Not an inflation hedge nor a store of value. Just another risk asset. The problem is as QE ends and rates rise, will it still see a strong inflow of money? I think not.
It's not the end crypto, but new highs could be some way off.
|(Nasdaq code: HOOD)||Purple Group* (JSE code: PPE);|
|Listed July 2021 at $38, hit $85 and now under $10 (-75%)||July 2021 145c, high since 350c and now 260c (+81%).|
|Makes most of their revenue from selling the deal flow and Gold accounts.||Revenue is from transactions.|
|The majority of transactions are in options or crypto.||The majority of transactions are in equity, but crypto, EC10, is growing.|
|Needed a quick $billion to settle meme stock trades.||The balance sheet is fine.|
|Huge repetitional damage when they halted trade in some meme stocks.|
|Value traded by clients has been falling since Q1 2021.||Value traded by clients fell in the last set of results.|
|Not yet profitable.||Profitable, PE ±50x.|
|Users declined in 2022.||Users grew in last results to +1million active accounts.|
|Market cap per user = $478 (ZAR7,400)||Market cap per user = ZAR3,263|
|Revenue per user (2021) = $80 (ZAR1,250)||Revenue per user = R109|
There comes a point at which a commodities price is simply too high and the price itself reduces demand. Depending on the commodity high prices often need to be high for protracted periods of time.
Investors and traders love big winners. That 10 bagger that happens in a matter of months or maybe a few years. But by consistently hunting for those big winners we're taking larger risks.
We're better off aiming for the modest winners.
Beating your benchmark by 2% a year sees you with almost 50% more after twenty years.
A recent Planet Money Podcast, Investing in mediocrity, talks about a fund manager who only ever aimed to be in the top third of all funds. After a decade of succeeding at that, they were the top fund over ten years.
1-year FAANG returns
° Alphabet pic.twitter.com/VybsCoWDfh
— Simon Brown (@SimonPB) May 9, 2022
"Stagflation is most commonly referred to as the simultaneous experience of three separate negative economic phenomena: rising inflation, rising unemployment, and the declining demand for goods and services."
The best defence is generally commodities.
The world's oldest exchanges starting in India all the way through to Amsterdam.
Staring in Kimberly in 1881 through to the present Simon details the history of stock exchanges in South Africa.
20% interest rates, capital controls, no foreign selling on the Moscow Exchange, selling oil & gas in Roubles (maybe), reports of paying interest on debt with Roubles and of course traders in for a buck.
Brent almost back at US$120.
The end of an era! So says Tencent as revenue grows in single digits, the lowest quarterly number since listing back in 2004. Tencent’s declaration is resignation that any expansion will be cautious and controlled. Prosus down 8.2%, Naspers down 8.4%. Prices still look vulnerable
— David Shapiro (@davidshapiro61) March 23, 2022
China's state council has in one move just:
*Pledged to keep capital markets stable
*Vowed to support overseas stock listings
*Said dialogue with US re ADRs is 'good'
*Promised to handle risks for property developers
*Clarified regulation of Big Tech will end 'soon'
— Sofia Horta e Costa (@SofiaHCBBG) March 16, 2022
Tencent has been under pressure
Naspers and Prosus have been hit even harder
Live Prosus discount to net asset value (NAV) is now some 55% after hitting 60%.
VK (old mail.ru) has been written down to zero.
Generally unlisted is worth a lot less than stated?
Energy, PGMs and agriculture. Will central banks stick to their rate rising trend?
People want to buy the Russian ETF, why?
Even if peace happens today, sanctions will be in place for some time to come.
Local stocks impacted
The panellists were;
After a high of 349c a month ago it's now 261c.
Firstly it's more sellers than buyers.
The hype of the pandemic trading is fading and easy returns are fading. So less trading, slower new accounts (albeit reports that they still have great new account rates).
Vacation is wild.
I sold 35% of my holding at 315c-345c on the way up, this was because it simply became too large within my portfolio (was the biggest holding after buying at 50c less than 2 years ago). But I am happy to continue holding.
Now for the tenth year in a row, we kick off the new year with a predictions show.
Importantly we start each show with a review of the previous year’s predictions and you’ll find the 2021 predictions show here.