Disclaimer: Your capital is at risk. This is not investment advice.
The monthly AAA Report was out this week, and it makes for important reading. Robin and Rashpal clearly remain concerned about the outlook for markets and note that the momentum behind trends is not currently strong. They acknowledge that the model works best when trends are strong and, as a result, urge caution and safety. The importance of doing nothing, staying safe and waiting until the outlook is clear can not be overstated in investing, and that is the stance they now take. Hence the title, “Go for Gold”.
No action in The Multi-Asset Investor portfolios this week, but in “Property vs Commodities”, Charlie Morris highlights the cracks appearing in the commercial real estate sector. There are some big numbers here. Will this be the next problem facing financial markets? Who knows, but it’s well worth being aware of. The extent of financialised assets (private equity, anyone?) impacted by this dramatic increase in interest rates is undeniably vast, and any difficulties will be compounded by underlying illiquidity. Tread carefully. It could be that commodities could be a port in the storm - another argument for a properly diversified portfolio.
I should also highlight some really interesting questions in the TMAI postbox. It’s great to know what an engaged and smart readership we have, and your correspondence helps us question assumptions and explore new ideas. Thanks for sending them in, and please keep them coming.
Back to diversifying portfolios, ByteFolio this week explores the phenomenon of Bitcoin’s recent “dominance” (which refers to its outperformance of the rest of crypto). Even the most hardened sceptic must be intrigued by Bitcoin’s strength in the face of unprecedented regulatory hostility in the USA. The more this continues, the more investors will be forced to confront their preconceptions. As it becomes clear that bitcoin is here to stay, investors will be forced to acknowledge its candidacy as a long-term portfolio constituent. That suggests a multi-year process of rising demand.
Those of you interested in use cases for blockchain technology should read Ali’s Token Takeaway note on VeChain. VeChain is involved in the world of supply chain management, where it has built a substantial market presence. However, for all its operational strengths, it is hard to decipher how value will accrue to token holders, a problem we frequently have in this space. Hence why it’s so important to differentiate between bitcoin and “everything else”.
In ATOMIC next week, I will be developing more ideas on the sort of questions bitcoin sceptics should start asking themselves. Charlie M, meanwhile, is working on an update of Atlas Pulse, which comes at a dramatic time for gold as the price once again looks to test US$2,000. He will also be giving a keynote speech at the European Gold Forum in Zurich on 12th April, in case you’re attending. Interestingly the talk is entitled “Bitcoin and Gold are Key to Surviving an Inflationary Environment”. You wouldn’t have been allowed in the room three years ago if you’d put bitcoin in the title…