on mine since October

 

[bbodb1]

Call me a happy-camper....

@Talent312 - Hello, Happy-Camper!

 

[bogey21]

Let me know where to put that cash. Been sitting on mine since October

Either Short Term Bank CDs or Low Duration Bond Funds. You won't get much in the way of interest but you won't be locked in when rates ultimately go up...

George

 

[Luvtoride]

Let me know where to put that cash. Been sitting on mine since October

Please don’t all jump on me, but you should look at cryptocurrency. I don’t mean just Bitcoin but there are several others to invest in as well. My wife and I have started moving some idle cash into these “coins” and several are up over 50% in a couple of weeks. Start learning about this area... you’ll be glad you did!


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[Fried_shrimp]

Please don’t all jump on me, but you should look at cryptocurrency. I don’t mean just Bitcoin but there are several others to invest in as well. My wife and I have started moving some idle cash into these “coins” and several are up over 50% in a couple of weeks. Start learning about this area... you’ll be glad you did!


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Cryptocurrency is also a product that has no actual substance. I have looked at it and it is purely a speculative market that bounces with the wind for no real reason which is why I wouldn't touch that stuff with a 10 ft pole.

 

[bbodb1]

Cryptocurrency is also a product that has no actual substance. I have looked at it and it is purely a speculative market that bounces with the wind for no real reason which is why I wouldn't touch that stuff with a 10 ft pole.

Just to add to that, I recall the derivatives market from some years ago. While the stock market (at times) is not for the fainthearted, investing in weird or obscure markets would ratchet things up on the old nerve-o-meter to (previously unreachable) heights of anxiety. No thanks from here too...

 

[am1]

Please don’t all jump on me, but you should look at cryptocurrency. I don’t mean just Bitcoin but there are several others to invest in as well. My wife and I have started moving some idle cash into these “coins” and several are up over 50% in a couple of weeks. Start learning about this area... you’ll be glad you did!


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I would rather invest it in Las Vegas. Which I don’t do.

 

[HitchHiker71]

Please don’t all jump on me, but you should look at cryptocurrency. I don’t mean just Bitcoin but there are several others to invest in as well. My wife and I have started moving some idle cash into these “coins” and several are up over 50% in a couple of weeks. Start learning about this area... you’ll be glad you did!


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Cryptocurrency speculation is not for the faint of heart. Unless you really understand what crypto is really all about - the democratization of currency and the tokenization of digital assets - all to promote the DeFi movement - then I would recommend buying into a crypto ETF. Here’s one article on a few recommended crypto ETFs:

Best Bitcoin ETFs • Benzinga

Spot Bitcoin ETFs are gaining popularity among investors. Discover the top picks for spot Bitcoin ETFs and start investing today.

www.benzinga.com

There are significant tax consequences and risks - apart from the arbitrage aspect itself - to holding cryptocurrency coins directly. If you didn’t notice the line at the top of the IRS 1040 form that appeared a couple years ago:

“At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”

If so, welcome to form 8949. Every sale transaction is a capital gains taxable event:

How to Report Crypto on Taxes in 2024

Learn how to report crypto on taxes and ensure accuracy in reporting taxable events on your 2022 return.

tokentax.co

You also have to recognize that holding coins means you are then committing to maintaining a software wallet at a minimum - which involves public and private keys for security - and potentially a hardware wallet if holding any significant amount of cryptocurrency. Many folks do not understand the criticality of wallets in the digital world - and oftentimes are targets of hackers who want to steal your coins. Quite a few folks also simply lose their security keys - after which it is difficult if not impossible to recover your wallet - meaning the coins are lost forever. Fully 20-% of Bitcoins are likely forever lost for this very reason:

Lost Bitcoin: 3.7 million Bitcoin are probably gone forever - Decrypt

Around 20% of currently minted Bitcoin are gone forever: Here's where they went.

decrypt.co

I actually hold two types of cryptocurrency - ETH and ADA - directly in wallets. But I’ve studied cryptocurrency for years and understand the value proposition as it relates to the increasing limitations, debt, trade and reserve challenges that are plaguing fiat currencies, and particularly the USD, across the globe. Most folks have little to no understanding of what is happening behind the scenes globally with DeFi and why cryptocurrencies are emerging as nextgen solutions for currency overall.


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[HitchHiker71]

Cryptocurrency is also a product that has no actual substance. I have looked at it and it is purely a speculative market that bounces with the wind for no real reason which is why I wouldn't touch that stuff with a 10 ft pole.

Same with fiat currencies really - fundamentally any fiat currency has no actual substance either - other than the confidence placed in them by the people - which if anyone hasn’t noticed - the mass devaluation of fiat currencies is an ongoing global problem. Many central banks are attempting to bring their own digital currencies to market as a result - finally recognizing the DeFi movement - but I don’t believe the future will require centralized currency models - and therefore the democratization of currency vis crypto is well under way.

Watch over the next few years as several third world countries formally adopt cryptocurrency platforms as their national currencies - and then watch as the legacy fiat currencies start to lose grasp, confidence and value on the currency markets - just how quickly things may change.


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[HitchHiker71]

Just to add to that, I recall the derivatives market from some years ago. While the stock market (at times) is not for the fainthearted, investing in weird or obscure markets would ratchet things up on the old nerve-o-meter to (previously unreachable) heights of anxiety. No thanks from here too...

Right now it’s definitely not for the faint of heart - that much is certain. Even if we assume that the democratization of currency is a certainty moving forward via the DeFi movement - that still means only a lucky few cryptocurrencies are likely to survive long term. I’ve got my guesses in place - but at the end of the day it’s anyone’s guess as to which digital currencies will emerge as winners in the DeFi wars to come.


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[bogey21]

For those interested in Crypto but without the knowledge or resources to buy it directly in wallets I recommend the Grayscale Bitcoin Trust (GBTC is the stock symbol) rather than one of the ETFs (other than the new on on the Toronto Stock Exchange). I say this because as best as I can tell all of the ETFs available in the US are a portfolio of stocks involved with crypto but don't own crypto directly...

On the other hand the Grayscale Bitcoin Trust owns only Bitcoin. It operates much like a Closed End Mutual Fund in that it trades on supply and demand for its shares not the Net Asset Value of the Bitcoin in its portfolio. Last I looked GBTC was trading at about an 8% discount to the value of the Bitcoin it holds. The way you tell if the share price of GBTC is trading at a discount or a premium to the underlying value of one share of the Trust is to divide the price of Bitcoin by 1054 and compare your answer to what a share of GBTC is selling for. Example: If Bitcoin is trading at $60,000. $60,000 divided by 1054 is $56.92. Compare this to the price of one share of GBTC to see how much discount or premium GBTC is to Bitcoin itself...

George

 

[HitchHiker71]

For those interested in Crypto but without the knowledge or resources to buy it directly in wallets I recommend the Grayscale Bitcoin Trust (GBTC is the stock symbol) rather than one of the ETFs (other than the new on on the Toronto Stock Exchange). I say this because as best as I can tell all of the ETFs available in the US are a portfolio of stocks involved with crypto but don't own crypto directly...

On the other hand the Grayscale Bitcoin Trust owns only Bitcoin. It operates much like a Closed End Mutual Fund in that it trades on supply and demand for its shares not the Net Asset Value of the Bitcoin in its portfolio. Last I looked GBTC was trading at about an 8% discount to the value of the Bitcoin it holds. The way you tell if the share price of GBTC is trading at a discount or a premium to the underlying value of one share of the Trust is to divide the price of Bitcoin by 1054 and compare your answer to what a share of GBTC is selling for. Example: If Bitcoin is trading at $60,000. $60,000 divided by 1054 is $56.92. Compare this to the price of one share of GBTC to see how much discount or premium GBTC is to Bitcoin itself...

George

The only issue I have with this approach is that the growth we are likely to see in cryptocurrency is not going to be limited to BTC. So by investing in the Grayscale trust you are exposing yourself to only one of over 2000 cryptocurrencies. But I agree that Grayscale is a good option for anyone who wants portfolio exposure to BTC.

For those who aren’t aware, BTC (Bitcoin) is a 1st generation cryptocurrency. It has inherent limits and does not have any capability to process smart contracts like the newer 2nd/3rd gen cryptocurrencies like ETH or ADA. BTC is also still a POW crypto (mining only) - with no plans to move toward a POS model via a major code fork at present - though it is expected that at some point BTC2 will become a reality. For these reasons, BTC is seen as the equivalent of gold in the current crypto world. It’s a digital store of value in other words. It has a lifetime maximum of 21mm coins in the current blockchain. Therefore, it will never be used as a democratized cryptocurrency engine.

Most of the future growth opportunities in crypto are more likely to be tied to cryptocurrencies that can process smart contracts that deliver tokenization of digital assets.

The problem with native crypto ETFs here in the US is that the SEC has not yet approved any ETF to hold actual crypto directly. There are ETFs in Europe and Canada that are on the exchanges, but not here yet:

Bitcoin Futures ETF: Definition, How It Works, and How to Invest

A Bitcoin futures ETF is like an ETF, but it doesn't hold Bitcoin as the underlying. It attempts to mimic price movements and create a security that can trade on an exchange.

www.investopedia.com

So the best one can do here in the US, as Bogey21 mentioned, is to hold an ETF that has stakes in companies that hold native crypto. Hopefully we will see approval of native crypto ETFs here in the US in 2021 - after which we will likely see demand skyrocket - which will mean major valuation spikes especially for the more established and capable cryptocurrencies.

We are already starting to see some really large companies like Apple and Tesla take BTC as a direct form of payment. The prevalence of cryptocurrencies as real mediums of payment will only increase in the months and years ahead.


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[MULTIZ321]

Tap This Little-Known Fixed Income Stream For 6.6% Yields.

Tap This Little-Known Fixed Income Stream For 6.6% Yields

The market isn’t doing fixed-income investors any favors right now.

www.forbes.com

.


Richard

 

[Brett]

The only issue I have with this approach is that the growth we are likely to see in cryptocurrency is not going to be limited to BTC. So by investing in the Grayscale trust you are exposing yourself to only one of over 2000 cryptocurrencies. But I agree that Grayscale is a good option for anyone who wants portfolio exposure to BTC.

For those who aren’t aware, BTC (Bitcoin) is a 1st generation cryptocurrency. It has inherent limits and does not have any capability to process smart contracts like the newer 2nd/3rd gen cryptocurrencies like ETH or ADA. BTC is also still a POW crypto (mining only) - with no plans to move toward a POS model via a major code fork at present - though it is expected that at some point BTC2 will become a reality. For these reasons, BTC is seen as the equivalent of gold in the current crypto world. It’s a digital store of value in other words. It has a lifetime maximum of 21mm coins in the current blockchain. Therefore, it will never be used as a democratized cryptocurrency engine.

Most of the future growth opportunities in crypto are more likely to be tied to cryptocurrencies that can process smart contracts that deliver tokenization of digital assets.

The problem with native crypto ETFs here in the US is that the SEC has not yet approved any ETF to hold actual crypto directly. There are ETFs in Europe and Canada that are on the exchanges, but not here yet:

Bitcoin Futures ETF: Definition, How It Works, and How to Invest

A Bitcoin futures ETF is like an ETF, but it doesn't hold Bitcoin as the underlying. It attempts to mimic price movements and create a security that can trade on an exchange.

www.investopedia.com

So the best one can do here in the US, as Bogey21 mentioned, is to hold an ETF that has stakes in companies that hold native crypto. Hopefully we will see approval of native crypto ETFs here in the US in 2021 - after which we will likely see demand skyrocket - which will mean major valuation spikes especially for the more established and capable cryptocurrencies.

We are already starting to see some really large companies like Apple and Tesla take BTC as a direct form of payment. The prevalence of cryptocurrencies as real mediums of payment will only increase in the months and years ahead.


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China has already implemented their 'digital' yuan

https://www.wsj.com/articles/china-...urrency-a-first-for-major-economy-11617634118

https://www.cnbc.com/2021/03/05/chinas-digital-yuan-what-is-it-and-how-does-it-work.html

 

[HitchHiker71]

China has already implemented their 'digital' yuan

https://www.wsj.com/articles/china-...urrency-a-first-for-major-economy-11617634118

https://www.cnbc.com/2021/03/05/chinas-digital-yuan-what-is-it-and-how-does-it-work.html

Yep, I’ve been tracking that as well. Many Asian countries are embracing digital currency:

Digital currencies are the future in Asia | East Asia Forum

Asian countries need to embrace digital payment technologies or they risk being left in the monetary dark ages

www.eastasiaforum.org

The way I see it - the calculated bet looking into the future is on companies that are offering up products and solutions that democratize their segment. This includes currency. For the past 80 years we have built solutions for certain segments of our society that embraced a centralized model. Then the internet came along - which itself is a democratized solution - the great equalizer - providing unlimited data sources and capabilities to everyone with access. As of Jan 2021 - 60% of the worlds population has internet access, and 93% of that access is via mobile devices:

Internet and social media users in the world 2024 | Statista

How many people use the internet in 2023? Several billion individuals who have access to the internet are social media users too.

www.statista.com

As an aside, for anyone wondering why the new Club Wyndham website caters to mobile devices - this is the answer.

As access to the internet continues to grow - more and more industry segments will pursue democratization efforts. This includes areas of our economy that for the past 80+ years have largely embraced a more centralized model. Areas such as energy, transportation, currency, banking, immigration, suffrage, and the list goes on. For those of us who have lived through much of the past 80 years - this all sounds out of this world - but is more likely to happen than to not happen. Those who are investing with this in mind - stand to make a ton of money in the process.

Need some evidence? Look at the growth in cryptocurrencies. Look at the growth of Tesla - who is focused on democratization of energy and transportation - and soon to come - HVAC (yet another segment). It’s a brave new world out there folks - invest with that in mind.


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[MULTIZ321]

Bitcoin: China Has Launched a Digital Yuan. And it Will Change Everything.

Bitcoin: China Has Launched a Digital Yuan. And it Will Change Everything

When the dust settles, and China and the U.S. and its allies battle it out for control of the supreme digital payment platform, Bitcoin holders will be left holding the bag. Here's why.

seekingalpha.com

.


Richard

 

[Luvtoride]

Hitchhiker and Bogey,
Very well said on your various posts above explaining the workings, use and adoption of Cryptocurrency around the world.

I don’t think that any explanation here will convince someone to invest in this area but for the curious it should lead to further research and understanding about these changes coming to the world economy.

Another example of this is how PayPal and MasterCard among other big payment processors are adopting Bitcoin in order to “offer” it as a payment option to vendors using their services. Making Bitcoin into a more easily accepted form of payment will hasten its wider adoption into the mainstream.

On my recent vacation in Aruba, one restaurant accepted Bitcoin for payment. Although it might end up being the most expensive breakfast I’ll ever buy (when the value of Bitcoin increases multiple times in the future) it was well worth the experience to use my Bitcoin wallet to pay for something in an easy, fast and secure transaction.


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[SmithOp]

Big day tomorrow, anyone buying Coinbase?

 

[Brett]

Big day tomorrow, anyone buying Coinbase?

Not me, I believe in block chain technology but COIN as an investment --- maybe a very small % of one's portfolio allocated for 'speculation'
I imagine it will be a wild ride

 

[MULTIZ321]

Today is the biggest day yet for the crypto world.

Today is the biggest day yet for the crypto world

Your five-minute guide to what's happening in tech this Wednesday, from the stakes facing Coinbase's direct listing to a new bill designed to curb the power of NDAs.

www.protocol.com

.


Richard