Gold beats bitcoin…at last

Thursday, 18 January 2018
Melbourne, Australia
By Kris Sayce

  • The ‘everything rally’ (bar one)
  • No timewasters
  • The ‘money tree’ does exist

The opportunity to join Sam Volkering’s Crypto Tech Investor closes soon.

If you want in, and providing you’re on the priority access list, check your email now. Because within days, the access period will close.

After that, we don’t know when we’ll reopen it. The recent crypto price-crunch has certainly shaken out many investors.

But Sam says that creates what could be a stunning opportunity for new investors to get on-board.

(Incidentally, we’re publishing a special guest essay at the end of today’s Port Phillip Insider.)

Based on the difference between yesterday’s prices and today’s, it already has been. Here’s how Sam’s eight open crypto picks are faring right now:

  • Crypto 1 — up 692%
  • Crypto 2 — up 285%
  • Crypto 3 — up 1,580%
  • Crypto 4 — up 1,836%
  • Crypto 5 — up 552%
  • Crypto 6 — up 1,223%
  • Crypto 7 — up 731%
  • Crypto 8 — up 438%

Yesterday, the average return on those cryptos was 715%. Today, the average return on those same cryptos is 817%.

We’ve said it before, but we’ll say it again: We’ve never seen a track record like this. You just don’t see opportunities where the average return across eight investments increases by 100 percentage points in such a short time.

That’s what makes Sam’s service so special. Anyway, if you’re on the list, check it out.

Markets

Overnight, the Dow Jones Industrial Average closed up 322.79 points, or 1.25%.

The S&P 500 gained 26.14 points, or 0.94%.

In Europe, the Euro Stoxx 50 index fell 9.23 points, for a 0.25% fall. Meanwhile, the FTSE 100 lost 0.39%, and Germany’s DAX index fell 0.47%.

In Asian markets, Japan’s Nikkei 225 index is up 110.27 points, or 0.46%. China’s CSI 300 is up 0.35%.

In Australia, the S&P/ASX 200 is up 8.69 points, or 0.14%.

On the commodities markets, West Texas Intermediate crude oil is US$64.25 per barrel. Brent crude is US$69.59 per barrel.

Gold is trading for US$1,326.09 (AU$1,666.03) per troy ounce. Silver is US$17.02 (AU$21.38) per troy ounce.

The Aussie dollar is worth 79.6 US cents.

Bitcoin is US$11,729.31.

The ‘everything rally’ (bar one)

You see the current bitcoin price above.

Earlier this morning, it was over US$2,000 lower, at US$9,185. The three-day chart below shows the rapid fall and rise:



chart image

Source: Bloomberg
Click to enlarge

Where will it go next? Not being an expert in the realm of cryptocurrencies, we stay firmly on the fence.

We predict [squeezes eyes fast shut] that it will go up and down (or vice versa).

Something else we know is that it’s likely no coincidence that the bitcoin price peaked on 8 December…plateaued…and then peaked again on 19 December, before beginning its decline.

8 December was the date of the Port Phillip Publishing Christmas Party. Each year we hold a staff raffle to give away prizes.

This year one of the prizes was $200-worth of bitcoin. Or rather, that was the plan. Unfortunately, it fell to your editor to make the arrangements.

Our incompetence got the better of us. So several days later, we admitted our failure to the prizewinner, and gave them $250 of vouchers instead (the bitcoin price had risen in the meantime — we felt guilty).

Another one of the prizes was a one-tenth-of-an-ounce gold coin — costing around $260.

We wondered which would be worth more come our 2018 Christmas party. Secretly, we were certain we knew the answer. Today, the bitcoin price (white line on chart below) is 26% below where it was on 8 December.

The gold price in Aussie dollar terms (orange line on chart below) has barely moved — $15 higher, if we’re lucky:



chart image

Source: Bloomberg
Click to enlarge

So far, gold is winning.

But there’s something more interesting than that. Folks refer to the current high asset prices as the ‘everything rally’. But as James Grant noted in his mid-December newsletter, everything has gone up…except gold.

It’s true.

Over the past five years, the Dow Jones Industrial Average has risen 90.5%. Overnight, it closed above 26,000 points for the first ever time.

What’s more, it took the index just eight days from when it closed above 25,000 points for the first time to when it closed above 26,000 points for the first time.

It is, we believe, the fastest 1,000-point new-high rally in the history of the Dow.

Of course, a 1,000-point rise from 25,000 to 26,000 means a lot less than a 1,000-point rise from 10,000 to 11,000. The former represents a 4% increase. The latter represents a 10% increase.

Still, as any Fibonacci aficionado will agree, numbers are important. Despite the small percentage increase, it means something for the Dow to hit 26,000 points.

And you can bet your very last dollar that it will mean a heck of a lot more if or when the Dow hits 30,000 points.

The FTSE 100 is up 39% since February 2016.

Germany’s DAX index is up 146% since September 2011.

The NASDAQ index is up 244% since August 2010.

The gold price is down 21.6% since January 2013.

Yes, it has rallied since a recent low in late 2015. The difference is that all the other asset prices are at record highs. The gold price remains significantly below its record high.

Even the crude oil price has had a bouncier time of it. Like gold, it’s down from a record high. Yet it’s up 118% since February 2016.

And do we really need to mention that even after the bitcoin price has spiralled downwards, it’s still up 68,513% since early 2013.

However, in spite of these rising asset prices, in mid-December, The Wall Street Journal noted:

For years, the historic run higher for U.S stocks has been characterized as a “hated” rally, one that has consistently vexed investors with rising prices in the face of widespread scepticism.

If anything, repeated record highs in 2017 have only made money managers more dour.

Big investors are heading into 2018 with the most bearish perspective on stocks since the great financial crisis, according to Boston Consulting Group’s annual investor survey.

But, just a month later, CNBC today reports:

Stock market optimism among professional investors just keeps on surging, and is now at the highest levels since before the crash of 1987.

Bullishness, or the belief that the market is heading higher, is now at 66.7 percent in the latest Investors Intelligence survey, a widely followed gauge of sentiment among investment newsletter authors.

Hah! Our colleagues in the newsletter industry are to blame. Fools. (No pun intended, if you get our drift.)

The report continues:

That’s the highest level since early April 1986 — a potential warning sign that the rush into equities is getting overdone. After all, a year after the bulls had reached this level came the infamous Black Monday crash that sent the Dow Jones industrials down nearly 22 percent in a single day.

We have no doubt that rising stock prices are luring more investors into the market.

They really do fear missing out on the next big price surge. If it has only taken eight days for the Dow to rise 1,000 points…maybe it will only take four or five days for it to close above 27,000 points for the first ever time.

Then we’ll be certain the market is at or near a top.

So, everything is going up (except gold). And it seems that, right now, the only way to convince a bearish investor that the market isn’t overvalued is to wait for the price to go up even more…and then show them what they’ve missed.

That’s all the convincing they need.

With the way the markets are going, it’s all the convincing anyone seems to need.

No timewasters

Investors are funny. When crypto prices were going up, folks grumbled because they said they’d missed out — if only the price was lower.

Now prices have tumbled, they don’t want to touch it — if only the price was higher!

It’s hard to know what to make of it all.

All we know is that Ryan Dinse has developed a strategy to help hardcore speculators trade in and out of cryptos. It’s risky but, if you’re game for a punt, and you see lower crypto prices as an opportunity to buy, now could be the perfect time.

We’re reopening the doors for Ryan’s Extreme Crypto Trader service next week. But in order to get in, you must put your name down on the invitation list.

No timewasters please. To get details on how it all works, go here .

Now, over to Sam Volkering…

Cheers,
Kris


The Money Tree Does Exist
By Sam Volkering

I’ll never forget the day I discovered bitcoin. It took a little while to convince myself of what I was seeing. My belief was that I had uncovered the elusive ‘Money Tree’.

At the time, I had to double-check. Surely it wasn’t possible? All my financial education and experience said it wasn’t possible.

After all, we all know there is no such thing as a money tree…

My folks, both teachers, had always instilled a sense of work ethic in my brother and me. They were always pushing us to be the best we could be. To make sure that we applied ourselves. And if we did, we’d go through life and do well for ourselves.

Also, being teachers, they weren’t exactly what you’d define as ‘rich’. But they worked hard. And looking back, I know they sacrificed a lot for us.

You only realise these things later in life.

Home life wasn’t full of million-dollar mansions and Porsches in the driveway. But my brother and I never lacked anything.

We always had smart, new clothes. But, if we pined for the latest pair of Air Jordans, we didn’t just get it no questions asked. In fact, my first Jordans I bought for myself.

It was a balancing act for mum and dad to make sure we didn’t lack for nothing while at the same time ensuring that we weren’t being overly careless with money.

This approach to smart money management was further enhanced by the lesson of the money tree. A typical conversation went as follows:

‘Dad, can I have $10 to go buy some more basketball cards?’

‘No mate. Unless you want to go into the backyard and grab some from the money tree…then no.’

Obviously, when I went to the backyard, there was no money tree in sight. There was a passionfruit vine. A lemon tree. A shed. A basketball ring. A trampoline. And a ‘Kanga Cricket’ set.

But no money tree.

The money tree didn’t exist. It never existed. And it never will. Money doesn’t grow on trees. It’s not a lesson unique to my brother and me. Most kids go through the lesson of the money tree.

And for my life as a child, growing into a teenager and young man, I always knew that there was no such thing as a money tree.

Until I discovered bitcoin in late 2010.

This was a money tree.

You could mine (solve) an algorithm using the computer and get a reward of bitcoins. They, in turn, were worth money. And maybe one day, you could go and buy things with bitcoins.

At the time, this was by all definitions a money tree. Back then there were many things I would have done differently, like stock up on more bitcoins. But you live and learn from mistakes past.

Today, although the process of mining bitcoin — tapping the money tree — isn’t so easy, it can still be profitable in the long term. But for the average person trying to mine bitcoin at home, it’s not worthwhile.

I gave it another shot recently. But, when you’ve got a bitcoin miner whirring away at 76 decibels next to you while trying to work, you quickly realise that it won’t last.

Regardless, the money tree is real. And the opportunity I saw in bitcoin was real. And eventually, I was able to recommend bitcoin to my subscribers. Today (even after this week’s terrifying volatility) they’re sitting on gains of over 1,500%.

I also introduced my subscribers to other cryptos, two of which are now sitting on gains of 1,922% and 1,090%.

I recommended these at the time because they were the best opportunity for making life-changing wealth I’d ever seen. And in my life, there have been three moments where I’ve stood back and thought, ‘This is the moment when fortunes are properly made.’

One was my initial discovery of bitcoin.

The second was at the start of 2017 when I could see mania brewing.

The third is today. And this new wave of immense wealth creation is coming in the way of initial coin offerings, or ICOs.

I’ve been in the crypto game long enough to be able to spot a scam. I know how to analyse projects, teams, and whitepapers, looking beyond the hype. You don’t learn that in six months. It take seven years of experimenting, understanding, learning, making mistakes, being a victim of fraud and theft, and knowing what success looks like.

And while you’ll hear negative press about ICOs and the dangers they pose, these shallow views miss one very important factor:

This is a creation event. It’s a democratisation of capital. The whole world now gets to fund exciting start-ups. And it’s done through the issuance of crypto tokens. Some of these will turn into global giants of industry. They will be the Amazons, Googles and Facebooks of the next decade.

Investing in the right ICOs is as big as investing in bitcoin when it was US$1 per coin. Or when Ethereum launched its ICO years ago.

Today you have the chance to be part of what is, in my view, the single biggest wealth creation event the world has ever seen.

Regards,

Sam Volkering,
Editor, Secret Crypto Network