Thriving with Interest!

Over the course of the month I wrote the following posts that said it was a decent time to get into some BTC and to buy the S&P (and European markets).  For reference here are the posts: S&P 500: https://thrivingwithinterest.blogspot.com/2021/06/s-500-target-is-5250-in-our-sights-this.html BITCOIN: https://thrivingwithinterest.blogspot.com/2021/07/woah-thats-quite-move-in-bond-market.html EUROSTOXX50 https://thrivingwithinterest.blogspot.com/2021/05/where-to-invest-now-europe-of-course.html As the month of July comes to end, it would be nice time to update those predictions. Here goes... Bitcoin is bumping up against resistance: If anything, you could get out of some BTC and roll that into ETH as the ratio is near a medium term bottom here: And the S&P 500 is still looking like it will continue to motor ahead (despite today's little wobble it had a good July and overcame a 7% drop in AMZN shares too): The EuroStoxx is having a hard time here, but if it breaks above this...

It's ok, and even cathartic, to cry... Scott Galloway (I wholeheartedly agree) Let me first take a step back... At the end of May I wrote a blogpost listing 5 of my favorite podcasts for those of you looking to increase your financial literacy. Here is the link: https://thrivingwithinterest.blogspot.com/2021/05/top-5-podcasts-to-increase-your.html I would like to add another podcast as a must listen. Even though it's not a purely financial one, you will certainly learn a lot about finance, marketing and business in general from the great Scott Galloway, professor at NYU Stern School of Business and host (or co-host with Kara Swisher) of a couple of great podcasts. The one I want to focus on here (and add  to the list above), is the Prof G Pod with Scott Galloway: In today's podcast he had a fascinating interview with Jonathan Haidt, also of the NYU Stern School, but what I would like to highlight is the last segment of his show (basically the final 5 minutes) which he entit...

A big IPO is due to come to market on Thursday, that of Robinhood (stock code HOOD). Good luck... A few people have asked me what to do with it and I have one simple answer, steer clear. Here is the deal, they are actually living up to their name and handing out shares to users of the app. That's pretty cool. Until it isn't... (because I think the stock will go down from here) Firstly, the $38/share price implies a valuation of over $30 billion. A year ago the company was valued at $12 billion. Yes the company has done well over the past year+ but that's a big rise for a company that may be past it's prime. For one the world is slowly returning to normal and the days of daytraders dominating markets (and using Robinhood) may be behind us.  Here is a snapshot of it's revenue (and expense) growth: Nice chart... That being said, bears like me could point to the fact that it appears likely that growth has peaked and they will have a hard time signing up new customers at...

It's a shame that nobody seems to be watching these Tokyo 2020 Olympics. I know it's hard with so many people having cut the cord and needing to find the appropriate place to stream the various events. Just a few days into the Olympics there have already been so many great stories. A 13 year old Japanese girl took home the gold in skateboarding ( 頑張って). On the other hand of the spectrum,  Oksana Chusovitina, a  46-year-old   gymnast from Uzbekistan, competed in her eighth Olympic Games this week. But the story so far (or story 1.b. after Naomi Osaka lighting up the Olympic flame) has to be the decision overnight by Simone Biles. At the Tokyo 2020 Olympics the great Simone Biles withdrew from the gymnastics team finals after her first rotation. Initially it might have appeared that her decision was brought on by a physical injury. The ultimate decision didn't have much do with with anything physical, but rather entirely mental. Team USA was already trailing the Russian Oly...

Over the past day or two there has been quite a rally in BTC price, primarily brought about by the chitchat that Amazon would most likely be looking to accept Bitcoin payments by the end of the year. As such it has certainly bounced back off a nice support level in the low $30,000 range. Amazon has an ad for a "digital currency and blockchain product lead” and it has sparked rampant speculation over what the tech giant might have planned. The new position will be part of the team responsible for how Amazon’s customers pay on its platforms. That being said, Amazon has come out to clarify things a bit. This morning a spokesperson from Amazon said:  "Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true,  We remain focused on exploring what this could look like for customers shopping on Amazon." Which has led to a slight pullback in the price of Bitcoin.  In addition, there has been speculation ...

What a difference a few days make. On Monday US equities markets had their biggest one day fall of the year, and by the close of business on Friday, we had just reached all time highs on the 3 major indices. A picture tells 1,000 words, so here goes: On Monday and Tuesday the financial pundits kept on highlighting reasons why this pullback occurred, Covid 19 cases being one of the key points, but potential interest rate hikes, questions regarding earnings, and broader economic slow downs were other reasons. Funnily enough on Wednesday I was fortunate enough to meet up with a high school classmate and her teenaged children. They were asking me about day trading as many of their friends were into that sort of thing. I told them that I would steer clear of it and that it was always better to take medium to long term views on markets and you will stand a better chance of making it work out. Low and behold, I wish we met up today because I would have been able to pop up the chart of the wee...

Many countries around the world are seeing a renewed increase in Covid cases. Some of the more astute politicians and health officials have even come to the conclusion that we will not be able to totally eradicate Covid but will have to learn how to live with it (see statements from UK Health Secretary Sajid Javid and Singapore's  Covid 19  Multi-Ministry Task Force). To some extent we have had that here in the US for quite some time with the country basically reopened since May/June depending on the state and I wrote about this in May:  https://thrivingwithinterest.blogspot.com/2021/05/how-quickly-do-we-get-back-to-post.html ) With vaccinations becoming more and more widely available in most western countries (even in Japan they are doing much better), and with the US now willing to step up and take a leading role in helping the rest of the world by shipping excess doses to countries in need, we will slowly get to a situation where people who want to get the vaccine will...

For those of you that follow the Bitcoin price closely, you probably know why the price popped up today. One word: Elon Musk. Bitcoin price has fallen by over 50% from its all time highs reached in April. It has had a hard time finding it's footing, although it is a very important support level here. 24 hours ago it seemed like it was on the verge of breaking down and soon find itself on a further downward trajectory that would lead it to the low $20,000s (blue line above). The reasons for the fall are well documented: Elon Musk tweets, China mining crackdown, Binance issues, Ransomware, possible increased regulatory scrutiny, and technical breakdown. Today's pop in Bitcoin, Ethereum and other crypto's is all down to an interview given by Elon Musk at the B Word Conference. Here is a recap of some of his statements: “One thing you do need to watch out for with crypto, especially bitcoin, using proof of work, using energy that’s a bit too much and not necessarily good for th...

I just read this article on the IFLS website from July 15th about how the world population will decline at some point after 2064 (this might still come too late to do anything about Climate Change). This would be the first time this happens in the absence of a global famine, pandemic (hold that thought...), war, etc... but rather because of the lowered fertility rates. Here is the full article for your perusal ( https://www.iflscience.com/health-and-medicine/for-the-first-time-in-centuries-the-worlds-population-will-decline-in-next-few-decades/ ): Make no mistake about it, there are great benefits to learning a second (or third/fourth/etc... language). I am in the process of spending time learning Japanese in order to complement my panoply of foreign languages. So I am all for this endeavor. One can make a very valid argument that learning programming languages is equally (if not more) valuable. So go for it.  From an economic perspective the greatest bang for your buck is learning...

Robert Reich, a noted public figure who was former Labor Secretary under Clinton, is a frequent commentator on various media outlets, and currently professor at UC Berkeley, highlighted the following story: Normally I am a bit skeptical with many of Mr Reich's views on policy and the role of government rules/regulations and capitalism in the various ills that plague the US, but on this one I couldn't agree more. This is his take on the situation: " Friends, stock buybacks don’t create more or better jobs. They don’t build a company. They don’t grow the American economy. Stock buybacks serve one purpose: enriching shareholders and executives. Kroger made billions thanks to the hard work of its frontline employees, and instead of rewarding them, it's rewarding the executives who got to safely work from home. Remember: Stock buybacks were illegal until the Reagan administration legalized them in 1982 — around the same time most Americans' wages started to become stagn...

  WSJ story July 16 There was a WSJ story today that highlighted how difficult it is to buy a new or used car with sales prices often exceeding sticker prices. This is consistent with other big purchase items such as housing, furniture, etc...Chip shortages, low inventories, and consumers flush with cash are 3 of the key reasons for the sharp price rises in the car market. This leads me to the following stock price recommendation. There are two names that come to mind: Carvana (CVNA)  and CarMax (CMX). Carvana is going gangbusters, with sales almost doubling YoY and up 10x over the past 4 years. However at $50+ bil market cap, it is currently over 5x Price to Sales. I am a sucker for a growth company, and this one certainly fits the bill, however with the stock up from $30 in the depths of the Covid selloff in March 2020 to over $300 today, that is a bit rich. Therefore let's take a look at the leader in the in industry, CarMax. They are currently trading below 1x sales and wi...

A new mini series dropped on Netflix a week or two ago, "How to become a tyrant." This is not your typical lite and fluffy summer fare. It's a 6 part series with 25-30 minute episodes covering your "Best Of" dictators from the 100 years: Hitler Saddam Hussein Idi Amin Stalin Gaddafi Kim dynasty in N. Korea The episodes show how these 6 horrible figures rose to power and then abused that power, cleverly blending historical footage, interviews and incorporating rules from the following book: At times, you will probably get goosebumps, chills, flashbacks from the past few years, and will inevitably end up shaking your head given the parallels to the 2015-2020 period here in the USofA.  This series also reminded me of a bit that Bill Maher had on his weekly show, the Dictator Checklist and how many of the points Trump and his administration checked off. See it for yourself: I would recommend to spend some of your downtime checking out this series, renewing your acqu...

Over the last couple of days we have had a lot of headlines concerning inflation. The first arrived on Tuesday when CPI continued to rise and reached a 13 year high (graph below). The second set of headlines came on Wednesday when the Fed (and Powell in particular) announced their belief that this was temporary and would ultimately come back down to more reasonable levels. As such they are still a "ways off" from reducing asset purchases and changing monetary policy. They could be right. Check out a recent headline (and graph) from the WSJ about lumber prices which were on a tear last year and into the early part of 2021: Lumber Prices Are Way Down—but Don’t Expect New Houses to Cost Less Futures prices have dropped by about two-thirds since May, helping builders and do-it-yourselfers This is called mean reversion! For a long time we have been taught to think that CPI is not a problem and that there really isn't much of a threat of massive price rises. Let's drill dow...

Last week the WSJ ran a piece on how some top universities (they single our Columbia a number of times) push programs that leave students with tens of thousands or even hundreds of thousands of dollars of debt while then getting jobs with such low salaries that they are unable to pay off those student loans. The basic issue is this: sky high tuition (with also very rapid YoY growth rates), with little financial aid available, lead students with dreams/passions in fields that are not very lucrative to borrow way too much money relative to their earnings potential upon graduation: Here are a couple of examples: Columbia University film school graduates with a median debt load of $181,000 while upon completion of the program half of those students earn less then $30,000/year; NYU graduates with a publishing degree have a median debt load of $116,000 and then earn $42,000 on average; Half of Northwestern University graduates in Speech Pathology had borrowed $148,000 or more and landed jobs...

One of my previous posts on the bitcoin credit card drew a bit of interest (Bitcoin related possibly? Or fiat currency only?) and hence I thought I should follow up today. Here is the link to the original post: https://thrivingwithinterest.blogspot.com/2021/06/you-want-crypto-rewards-credit-card.html Here is where we currently stand: BlockFi Bitcoin Rewards Credit Card:  Sign up here:  https://blockfi.com/credit-card-waitlist/?r=7TRwo This Visa credit card comes with no annual fee and no foreign transaction fees, yet it doles out 1.5% back in Bitcoin on all purchases, then 2% back in Bitcoin once you have spent at least $50,000 on your card within a calendar year.  SoFi Credit Card: Sign up here:  https://www.sofi.com/credit-card/ Earn 2% unlimited cash back ( can also use it for crypto deposits into a SoFi Invest account) ,  up to $100 when you open and fund a SoFi Money and a SoFi Invest account, No annual fee. No foreign transaction fees, Cell phone protectio...

Calling all parents of high school students who are in the process of considering colleges in the nest few years. We know the system is broken and b ack in April I wrote a post on how to reform the college applications process. It was one of my popular posts at the time: https://thrivingwithinterest.blogspot.com/2021/04/thoughts-on-how-to-reform-college.html In the past few weeks, a much brighter mind than me has released his new season of the Revisionist History podcast.  Of course I am talking about Malcolm Gladwell. The two most recent episodes show how ridiculous the US New & World Report College Rankings is and he even goes to the effort of trying to get a school ranked in the low 100s (Dillard University) into a top 10 ranking by simply tweaking a few of the metrics that matter most in the ranking calculations. Here is the link to his website and of course you can find the podcast in all of the usual places: https://www.pushkin.fm/show/revisionist-history/ A quick summary...

As we sit here in the doldrums of the summer and with most crypto down about 50% off their all time highs, I think it's a good time to re-evaluate whether or not it's a bubble, will it collapse, and is it here to stay. As I wrote about earlier I think that we still have another 3-6 months before we can even imagine seeing new all time highs ( https://thrivingwithinterest.blogspot.com/2021/06/another-50-bitcoin-price-correction.html ). So this is a great time to take stock (pun intended) in where we stand on crypto. Cryoto is slowly but surely becoming a more and more normal part of our investment landscape. Rewind the clock back a couple of centuries and stocks exclusive and "new" to most people (not to mention very volatile). A similar thing will ultimately happen to Bitcoin and other crypto. They will become more normalized and an accepted form of investment allocations. Even today stocks aren't the most stable of all asset classes. Think back to the past 18 mon...

  You read that right, a 6-0 set inflicted on Federer, the man who has won the most Wimbledon singles titles (of course the great Navratilova holds the all time record with 9 singles titles), and who has not lost here in straight sets since 2002. This simply marks the last domino to fall of the greats leaving the stage with a whimper, rather than a bang. Let's recap: Nadal didn't even play the tournament this year. He felt he needed more time to recuperate after a full clay court season and as such withdrew both from Wimbledon and the Olympics in order to "focus on looking at the mid and long term." Of course that is sensible, but with Djokovic one win away from his Major total, London being a short train ride away from Paris, this does strike me as a little strange. Not to mention that Novak beat him in Paris less than a month ago, it does seem that the Nadal challenge is slowly coming to an end; Andy Murray who is often described as a member of the big 4 in men'...