Capitalogix

Bitcoin Is At New Highs – But, Is It A Strong Investment?

If you had invested $10,000 in gold in July of 2010 your investment would be worth ~$9981 ... In contrast, if you had invested $10,000 in Bitcoin, at the same time, your investment would have grown to over $200,000.

Bitcoin hit all-time highs this week.  I saw a chart that caught my interest.  Bitcoin's value seems closely correlated with the number of searches for it on Google.

DataIsBeautiful via Reddit

From a behavioral economics perspective, this makes sense.  Google searches can be a good indicator of public sentiment, interest, demand, or public sentiment. 

Bitcoin is a digital currency decentralized over a peer-to-peer network. The more people are willing to accept it as a medium of exchange, the more valuable it becomes.

It's decentralization provides it safety from censorship and government interference - meaning it has value as an international currency, and as a currency for black-market transactions.

However, the worth of a bitcoin clearly isn't just based on sentiment (on one hand, there are desires to avoid fiat currency vagaries, government interventions and scrutiny, while having a fair price discovery method, etc.  ... on the other hand, there are also the costs to mine a bitcoin, transaction fees, etc.).

Compared to a reserve currency – whose worth is primarily influenced by trade value and other macroeconomic factors - watching Bitcoin's volatility can be scary. 

That being said, Bitcoin is in a relatively unique position, and as the internet grows and our world becomes more interconnected, it's entirely possible that Bitcoin will continue to legitimize. 

It's a brave new world.  For what it's worth, I remain a skeptic of the currency.  Yet, I am bullish on the underlying Blockchain crypto-currency technology. 

 

Related articles

Taking Bitcoin to the stock market won't do much for its risky image

Why de-centralised digital currencies are finding a permanent place in societies, as government actions jeapordise livelihoods

What's the Deal With Cryptocurrency Market Caps? | Lets Talk Payments

Bitcoin isn't 100 percent secure - here's how to further hide your purchases

Bitcoin price surges to all-time high of $1,400

3 charts show the crazy gains of crypto-currencies

Here Are Some Links for Your Weekend Reading - May 14th, 2017

Happy Mother's Day!

 

 

Here's to simpler times. 

 

 

 

Here are some of the posts that caught my eye. Hope you find something interesting.

 

Lighter Links:

 

• Now We Know - Bill Clinton Cost His Wife the Presidency. (Washington Post)
• Creating Simple Rules for Complex Decisions. (HBR)
• Quantum Computing Demands a Whole New Kind of Programmer. (SingularityHub)
• Christian Governor in Indonesia Found Guilty of Blasphemy against Islam. (New York Times)
• Just How Crazy is the Trump Presidency? (FastCoD)

 

Trading Links:

• Forbes Small Giants 2017: America's Best Small Companies. (Forbes)
• Apple Becomes First US Firm to Cross $800B Market Cap Threshold. (AppleInsider)
• IBM Faces Credit Rating Cut from S&P. (FT)
• Businessmen Start to Replace Soldiers as Israel’s Political Heroes. (Economist)
• It's Happening Again - And the Last 2 Times this Happened, The S&P 500 Fell by 57% and 19%. (Fool)

 

"The Absolute Dominance of the U.S. Economy"

Despite all the drama with Trump, fear of economic issues, etc. America's status as an economic superpower is intact. 

The chart below tallies the GDP of nations and represents each nation's GDP as a percentage of the global economy. 

 

via MarketWatch

 

The U.S. economy is by far the largest at over $18 trillion.

By Continent, Asia overshadows North America and Europe.  Yet, China (America's closest competitor) only has a GDP of approximately $11 Trillion.  

There is a vast difference between the "Have" and "Have Not" countries.

For example, South America's four biggest economies account for 4% of the global GDP, while Asia accounts for 33.84%. 

Impressive, but I suspect that America's success (globally) engenders the same resentment that the "One-Percent" get here in America.

Here Are Some Links For Your Weekly Reading - April 29th, 2017

Might be easier to solve a Rubik's Cube than to be President Trump.  Check out his first 100 days. 

 

Here are some of the posts that caught my eye. Hope you find something interesting. 

Lighter Links:

• Elon Musk and the 100 Hour Error. (MichaelHyatt)
• Gigaom's AI Startup Challenge – Finalists. (GigaOM)
• Access to Nature Reduces Depression and Obesity, Finds European Study. (TheGuardian)
• Fixing Lousy Sleep Could Keep Us Healthy Longer. (Futurity)
• Lab-Grown Meat is Almost Here. (BigThink)

Trading Links:

• Former Fed Advisor Says the Central Bank Shouldn't Comment on Equities. (CNBC)
• Quantopian Makes First Allocations to Crowd-Sourced Algorithms. (HedgeWeek)
• Fintech: Revolution or Evolution? (Ritholtz)
• Norway to Spend $315M on World's First Ship Tunnel. (CNN)
• BlackRock Signals Active Overhaul with Shift to Quant. (FTAdviser)

Will Robots Take Your Job? How Soon?

I often talk about how robots are changing the workplace (For example here, and here) because it's a topic that hits close to home. 

I remember, back in the late 90's, starting to trade based on my knowledge and my insights (and feeling like I had an edge).  By 2003, most of my trading was automated.  But, I wouldn't have believed how much of today's daily volume is now traded by computers.

Likewise, I remember the tech bubble and recognizing that more businesses were going online.  But, I wouldn't have believed what the Internet did to retail, music, TV, banking (face it, to Business and the World in general).

Could it take your job as well?

Most don't think so.

 

 via Pew Research

Interesting.

People are not good at recognizing their biases.

For example, take "Fake News" or the recent claims from Trump that Obama wiretapped him. 

 

 

It turns out, people consistently underestimate their susceptibility to fake news - especially if the story favors their preferred candidate.

In the case of wiretapping - despite no credible evidence of wiretapping and the heads of the FBI and NSA categorically denying that Obama ordered wiretapping of Trump Tower - 47% of American and 74% of Republicans believe it's likely that Trump was wiretapped during the campaign

Regardless of the veracity of the statement, it's evidence that we have a tendency to think emotionally, and aren't always great at rationally analyzing facts. 

As proof that it's everyone, the week after the election, many Democrats believed the economy had already worsened.

Roddy Roediger is a leading expert in learning and memory, and he says there are 3 key principles that make false information believable:

 

1. Plausibility;
2. Suggestions and innuendo can be just as convincing as assertions; and
3. The more we engage with the lie, the more we misremember.

 

Good thing we're not biased ... Right?

Here Are Some Links For Your Weekly Reading - April 14th, 2017

United Airlines got a lot of bad press when it physically removed passengers from a flight to accommodate crew members.  A day ago, they were at it again, when they removed a couple heading to their wedding.  Could it get any worse?

 

 

Here are some of the posts that caught my eye. Hope you find something interesting. 

Lighter Links:

• Want to Found a Start-Up?  These are the Books You Should Read First, a Top VC Says. (CNBC)
• FDA Approves 23AndMe’s At-Home DNA Tests for 10 Diseases. (NBC News)
• “Love Drugs” Will Soon Be a Reality. but Should We Take Them? (Quartz)
• Eminent Astrophysicist Issues a Dire Warning on AI and Alien Life. (Futurism)
• Let’s Take an In-Depth Look at Current Advances in Artificial Intelligence. (Interesting Engineering)

Trading Links:

• Marijuana Price Dips to $1,679 a Pound. (247WallSt)
• Tesla Has Something Hotter Than Cars to Sell: Its Story. (New York Times)
• This is How Many U.S. Jobs Robots Will Create over the next 10 Years. (MarketWatch)
• This Cow Illustrates 8 Business Models (Infographic). (Entrepreneur)
• Steven Cohen Just Gave Millions to Crowd Sourcing Hedge Funders. (Fortune)

 

Related articles

How artificial intelligence has evolved over time

Elon Musk's Neuralink wants to boost the brain to keep up with AI

Once In a Blue Moon ... or every couple of years

Will AI Radically Change B2B Marketing? Marketers Think So

Here Are Some Links For Your Weekly Reading - April 8th, 2017

 

Here are some of the posts that caught my eye. Hope you find something interesting. 

 

Lighter Links:

• How AI and Blockchain Will Change Business Organization. (HuffPost)
• Pluto Has Been Officially Reclassified as a Planet!. (Futurism)
• The Philosophy of the Matrix: from Plato and Descartes, to Eastern Philosophy. (OpenCulture)
• Tony Romo to Replace Phil Simms in Broadcast Booth. (NFL)
• The 13 Best April Fools’ Day Pranks of 2017. (Slate)

Trading Links:

• How Hackers Hijacked a Bank’s Entire Online Operation. (Wired)
• America’s System of Checks and Balances Seems to Be Working. (Economist)
• How Much People in the Trump Administration are Worth. (NYTimes)
• Santoli: Here's Why BlackRock is Throwing in the Towel on Human Stock Picking. (CNBC)
• Here’s 48 Hedge Fund Terms Every Investor Should Know. (VisualCapitalist)

Ultra Spiritual Trading ... With JP Sears

Had a quick chat with JP Sears at a Genius Network event, in Phoenix, this week.

 

 

 

Turns out we have some similar ideas on trading.

JP Spears is famous for his humor. However, before he found this "character," he made his money as a spiritual coach. One step under the surface, I believe there are a few consistent hidden messages in his humor. 

The first hidden message is to let go of what served you that no longer serves you.  This is also a key to profitable trading. The market doesn't care what your favorite trade looks like. Nor does it care whether you're comfortable, or how you made money in the past.

You have to be more committed to your results than you are attached to your process.

Many times, your favorite practice is more beneficial to you as a nightlight, which keeps you comfortable, rather than as an alpha-generating strategy, tactic, or technique.

The second hidden message in JP Sears' humor is to look for happiness where it is, not where it isn't.  This also is a key to trading. It doesn't make sense to look for a good trade in a bad market. The key is to understand where your edge is, and to use it where and when it exists.

As I said .. Ultra-Spiritual!

For more, watch this. 

  

 

In the video, JP says that we should all stop using our "analytical minds" to trade, and instead use our third eye - and while  I don't think my third eye is the answer, I do think our analytical minds can confuse us instead of help us. 

Look at it this way: Less than 10% of active traders beat the S&P 500 any given year; and if they beat it one year, the chance is less than a coin flip, that they beat it again the following year. 

Most traders understand that analysis and knowledge isn't enough anymore. 

So what's the answer?

Well, if you watched the video, I'm leaning towards algorithms and artificial intelligence. 

That doesn't mean looking for the "Holy Grail" – or a good set of three to five trading systems either.  First, there's no Holy Grail, and it isn't realistic to believe a few systems can handle the chaos of modern markets.

There's always something working in the markets, but there isn't something that works all the time. 

There's something to be said for knowing when to switch it up and try something new. 

JP Sears was, and is, an emotional healing coach, and licensed "Holisitic Coach Advanced Practioner," but he found then when he posted a YouTube video he was excited when he got a couple hundred views (you can see his more serious origins in this video from four years ago). 

He added the funny/satirical aspect as a complement to what he already knew, and it took him to the next level. He now gets millions.

To see more JP Sears, here's an article I shared a couple months ago.  Or, get his book How To Be Ultra Spiritual.

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Here Are Some Links For Your Weekly Reading - April 2nd, 2017

 

 It's a crazy world ...

 

Here are McCain's full remarks.

 

Here are some of the posts that caught my eye. Hope you find something interesting.

 

Lighter Links:

• The Most Intelligent Presidents in U.S. History. (US-Presidents)
• The Merging of Humans and Machines is Happening Now. (Wired)
• Does the Sound of Noisy Eating Drive You Mad? Here's Why. (Time)
• How Tom Brady's Super Bowl Jersey Was Found - the inside Story. (ESPN)
• The Man Who Shot Reagan is out of the Mental Hospital and Living with His Mother. (NYMag)

Trading Links:

• House Committee Passes Bill to "Audit the Fed". (ZeroHedge)
• "Until Market Abandons Hope for a Tax Deal, There Will Be No Significant Weakness". (JPM)
• Here's How High-frequency Trading Has Changed the Stock Market. (Credit Suisse)
• Learn from Warren Buffett's Diversification. (SeekingAlpha)
• Trump Taps Kushner to Lead a SWAT Team to Fix Government with Business Ideas. (Washington Post)

Here Are Some Links For Your Weekend Reading - March 25th, 2017

Let's play "Caption This Picture."

 

Found it under the headline "Aides Wrestle Drill From Trump's Hands As He Tries To Remove Obama Listening Device From Skull."  What would you caption it?

Here are some of the posts that caught my eye. Hope you find something interesting.

  

Lighter Links:

• ‘Homo Sapiens as We Know Them Will Disappear in a Century or So’. (Yuval Noah Harari)
• A Stunning Video of Mars that Took Three Months to Stitch Together—by Hand. (Wired)
• Stephen Hawking is Going to Space. (TheNextWeb)
• Darth Vader’s Suit Would Cost $18.3 Million in Real Life. (Dailyinfographic)
• How to Tell a Good Story, as Explained by George Saunders, Ira Glass, Ken Burns, Scott Simon, Catherine Burns & Others. (OpenCulture)

 

Trading Links:

• Steve Cohen is Trying to Teach Computers to Think like Top Traders. (Bloomberg)
• John Oliver on the Federal Budget. (Ritholtz)
• Measuring the Cost of Living Worldwide. (Economist)
• Are Bonds Flashing a Warning Sign for Stocks? (SeeItMarket)
• Quants are Eating Away at Wall Street's Edge. (QuantNews)