To market to market to buy a fat pig. Yesterday JP Morgan posted better than expected numbers. Following results is the customary conference call by management. On the call things looked to be turning toward a bitcoin conversation instead of a JP Morgan conversation, the CEO Jamie Dimon had to make things clear 'I'm Not Going to Talk About Bitcoin Anymore'.
Sticking with Bitcoin, the price surged over 10% yesterday breaking $5 000 for the first time and currently sits at around $5 500 a coin. You know my view on it, I think it is a bubble. While searching for reasons to defend my opinion, I was reminded that Alan Greenspan, the Fed Chair in the 90's spoke about 'Irrational Exuberance' in stocks (tech stocks) around three years before the bubble finally burst. Given the passion of those buying bitcoins and the current momentum in the price, I can very easily see that price climbing for the next year or two. I wouldn't be surprised to see the price double from here.
You might say, if I'm so sure it is a bubble why don't I short Bitcoin? I'm currently reading a book about Charlie Munger, and the central theme of the book is stick to your expertise and avoid things that are too complicated. I'm going take their advice and stay out of the Bitcoin market. It is fascinating to watch the price movements from the sidelines because I have no money riding on what happens.
Market Scorecard. Unfortunately, yesterday wasn't a green day; it was a very light shade of red across the board. The Dow was down 0.14%, the S&P 500 was down 0.17%, the Nasdaq was down 0.18% and the All-share was down 0.04%. The stock market is on the verge of making history, if the total return (capital growth plus dividends) for the S&P 500 is positive in October, it will be the first time since records have been kept that the first 10-months of the year have had positive total returns.
Linkfest, lap it up
One thing, from Paul
Here is some weekend listening for you.
Ray Dalio is the founder of the world's largest hedge fund, Bridgewater Associates. They have about $160 billion under management, and are based in Westport, Connecticut, in the US.
I have always thought that Dalio was a nutcase, based on his rambling, disconnected public statements. He runs Bridgewater like a religious cult, promoting an odd theory of "radical transparency". He is the author of the new book, Principles: Life and Work which discusses this concept, amongst others.
This is from Wikipedia: "According to Bloomberg, Bridgewater uses an investing system that combines traditional diversification with wagers on or against markets around the world and attempts to invest in instruments and markets that do not "move in lock step" with each other.
Huh? I have been waiting for the fund to blow up for years, to no avail. They continue to do well.
Anyway, here is a 90-minute long interview with Dalio, conducted by Shane Parrish of the Farnham Street blog - Life Lessons from a Self-MadeBillionaire: My Conversation with Ray Dalio
Byron's Beats
Over 1.2 billion iPhones have been sold since Steve Jobs introduced them to the world in 2007. Of course, the iPhone has transformed and evolved over the last ten years. These devices are quite incredible and we probably take them for granted. This article takes a closer look at what these phones actually look like inside. I find the battery component very interesting, especially how much bigger they have become since the iPhone 3. Rumour has it that the iPhone X is going to take longer than expected to get to market. I cannot wait to get my hands on one of those, hurry up Apple! - What's Inside All the iPhones
Michael's Musings
You don't want to be blacklisted in China! Interestingly, the unintended consequences here might be that people take less risks and start fewer businesses - China to create national name-and-shame system for 'deadbeat borrowers'.
"Meanwhile in Jiangsu, Henan and Sichuan provinces, the courts have teamed up with telecoms operators to create a recorded message – played every time someone calls – for those who fail to repay their loans. The message tells the caller: 'The person you are calling has been put on a blacklist by the courts for failing to repay their debts. Please urge this person to honour their legal obligations.' "
Thinking of taking a sabbatical or moving? Here is how far your cash will go when looking to rent - Where Renters Get the Most and Least Space. Imagine spending R20 000 a month to rent a space big enough for a bed, shower and nothing else!
You will find more statistics at Statista
The race is still on for the first listed company to reach a market cap of $1 trillion dollars. The main contenders are Apple, Amazon and Alphabet (Google) - Google has 'the right pieces inplace to win the race' to a $1 trillion valuation. That is assuming that Saudi Aramco doesn't list before any of these companies can cross the finish line; the Saudi oil giant could have a market cap of as much as $10 trillion!
Bright's Banter
Joel Greenblatt is a hedge fund manager and founder of Gotham Asset Management. He is also a writer of a few books on value investing and special situations investing including "The Little Book That Beats The Market". He's had many successful investments, however he's famed for not backing Dr. Michael Burry's strategy of shorting the housing bubble during the lead up to the financial meltdown of 2008. Joel had invested a lot of capital in Burry's business and even features in a scene in the movie "The Big Short" where he disagrees with Burry's thesis. I personally prefer the book as always.
His investment philosophy is simple, he's from the same school of thought as Warren Buffett on trying to jump over one foot hurdles instead of looking around for ten foot hurdles to jump over.
He believes in looking in the right places and the right sectors. He makes an example in his book where one of his kitchen pipes get sblocked and he calls in a plumber to come fix it. The plumber comes in and bangs on the pipe once and says thanks that'll be $200, furious he replies "surely that can't be $200 you just banged the pipe" the plumber replies "no you're right, it's $5 for the bang and $195 for knowing where to bang".
Here's an article on what he thinks about diversification - Joel Greenblatt Secret Diversification Not Owning Stocks
Home again, home again, jiggety-jog. Next week is the Chinese National Congress, which happens every five years. The congress will layout the goals and plans for the next five years in China, so it is a big deal. On Monday, Netflix reports, those numbers are always fun to read. Asian markets are green this morning, unfortunately our market hasn't followed suit, we have opened in the red on the back of a stronger Rand.
Sent to you by Team Vestact.
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