Posted on 01/09/2022 6:15:42 PM PST by BenLurkin
The alleged catalyst for the change has been the looming Fed rate hikes...
A few of the bubbles bursting:
Crypto: Crypto assets are suffering crashes the likes of which would be considered cataclysmic in general markets. Bitcoin is down nearly 40% from its highs; Ethereum is down 34%. More colorful (yet less commanding) names like Polkadot are down 50%. Crypto has seen such crashes before and may well rise from the ashes in a nanosecond. But as I wrote recently, you can’t value crypto so there’s no logical basis to own it. It is a classic speculative gamble. And such things usually end badly.
Momentum Growth Stocks with Negative Returns on Capital: Perhaps the biggest fad of the past two years has been buying stocks that have captured the public’s pandemic imagination. In aggregate these companies have -5.09% returns on invested capital (ROIC = earnings/invested capital), a sure sign they are destroying shareholder value. These stocks are exemplified by ETFs such as Ark Innovation (ARKK) ARKK -1.4% which owns everything from Teladoc TDOC +0.5% to Roku, both of which are down more than 40% over the past year. Buying a basket of such businesses is the height of speculation.
Meme Stocks: Yet even more absurd are meme stocks, garbage companies that shot to the moon on the back of a tweet. The leader of this madness, AMC (AMC), is down 39% over the past three months. Over $80 billion in market capitalization has been wiped out since the highs. Meme stocks are the ultimate exercise of what’s called the “greater fool theory,” the belief that you should buy a stock because it’s going up on the prayer that a greater fool than you will eventually take it off your hands for the same reason.
(Excerpt) Read more at forbes.com ...
“Thus rising interest rates and inflation are reasons to increase holdings of crypto not run from it.”
You are gonna get burned big time if you believe that.
The reason is that markets of all kinds are very inter-related, and crypto is a market, whether you believe it or not.
During period of high interest rates and inflation investors flee to quality and commodities—and do so in a very chaotic way.
If you have made money with Bitcoin, great.
Don’t get greedy.
Cash out while the getting is good.
Please, do your best to explain as to how this DOES apply to Bitcoin.
I see zero correlation with that link and crypto.
Plus, you somewhat “unique” quote about value & time remains gobbledegook.
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