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The Blockchain is Happening. You Should Start Paying Attention

Go buy some Bitcoin. This is investment advice that I guarantee you cannot lose on. Not because Bitcoin can’t go to $0; it absolutely can. You cannot lose because it is an investment into your education. You can “invest” as little as $1.

What you’re doing when you purchase some Bitcoin is you’re educating yourself on digital currency. You learn how to buy, where to buy, how to store it in a digital wallet and how to transfer it. This is the future. The future may not be Bitcoin specifically, but it will be some form of digital currency based on Blockchain technology.

The Blockchain is the genius behind Bitcoin. The Blockchain is going to transform/disrupt/revolutionize a whole host of industries. You should learn about it. Here are two starting points from Forbes and Fortune.

“The first generation of the digital revolution brought us the Internet of information. The second generation — powered by blockchain technology — is bringing us the Internet of value: a new platform to reshape the world of business and transform the old order of human affairs for the better.” — Don Tapscott

Yes, there is a chance if you buy Bitcoin and it takes off, you could do well. Bitcoin’s total market cap is ~$25B now. According to Visual Capitalists, there is ~$5T in cash worldwide. Bitcoin is an alternative to cash, so you see the upside potential. We’re still at the very beginning. One newsletter I read made the analogy to think about Bitcoin as a share in the Blockchain; you’re owning/investing in a piece of the Blockchain.

Something is going on with digital currencies these days. I’m not sure what but every cryptocurrency is screaming higher. 100%+, 500%+, 1000%+ … these are 6 month returns on some cryptos. Don’t bet the farm though, you’ll never sleep with the volatility. These are what some may call “Widow Makers”.

In any case, I don’t want to dwell on the monetary aspect. The point is that I recommend learning about cryptocurrencies and specifically the Blockchain. All the banks are looking at it. Alliances and Consortiums are forming. Banks that don’t figure out a Blockchain strategy will be left behind.

The best thing you can do is educate yourself; invest in yourself. Learn about the Blockchain. It’s coming. Buy some Bitcoin.

 

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Interview with Danny Moss: The Trader from The Big Short

I loved the movie “The Big Short”.

This was a really interesting interview by Patrick O’Shaughnessy with Danny Moss, the trader at Frontpoint Capital that put on the trade.

It was interesting to hear his take on what actually happened and working with Michael Lewis.

Also, really interesting to learn how he’s thinking about Passive Vs. Active investing and the effects on the market. For example, as ETFs grow, an ETF can be the top shareholder of a given company (think GDXJ). If this is the case, the CEO is now working numbers to stay in the ETF. He/she looks at the ETF criteria and runs the business to make sure he/she stays within those parameters. Last thing you want is to piss off your top shareholder and cause a selloff.

More on Passive Vs. Active investing to come as I’ve been reading a lot about this lately and it is VERY interesting.

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China WMP – Is this the Catalyst to the Coming Crash?

A Ponzi scheme is a form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.

It is said that US Social Security is a Ponzi scheme. Bernie Madoff was the biggest, most famous Ponzi scheme. Apparently, Chinese banks (including State-owned ones) are running Ponzi schemes.

Chinese banks are selling Wealth Management Products (WMP). These products offer ~5-8%+ of “guaranteed” returns. But these aren’t bonds. WMPs are something like the collateralized debt obligations (CDOs). Guess what took down Lehman? … CDOs. :/

Look where these things invest:

Madoff was a $65B Ponzi scheme. China WMP are at $9-Trillion. Markets are as inter-connected as they’ve ever been. Once there is a failure and people start to panic and pull money out of these things, it’s over.

Apparently though, the Chinese consumers feel like their money is safe (at least the principal). The Government will bail them out, if there are any problems (like FDIC insurance, in a way).

This is why Kyle Bass has been betting against the Yuan. His theory is that the Chinese Gov’t will have to drastically devalue the Yuan to save the system. Remember, many of these are State-owned banks investing in State-owned projects.

Read more at Jim Rickard’s Daily Reckoning blog.

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Who is Genie Energy (GNE)?

I never heard of this company until I read this post on Martin Armstrong’s blog.

Stock is currently at ~$7.50 and the market cap is ~$185M.

Interestingly enough, they just reported earnings today and posted a profit of $3.4M on $69.4M in revenues.

They’ve not posted an annual profit in last 3 years, but they were cash flow positive last year. Are we at a turning point?

The more interesting aspect of this company, though, is the Advisory board. Dick Cheney, Larry Summers, Rupert Murdoch, amongst other dignitaries. Wow, that is a politically heavy hitting roster. Wikipedia expands further on this.

Supposedly this company is sitting on a reserve bigger than Saudi Arabia! And this is the reason for the hoopla in Syria around the pipeline dispute and regime change.

This is seemingly a deep state company?

At $185M market cap, seemingly at a profitability turning point and sitting on a huge oil reserve, government ties…  Hmmm, might have to dip the toe in.

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Aqua Metals (AQMS): This Stock is Going to Move…

…I just don’t know which way yet!

Travis at Stock Gumshoe wrote about a tease recommendation from Tyler Laundon’s Cabot Small Cap Confidential newsletter.

I really enjoy the way Travis writes and I appreciate the homework he puts in to dissecting these kind of stock tip teasers.

Aqua Metals (AQMS) presents a nice case, so I dug in more, only to find a really intriguing bear case against it.

The Friendly Bear presents a several strong arguments. But digging into his track record, it’s not the greatest either.

The upside presented is a double to $36. The downside case is $3.

I’m currently leaning towards the downside, but I’m not quite ready to put the bet on yet. Earnings come out May 18th, so let’s see what that brings about.

What I could be willing to do is wait until the price hits $17.50 and put on a straddle…

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Bitcoin Vs Gold

The bottom line (at the top) is that both are bets against Fiat currency. (otherwise, you’d just keep your cash in your mattress)

The key to remember is that DEATH COMES TO ALL FIAT CURRENCY. There are no survivors. Government cannot help itself.

Bitcoin’s value eclipsed an ounce of Gold recently.

Gold has history on its side. A Loooooooonnnnnnnggggggg history. Gold is money. It’s been this way for many many thousands of years. It’s ingrained into the human DNA. That cannot easily be replaced.

I’m long term bullish on Gold because every fiat currency is on a path to zero. Again…Government Debt is the killer. Here’s my challenge with Gold. If shit hits the fan and we find ourselves in armageddon, what am I going to do with a block of gold? It has no value to anyone except being a means of exchange. Is that enough? Yes, it is divisible, but not easily.

Bitcoin (and other crypto-currencies) seem to be the future. Which one(s) will win, I’m not sure. So I’m comfortable to keep a balanced portfolio. The beauty here is that it’s still super early, so a small portofolio percentage now (of Crypto Vs. Gold) will turn heavily weighted toward Crypto, in my opinion. Because we know which currencies lose (Fiat).

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Is Ripple Another Cryptocurrency Worth a Small Bet?

Ripple is the 3rd largest cryptocurrency by market cap. It is run by a company, so it has an overlord; this is a good and bad thing.

Basically, Ripple is focused on the market of forex and it has partnered with several major global institutions. The major, major advantage to Ripple, as I understand it, is the speed at which transactions can happen and be confirmed; it’s seconds. This is in contrast to Bitcoin, whose blocks take ~10 mins on average.

Also, Ripple doesn’t depend on energy-intensive mining process. Instead it distributes XRP tokens at its discretion in order to incentivize certain behaviors.

“We will engage in distribution strategies that we expect will result in a stable and strengthening XRP exchange rate against other currencies. To this end, we currently plan to distribute XRP primarily through business development deals, incentives to liquidity providers who offer tighter spreads for payments, and selling XRP to institutional buyers interested in investing in XRP.”

Overlord can be good, but can be bad as well. Do we trust in this “Central Banker”?

Here is a recent chart of Ripple’s XRP courtesy of https://www.worldcoinindex.com/coin/ripple

I’ll be watching the transaction volume over the next few weeks. If traffic continues to be steadily increasing, then it will definitely be worth a flyer.

It seems to be a good strategy to just put a small amount of money into these cryptocurrencies early and just sit on them. I’m pretty sure ONE of them will emerge as a HUGE HUGE winner. This is playing the VC game…

Here’s how one would buy Ripple XRP (in US): https://ripple.com/xrp-portal/how-to-buy-xrp/

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Tech Merger Monday: Jive Acquired; AngiesList Acquired

Jive was acquired by private equity firm Aurea for ~$462M. I don’t know that Jive ever turned a profit. They went out with a bang ~5 yrs ago. They had a market cap of over $2B at one point.

I’m sure the founders and venture money did quite well. As well as the executive staff that took them public, who have long been gone since.

I almost went to work for Jive in 2011. I wonder if I would’ve cashed out at the right time and if I’d still be there had I taken the role…

Angie’s List was also acquired by IAC, who apparently had been pursuing them for a couple of years. Angie’s List will be merged with Home Advisors. The deal was valued at over $500M.

We were Angie’s List subscribers for a few years before ending our subscription last year or so. It’s not a bad service, but Yelp/Facebook/Google basically covers what it does for free.

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Best Sites for Royalty-Free Images for Your Blog

A picture says a thousand words. More relevant for this context is that a picture just adds visual appeal to the blog/site.

Here are a couple blogs that list several sites where one can obtain royalty-free images.

Personally, I’ve been using Pixabay almost exclusively. It has a pretty good selection of photos. I’ll keep using it ’til I find it harder to find good images. I’m not a fan of hunting around to multiple sites to find the perfect image. Good is good enough for this purpose.

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This Chrome Plug-In has Saved Me Hours

There is A LOT of content out there and A LOT of great content. How is one supposed to consume it all? One of the goals of this blog is to highlight only the best stuff so that you don’t have to.

Other times, you need to learn how to do something or learn about something and a great source is YouTube. Other times there are videos on a website but they can be lengthly or slow to get to the meat. Or they just talk slow.

I’ve been using this Chrome plugin: Video Speed Controller.

It is amazing. I can speed up the video up to 4x to quickly go through videos. When I need to pay attention, I’ll usually listen to it 1.5x. But I can whip through content much, much quicker with this plugin.

It only works for HTML5 video, but most videos are HTML5 these days.

 

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