Stock notes as Bitcoin and Ethereum carry on.

 

Market Talk

The pundits debate on interest rate cuts coming sooner or later. all the while inflation seems to be more stubborn especially in food and housing sectors, where people have needs.

 

Meanwhile as troubling world events, strife and wars continue on - the major markets float at all time highs. Its like an ocean tide that doesn't retreat but only a few stocks in AI and Nivida (for their chips) capture enough interest (on earnings) to make huge gains from here.

Nividia market cap has surpassed the entire value of the Chinese stock market.

But there is another area - Crypto-  that is suddenly surging higher with astonishing movements in stocks related to Crypto.  The volatility is high with whipsaws in prices and traders can be like a group of fickle jokers - BUT ...

 

There seems to be underlying reasons that bitcoin is surging. One is the "halving" event planned in April.  The bitcoin protocol will make it twice as hard to "mine" a share of a bitcoin.   The protocol puzzles that drive the creation of  a bitcoin get more difficult requiring bitcoin miners to ramp up more specialized processors on their racks and requiring them to expand and procure more energy using facilities.  It could be that as investors watch the policies in world government's various fiat currency - that the appeal of a value store that has a limit like bitcoin is in demand.  Indeed, the spot etf's like IBIT have solidified the notion as long term crypto enthusiasts practice their mantra : "HODL - hold on for dear life".  This saying is only as good as the next group of whales that starts unloading big lots , so take such sayings as just that - sayings.  With that all said Bitcoin and Ethereum seem to have an air of conviction amoung some pundits that may lead to higher values.

 

As traders and investors watch current events in the country and the world, certain macro-economic trends seem to be playing out. America is being invaded by illegal immigrants from all over the world and our tax dollars are funding unsustainable economic policies. It is possible that such trends could cascade into serious repercussions on the future ways of America.  Add to the notion that confidence in fiat currencies around the world is waning.

 

Let us proceed to stock talk.

Stock Talk

 

As the value of the dollar dwindles, more people are becoming aware of having "perceived' stores of value that may better inflation.  Stores of value such as Gold, silver and another area becoming quite noticeable to both us retail market watchers and big "whales" and institutions alike. This area is "crypto".  The two most prominent crypto's are Bitcoin (BTC) and Ethereum (ETH).  Bitcoin is seen as a store of value by crypto enthusiasts largely because there is finite number of total coins that can be "mined" going forward into the future. The protocol has events called "halving" where it becomes twice as hard for mining computers to solve the crypto puzzles that result in gaining even a fraction of a bitcoin. The more powerful machines the miner has, the bigger the share of bitcoin.

 Trading Notes:

Both bitcoin (BTC) and Ethereum (ETH) have been having nice runs higher lately. Have you noticed?

Shhhhh. don't tell anybody .  The halving event in April of bitcoin has a feel about it to some and some say - let it fly and it may just fly.

Due to volatility of bitcoin miners, subject to the whims and foibles of management -  it may be safer or less stomach turmoil to just hold some shares in an etf like IBIT . 

One caveat on "perception" and stocks is that the market can be a fickle two headed beast -- so take anything with risk in a cautionary "some or none" mode and not "too much" mindset with dry powder for sure.  Anything can happen and it will indeed.

 Watch areas:

IBIT - new Ishares spot bitcoin etf, recently approved.  After "the halving"  or as it approaches in April, theoretically bitcoin could move higher. It remains to be seen about theory vs reality. Update - That was true a week ago. Since then, Bitcoin and Ethereum are taking off. see the byline header.

Crypto Itself : Bitcoin (BTC) and Ethereum (ETH).  watch these as April approaches.  some crypto "gurus" are touting ETH as "Crypto 2.0" and "next gen crypto".  Rumors of some big investors accumulating ETH.  These are also volatile and should be treated with risk awareness.  Bitcoin and ETH are not "stocks" but a form of alternative "store of value" as crypto nerds like to say.  But they can be bought and traded like stocks. Just be aware to keep track for tax reporting loss and gains to Uncle Sam. This does not seem to be something to put it all in - but crypto followers dollar cost average here and there in case the fiat suffers too much in true value. 

The one thing to remember is that after April, it becomes twice as difficult to mine bitcoin. That is why the miners are scurrying to buy more mining rigs or "ASIC's"  which stands for Application-Specific integrated circuit miners that use specialized chips.   Still, some IBIT etf shares here and there may be a way to get involved as a way to take part in bitcoin.

INTC - watching Intel chip maker in America. With a large workforce being employed remotely at home, the PC is still an essential part of the game.  Intel also has AI chips in process and made in America investments and funding are making INTC seem undervalued as compared to other chip stocks at this juncture.

Oil and Gas industry stocks and ETF's - 

The oil and gas industry is a volatile sector.  It has proponents and opponents. But the world currently needs oil and gas for energy.  The turmoil in the middle east and the threat to shipping  is a reminder of the important role of America's oil and gas reserves.  There are ETFs that manage oil and gas stocks in the energy sector.  This motley article highlights some ETFS.

https://www.fool.com/investing/stock-market/market-sectors/energy/oil-stocks/oil-etf-stocks/

Then there are individual stocks like OXY,  COP and DVN that stocker's  follow.  Devon Energy DVN has faded down into the 40's and pays a dividend.  Is it time to try a bottom fish on DVN ?  We saw that Vital Energy did not hold the venture into the 50's and is a tough hold. It had an ok 40's run , but failed to get over the 50 hump.  On the other hand stock for stock - DVN has a dividend and is a larger cap issue with lots of resources to expand without share dilution.

Another area of watch is the Uranium sector.  Watching to see if it's an overcrowded  crowded sector for awhile before commenting further.

Let's close by noting that any view on the market and stocks on any particular day may change in the future days to come. That is why we watch and see how our views match up with the reality of the time.  But trying to look ahead a few months into the future may be a way to do things.  If you think too deep about world events and the recent alliances forming, projecting ahead can be a dicey endeavor. With all the above caveats and attempted prognostications, I will close this post. 

Stay tuned for more opining on the market and stocks to watch.

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ALL in my humble opinion, scroll down and read more.

This site does NOT make Buy / Sell recommendations.
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