Space to grow into – a key feature of my Bitcoin bet….

Thursday, 16th July 2020

Space to grow into – a key feature of my Bitcoin bet….

Earlier this week Tesla’s Price-to-Earnings (P/E) ratio stood at a mind-boggling 10919.85….

You didn’t read that wrong. Investors buying Tesla stock right now are paying that many dollars for a single dollar of earnings….

And plenty are buying. On Monday, US trading platform Robinhood reported that 10,000 traders per hour were piling into Tesla stock….

Tesla is already worth more than multiple mainstream and established car manufacturers – but hasn’t yet made a profit, is yet to produce 500,000 vehicles per annum and isn’t exactly tearing up the tarmac with sales growth….

Buying Tesla stock seems like madness to me. But I guess some people would say the same about Bitcoin….

  • Betting on hardness….

You’ll find no shortage of people in the financial world who believe Bitcoin is headed for zero….

Investment guru Jim Rogers, for example. Only last month he was reiterating his view that Bitcoin is essentially worthless. Warren Buffett is another critic. There are many more….

But there just as many proponents of Bitcoin specifically and cryptocurrencies generally….

Over the past few years, I’ve stayed neutral – adopting a strict watching brief and waiting to see what happens.… Click here to read more

On the retreat….

Tuesday, 4th June 2019

On the retreat….

Bonds are pretty dull fare….

The character Jared Vennett (played by Ryan Gosling) in the film The Big Short summed it up better than I can….

‘If banking was boring, then the bond department at the bank was straight up comatose. We all know about bonds. You give ‘em to your snot-nosed kid when he turns 15; maybe, when he’s 30, he makes a hundred bucks. Boring.’

But boring or not, the bond markets are sometimes instructive….

They sometimes have something important to tell us….

And now is one of those times….

  • First, how bonds work….

Before we get into the nitty-gritty, it’s important to understand how bonds work….

I’m no expert, but here are the basics we need for our purposes today….

When you buy a bond, you are basically lending the bond issuer money. You buy at the current price and the lender pays you what is called a yield – like interest….

For the purposes of this column today, the important bit is this: the yield of a bond is inversely related to its current price. If the price of a bond falls, its yield goes up. If the price of a bond goes up, the yield falls….… Click here to read more