- Joined
- 8 June 2008
- Posts
- 13,102
- Reactions
- 19,265
My orders might go thru..been waiting for a while
Start of the crash we needed to have?gold might be a bargain soon
February 2025
- Thread starter ducati916
- Start date
Start of the crash we needed to have?gold might be a bargain soon
- Joined
- 8 June 2008
- Posts
- 13,102
- Reactions
- 19,265
Btc etf purchased.My orders might go thru..been waiting for a while
Start of the crash we needed to have?gold might be a bargain soon
I believe the other orders on the crypto exchange might have been filled as well
Let the show begin
- Joined
- 13 February 2006
- Posts
- 5,175
- Reactions
- 11,872
Markets having a moment:
Pretty much USD up
Everything else down
jog on
duc
Pretty much USD up
Everything else down
jog on
duc
- Joined
- 13 February 2006
- Posts
- 5,175
- Reactions
- 11,872
Tariffs:
Canadian hockey and basketball fans are booing the U.S. national anthem at games. Liquor stores in Ontario are taking American booze off their shelves. Do you know what it takes to make Canadians this mad at you?
Why it matters: It takes a trade war, apparently. And regardless of whether Trump's promised tariffs go into effect, Canadians' newfound open hostility to the United States is an example of the longer-term economic risks at play.
Between the lines: As the U.S.-China relationship has become more hostile over the past decade, Western companies have looked for ways to decrease dependence on China. A frequent solution offered by the corporate class was "friendshoring."
The bottom line: There's no such thing as friendshoring if you don't have any true friends.
Cullen Roche:
1) The Lifetime of Stocks isâŠShrinking.
I loved this chart from Bank of America which shows the average lifespan of companies in the S&P 500 since 1960. The message from the bank is that incumbent firms are being disrupted much more rapidly. And itâs true. Many of the largest firms we all know of today did not even exist 20 years ago. This is good and bad.
Higher turnover means we have a faster pace of what Schumpeter called âcreative destructionâ. That means new entrants are innovating quickly and knocking off stale incumbents. Itâs bad in the sense that this makes stock picking a lot harder because you canât just buy and hold firms you expect to be around for decades.
But the thing I really like about this chart is that, despite the shrinking lifetime, that lifetime is still extremely long at 18.3 years. We spend so much time talking about the stock market on a daily, weekly and annual basis, but this data shows that stocks are, at a minimum, multi-decade instruments. This is what I try to communicate with the Defined Duration investing strategy. Stocks are inherently long-term instruments and they need to be utilized in a portfolio in a manner consistent with long-term thinking. That means thinking in truly long-term time horizons across decades and not years. This is why I always ignore short-term market narratives about the stock market. No one knows what stocks will do in the short-term because you cannot make a long-term instrument behave like a short-term instrument no matter how much you trade it.
2) Bitcoin Going to $0?
Gene Fama kicked the Bitcoin hornetâs nest this week when he appeared on a podcast and predicted that it would go to $0 within the next 10 years. I think this prediction is likely to be wrong and indicative of the academic sort of thinking that most traditional financial theorists utilize. The thing is, from an asset pricing perspective, an asset like Bitcoin is virtually impossible to value. In traditional finance we like to use things like discounted cash flows or similar cash flow based metrics to value an asset. We assign multiples of revenue, EBITDA, etc. But when an asset doesnât generate cash flow it becomes difficult to value.
Bitcoin is more like a piece of fine art than a cash flow generating corporation. And to value something like a piece of art you need a more subjective asset pricing model. Personally, I donât have a strong opinion on that as it pertains to Bitcoinâs specific price and the primary use case I consider with Bitcoin is fiat currency insurance. That is, if you live in a 3rd world country where the risk of currency collapse is high then owning something like Bitcoin makes a great deal of sense. If youâre an American using the worldâs reserve currency I donât think that argument is nearly as compelling. But I find it very compelling from the perspective of any 3rd world economy, especially those with unstable authoritarian economies. What is insurance worth to someone? Thatâs a super personal question and one that an asset pricing model isnât going to help you quantify.
But $0 is an extreme sort of prediction. And it misunderstands the huge underlying infrastructure and network effect that has developed around Bitcoin. This isnât merely something trading on pure speculation. Thereâs now a trillion dollar infrastructure in Bitcoin mining, embedded (incentivized wealth) and regulatory apparatus that utilizes this asset. None of that means it canât fall significantly and given its history it wouldnât be remotely surprising if it falls 80%+ at times, but for it to go to $0 youâre talking about the collapse of the entire global Bitcoin mining industry, the now billion dollar ETF structure and a complete and total collapse in the confidence that supports this asset. Could that happen? I guess it could in an environment where, for instance, the power grid went out forever, but the probability of that happening in the next ten years is extremely remote in my mind.
Of course, whether any American should own Bitcoin as fiat currency insurance is a whole other questionâŠ.Fama would probably disagree with my framing of it as fiat currency insurance, or I supposed heâd prefer other assets to insure that risk, but I guess thatâs why I donât consider myself a disciple of Modern Portfolio Theory.
3) The Return of the 2010s?
One of my dominant themes over the last few years was the theory that the post-Covid economy would eventually mean revert right back to the pre-Covid economy. In other words, once the dust settled on Covid and all that stimulus, I expected the economy to start looking a lot like it did in the period from 2015-2020 when inflation was low and growth was low, but stable. That was a perfectly good environment, despite the low growth. In fact, Iâve argued that low and stable growth is better for a big economy than experiencing high and unstable growth.
We got a pretty interesting piece of data this week in the GDP report which I believe is starting to confirm this. RGDP came in at 2.3% which was almost perfectly in-line with the average GDP we saw since 2010. So, we already know that inflation has moderated almost to the Fedâs target and now weâre seeing GDP readings that are more consistent with the pre-Covid period.
But the primary takeaway from this developing trend is that this environment isnât the return of the 1970s. Itâs actually looking like itâs not remotely close to the 1970s. And more recently weâve heard comparisons to the late 90s. But that was a true economic boom with average RGDP of 4.1%. This also doesnât look like that. So, in my view the return of the pre-Covid economy looks to be well on track. And thatâs not necessarily a bad thing. Of course, the curveball in all of this could be Trumpâs economic agenda. The tariffs combined with significant government spending cuts create some downside risk to this forecast. But weâll have to wait and see how much of this is negotiating bluster and how much of it is real.
So do you buy-the-dip?
Really, who knows, just I chop zone.
But if there is no follow through to today's close from the bears, then I think we trade higher tomorrow, but that $601 range on SPY is a major resistance point currently. That is the line in the sand. Get past that, we go higher.
Silver News:
Tariffs on US imports from Canada (25%), Mexico (25%), and China (10%) began February 1, 2025.
In 2024, the US imported 4,200 tonnes (135 million (M)) oz. of silver and using the latest available data from 2020 to 2023, approximately 44% of US silver imports came from Mexico and 17% came from Canada according to the US Geological Survey.
The 82M oz. imported annually from Canada and Mexico is now incentivized to be sourced from other cheaper sources.
As 70% of silver mine production is a minor byproduct of the mining of other primary metals, mine supply of silver from other countries simply cannot respond quickly to added silver demand irrespective of the price of silver.
Blackrock Inc. that operates the worldâs largest silver Exchange Traded Fund (ETF) in the âSLVâ iShares Silver Trust also merits close observation.
Figure 1 - Donald Trump Receives Gold Bullion Building Lease Payment - Sept. 15, 2011; photo source: Associated Press
jog on
duc
Canadian hockey and basketball fans are booing the U.S. national anthem at games. Liquor stores in Ontario are taking American booze off their shelves. Do you know what it takes to make Canadians this mad at you?
Why it matters: It takes a trade war, apparently. And regardless of whether Trump's promised tariffs go into effect, Canadians' newfound open hostility to the United States is an example of the longer-term economic risks at play.
- There are estimates floating around on what the new import taxes mean for GDP and inflation, but the numerical details miss the point.
- This will prove a very difficult bell to unring and points to a new era in which businesses cannot count on any country to be a permanent partner of the United States.
- An extended trade war would prove costly for specific sectors, including U.S. automakers (who rely on supply chains that crisscross North American borders), homebuilders (who use Canadian lumber and gypsum) and agriculture (fertilizer).
Between the lines: As the U.S.-China relationship has become more hostile over the past decade, Western companies have looked for ways to decrease dependence on China. A frequent solution offered by the corporate class was "friendshoring."
- The idea is to shift supply chains toward countries with deep, stable relationships with the United States.
- The trade relationships with Canada and Mexico have been viewed as the most stable of all, built upon the North American Free Trade Agreement enacted in 1993 and an update of it, the U.S.-Mexico-Canada Agreement, signed by Trump five years ago.
- That embrace of North American trade, combined with the Biden administration's emphasis on friendshoring and deepening relationships with allies, gave a green light to companies looking to invest further in a North American supply chain.
- But now, Trump has pushed toward higher tariffs on imports from Canada and Mexico than from China.
The bottom line: There's no such thing as friendshoring if you don't have any true friends.
Cullen Roche:
1) The Lifetime of Stocks isâŠShrinking.
I loved this chart from Bank of America which shows the average lifespan of companies in the S&P 500 since 1960. The message from the bank is that incumbent firms are being disrupted much more rapidly. And itâs true. Many of the largest firms we all know of today did not even exist 20 years ago. This is good and bad.
Higher turnover means we have a faster pace of what Schumpeter called âcreative destructionâ. That means new entrants are innovating quickly and knocking off stale incumbents. Itâs bad in the sense that this makes stock picking a lot harder because you canât just buy and hold firms you expect to be around for decades.
But the thing I really like about this chart is that, despite the shrinking lifetime, that lifetime is still extremely long at 18.3 years. We spend so much time talking about the stock market on a daily, weekly and annual basis, but this data shows that stocks are, at a minimum, multi-decade instruments. This is what I try to communicate with the Defined Duration investing strategy. Stocks are inherently long-term instruments and they need to be utilized in a portfolio in a manner consistent with long-term thinking. That means thinking in truly long-term time horizons across decades and not years. This is why I always ignore short-term market narratives about the stock market. No one knows what stocks will do in the short-term because you cannot make a long-term instrument behave like a short-term instrument no matter how much you trade it.
2) Bitcoin Going to $0?
Gene Fama kicked the Bitcoin hornetâs nest this week when he appeared on a podcast and predicted that it would go to $0 within the next 10 years. I think this prediction is likely to be wrong and indicative of the academic sort of thinking that most traditional financial theorists utilize. The thing is, from an asset pricing perspective, an asset like Bitcoin is virtually impossible to value. In traditional finance we like to use things like discounted cash flows or similar cash flow based metrics to value an asset. We assign multiples of revenue, EBITDA, etc. But when an asset doesnât generate cash flow it becomes difficult to value.
Bitcoin is more like a piece of fine art than a cash flow generating corporation. And to value something like a piece of art you need a more subjective asset pricing model. Personally, I donât have a strong opinion on that as it pertains to Bitcoinâs specific price and the primary use case I consider with Bitcoin is fiat currency insurance. That is, if you live in a 3rd world country where the risk of currency collapse is high then owning something like Bitcoin makes a great deal of sense. If youâre an American using the worldâs reserve currency I donât think that argument is nearly as compelling. But I find it very compelling from the perspective of any 3rd world economy, especially those with unstable authoritarian economies. What is insurance worth to someone? Thatâs a super personal question and one that an asset pricing model isnât going to help you quantify.
But $0 is an extreme sort of prediction. And it misunderstands the huge underlying infrastructure and network effect that has developed around Bitcoin. This isnât merely something trading on pure speculation. Thereâs now a trillion dollar infrastructure in Bitcoin mining, embedded (incentivized wealth) and regulatory apparatus that utilizes this asset. None of that means it canât fall significantly and given its history it wouldnât be remotely surprising if it falls 80%+ at times, but for it to go to $0 youâre talking about the collapse of the entire global Bitcoin mining industry, the now billion dollar ETF structure and a complete and total collapse in the confidence that supports this asset. Could that happen? I guess it could in an environment where, for instance, the power grid went out forever, but the probability of that happening in the next ten years is extremely remote in my mind.
Of course, whether any American should own Bitcoin as fiat currency insurance is a whole other questionâŠ.Fama would probably disagree with my framing of it as fiat currency insurance, or I supposed heâd prefer other assets to insure that risk, but I guess thatâs why I donât consider myself a disciple of Modern Portfolio Theory.
3) The Return of the 2010s?
One of my dominant themes over the last few years was the theory that the post-Covid economy would eventually mean revert right back to the pre-Covid economy. In other words, once the dust settled on Covid and all that stimulus, I expected the economy to start looking a lot like it did in the period from 2015-2020 when inflation was low and growth was low, but stable. That was a perfectly good environment, despite the low growth. In fact, Iâve argued that low and stable growth is better for a big economy than experiencing high and unstable growth.
We got a pretty interesting piece of data this week in the GDP report which I believe is starting to confirm this. RGDP came in at 2.3% which was almost perfectly in-line with the average GDP we saw since 2010. So, we already know that inflation has moderated almost to the Fedâs target and now weâre seeing GDP readings that are more consistent with the pre-Covid period.
But the primary takeaway from this developing trend is that this environment isnât the return of the 1970s. Itâs actually looking like itâs not remotely close to the 1970s. And more recently weâve heard comparisons to the late 90s. But that was a true economic boom with average RGDP of 4.1%. This also doesnât look like that. So, in my view the return of the pre-Covid economy looks to be well on track. And thatâs not necessarily a bad thing. Of course, the curveball in all of this could be Trumpâs economic agenda. The tariffs combined with significant government spending cuts create some downside risk to this forecast. But weâll have to wait and see how much of this is negotiating bluster and how much of it is real.
So do you buy-the-dip?
Really, who knows, just I chop zone.
But if there is no follow through to today's close from the bears, then I think we trade higher tomorrow, but that $601 range on SPY is a major resistance point currently. That is the line in the sand. Get past that, we go higher.
Silver News:
Tariffs on US imports from Canada (25%), Mexico (25%), and China (10%) began February 1, 2025.
In 2024, the US imported 4,200 tonnes (135 million (M)) oz. of silver and using the latest available data from 2020 to 2023, approximately 44% of US silver imports came from Mexico and 17% came from Canada according to the US Geological Survey.
The 82M oz. imported annually from Canada and Mexico is now incentivized to be sourced from other cheaper sources.
As 70% of silver mine production is a minor byproduct of the mining of other primary metals, mine supply of silver from other countries simply cannot respond quickly to added silver demand irrespective of the price of silver.
The Bank of England that coordinates the multi-decade London price rigging of silver and gold in London is going to have a very rough time in the weeks and months ahead.
Blackrock Inc. that operates the worldâs largest silver Exchange Traded Fund (ETF) in the âSLVâ iShares Silver Trust also merits close observation.
 |
Figure 1 - Donald Trump Receives Gold Bullion Building Lease Payment - Sept. 15, 2011; photo source: Associated Press
jog on
duc
Attachments
Similar threads
