Above is a weekly chart on the S+P 500 ($SPY). On Twitter this evening, I am seeing some people who want to step in and buy. Below is what you are stepping in front of.
Sure, crypto is melting away but it is nowhere near done yet. Valuations were hyper-pumped up.
The vultures and grave dancers can pounce on the dead carcasses of the stocks in some very good companies at around 320 in the SPY. We aren’t there yet, but we could get there soon. Coinbase is probably the best company of the bunch that is getting destroyed. I own a very very small position in Coinbase. I am in it to sell it around 2030 or beyond, so I don’t really care.
This is the ultimate grave dancer. (Sam Zell if you don’t know him)
Another company I own a bit of and might start posting bids for is CME Group. The reason? Their volume is through the roof which drives revenue. At its core, CME is an interest rate exchange and higher interest rates are good for the stock. They also are the largest commodity exchange and with the massive rally in commodities, you have to expect volume will be very big for some years to come in products like corn, wheat, live cattle, and lean hogs. They pay a nice dividend too. I have seen some speculation that it could trade down to $155. That’s cheap given historical valuation.
I haven’t checked options markets to see if calls on any LEAPs got cheap yet. But, it’s worth a look. Options might be a great way to play a market in an inflation environment with a doofus as President and a Fed woefully behind the curve.
One really interesting thing happened to me today.
Our fund invested in a company called MLTech last year. They are in the crypto business but they aren’t a “crypto token” company. They pair algorithmic strategies created by researchers with pools of capital. It’s super disruptive. I looked at our investment memo, and one reason we invested was we hypothesized that even in a bear market, they should be okay since they don’t care about the market direction they only care about market movement and trading.
Today on a call with their CEO, we asked Leo how the strategies were doing on their platform.
It was interesting to look at given crypto’s total meltdown. The crypto trading strategies on MLTech’s platform were up roughly 1%. That’s 12% on an annualized basis. Of course, past performance is no guarantee of future performance but it is a bit eye-opening to see something positive in a market that absolutely got destroyed. For context, Bitcoin has dropped just over 42% this year. By the way, it’s got a lot of room to run on the downside. $12,000 maybe. Crypto fanboys are going to find out just how “liquid” the crypto markets are. The S+P 500 return this year is -17.04%, for an annualized loss of -47.88%. Would you be okay with a paltry 12% gain this year? I suspect you’d be happy. That also beats the rate of inflation in the Joe Biden Economy.
You can go onto ML’s platform and see if you are qualified to put some money there. They are not open to small retail investors. If I were running a large pool of capital, I’d at least give it a look-see.
Food is a buy. Stock up...