Another update on my investment thesis. You can find my previous update from July here, and as you can see, everything has more or less being going according to my predictions since that last post in July.
Gold & Silver
I noted in July that I am bullish on precious metals (gold, silver), and that’s simply because in terms of the macroeconomic and geopolitical environment, the global situation is uncertain and will likely continue to be uncertain for the foreseeable future. Uncertainty in the markets and uncertainty in life in general are bullish for gold, because gold is the age-old store of value trusted by everyone, regardless of your race, religion, political perspective, or economic class.
Gold hit new all-time-highs (ATHs) soon after my last update, peaking just above $2,000 per ounce at the start of August. Since then, it has retraced aggressively and now consolidating just above the previous ATH at the mid-1,900 level. It seems likely to break out very soon, and I’m betting on it breaking further upward. Regardless of short term price action, I remain quite bullish on gold and silver for the next year or two (for as long as America and the world remain chaotic and economically unstable).
Bitcoin & Ethereum
If you’ve read more than a couple posts on this site you would know that I am a huge believer in Bitcoin as a long term macro asset and an alternative financial system altogether. Bitcoin’s volatility has decreased over time and with more institutional interest and more developed derivative markets, it has started acting more like a macro asset, moving in more correlated manners with the legacy markets.
In my July update I noted that Bitcoin was about to break out of its long term range and kickstart a new bull market, and it had done that immediately after that post. We’ve taken off from the $9k range but the party stopped short around $12k, and BTC is now back hovering around $10.5-11k. Slow moves like what we are seeing recently is good for Bitcoin in my opinion, as the repeated distribution and re-accumulation allows stronger support levels to be built. Also, a large American public company called MicroStrategy had recently bought 0.1% of the total BTC supply – real institutional money becoming part of the belief system.
As a macro asset I am as bullish on Bitcoin as ever, and I will HODL my BTC for the foreseeable future, no doubt.
I also mentioned in my July update that Ethereum was looking very good, especially with the budding bull market we find ourselves in and the amount of buzz that has been generated around all the “DeFi” casinos and experiments. Humans are intrinsically lazy and all seek the magic formula to make riches overnight, which is why all the ponzis and unreliable smart contracts in “DeFi” have attracted so much attention.
Regardless of what the principles are, all of this circus has benefitted Ethereum price tremendously, and we saw the ETH/BTC trade return +30% from the price level at my previous update in July. I closed my ETH long position around the 0.04 BTC level, just before the top, and that felt damn good.
Like what happened with gold, we are now seeing a cool-off period for ETH, after most of the “DeFi” shitcoins have crashed hard. Time is needed to make bagholders feel maximum pain and rinse them out. I can see Ethereum making another run again in BTC terms a bit later on, and I’ll likely slowly accumulate a position again over the next weeks.
I was cautiously optimistic on stocks in my July update, and my sentiment remains the same, at least until the US election.
The S&P500 made a new ATH in August and has since had a fairly violent correction, mostly led by the overbought tech stocks (e.g. Tesla and Amazon). Similar to gold and silver, stock indices are now consolidating a bit, and we’ll see if it continues further up after this consolidation.
My guess is that it will as long as freshly printed money keep flooding into the market (remember: don’t fight the Fed) and interests remain near-zero (and it will). More uncertainty will come as we get closer to the US presidential election in November, but for now I am still cautiously bullish.
In terms of specific stocks, I have picked up some gaming stocks and gun stocks – two sectors I feel will be good going forward. Gaming is bullish because more people will work remotely and live their lives online, and online entertainment is necessary (also because next gen gaming consoles are coming out this Xmas!). Guns are bullish because as civil chaos continue to break out across the US and mentally ill Left extremists continue to dehumanize society and push for anarchy, people will eventually have no choice but to provide security for themselves and their families.
That’s it for this update. In summary, everything basically remains the same for me:
- Long Gold and Silver (medium term)
- Long Bitcoin and Ethereum (medium/long term)
- Long gaming and gun stocks (medium term)
- Positive/neutral on broad stock market (not invested)
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Until next time, friends. Let’s make some money.
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