What is your inner voice telling you? That voice that starts talking as soon as you wake up and continues chattering throughout the day.
What assumptions underpin what it is saying?
Your inner voice influences your mood. Your mood impacts how you treat people; how you treat people impacts how they treat you — influencing the quality of your relationships. Your relationships affect the quality of your life. The quality of your life forms the sounding board which projects your inner voice, creating a feedback loop.
Without awareness of it, your inner voice will remain on autopilot, akin to sitting…
The above graphic is from Visual Capitalist, which depicts 15 of the most significant BTC price drawdowns dating back to January 2012.
Pronounced BTC price volatility is nothing new.
Three of the top seven drawdowns (45% or greater) have occurred in the last four years. As such, investors should expect this level of price volatility to continue, periodically, in the foreseeable future — and size their allocation to BTC accordingly.
The graph below, created by glassnode, illustrates the magnitude of the most recent losses compared to those during the 2018 and 2020 sell-offs. …
Which publicly traded companies offer investors the best chances of benefiting from the continued adoption of blockchain technology?
Answer using 1st-Level Thinking: “Continued blockchain adoption should positively impact the value of Bitcoin; purchasing shares of companies that have accumulated bitcoins on their balance sheets can therefore be profitable.”
Answer using 2nd-Level Thinking: “MicroStrategy has the largest bitcoin holdings, yet its stock price has underperformed relative to the stock price of companies with fewer bitcoins on their balance sheet. The value add-on provided by these other companies must be driving their market value. …
1. Understanding the career risk professional investors face can help individual investors: professional investors often become forced sellers due to liquidity concerns, stop-losses, or bumping up against their portfolio’s risk budget. During market uncertainty, career risk hedging (i.e., not losing clients) can drive professional investors’ actions more than the results of their fundamental and/or technical analysis.
2. Your beliefs of how the stock market should behave are irrelevant: staying out of the market based on a belief that it is acting irrationally does not give an investor an edge. Plan for the market not to make sense most of the…
The Flywheel Effect is a concept developed by Stanford Professor Jim Collins in the book Good to Great. He highlights that overnight transformations never happen. Rather, good-to-great transformations occur through the consistent act of doing a lot of little things well, with their results compounding over time.
“In building a great company or social sector enterprise, there is no single defining action, no grand program, no one killer innovation, no solitary lucky break, no miracle moment. Rather, the process resembles relentlessly pushing a giant, heavy flywheel, turn upon turn, building momentum until a point of breakthrough, and beyond.” …
Suppose that on September 1, 2011, a friend emailed you a White Paper titled Bitcoin: A Peer-to-Peer Electronic Cash System.
In her email, she recommended that you “...Transfer $200 to Magic: The Gathering Online eXchange and buy 24 bitcoins…Also consider downloading the open-source software and begin mining bitcoins; they could be worth a lot someday.”
Would you have followed your friend’s advice? Would the techies among you have trusted the open-source software and dedicated resources to mine $8.21 bitcoins?
Most people would have bought or mined a lot more bitcoins had they been quicker to grasp Bitcoin’s use case.
While writing the article “4 Crypto Mining Stocks Positioned To Outperform Bitcoin in 2021”, linked below, I came across 18 additional publicly-traded cryptocurrency mining/blockchain sector companies.
Investors would categorize most of them as “penny” stocks.
These stocks, however, share similar characteristics found in the four mining companies I wrote about:
Investors have been scooping up bitcoins. Their growing interest in acquiring it has caused the price of a bitcoin to increase from $7,200 at the start of 2020 to over $30,000 in 2021.
Given that miners earn bitcoins for performing the proof-of-work required to process transactions on the Bitcoin blockchain, they have been exceedingly profitable. (The higher transaction fees the blockchain charges during periods of congestion have also added to their profits.)
As of January 2021, Bitcoin will have existed for 13 years. Not all investors fully understand it.
Insurance policies, however, have existed for centuries and are commonplace.
Businesses are accustomed to buying insurance of various types. Holding bitcoin in the company treasury is similar to buying yet another type of insurance: one that protects against the liability posed by monetary inflation.
Families are also accustomed to buying insurance policies for their homes, cars, and health. Holding bitcoin as a family asset is analogous to buying an insurance policy that protects the purchasing power of their future earnings.
Bitcoin, moreover, provides…
When Hernán Cortés and his men arrived in present-day Mexico 500 years ago two attributes made gold a prized possession:
When asked by the Aztecs why they were so interested in the yellow metal, Cortés responded:
“…I and my companions suffer from a disease of the heart that can only be cured by gold” ~ Yuval Harari, Sapiens (Gómara, Historia de la Conquista de México, p. 55)
The Conquistadores have not been the only ones afflicted with such disease.
Throughout modern history, central banks have held a significant amount of the world’s…