2 Nov 2021

Let me tell you a trillion dollar secret. I am going to tell you something that will make you a better investor than Warren Buffet. In fact based on what I am going to share with you why not start a hedge fund go to the beach every day while making billions. 

There you have it, I have shared with you the secret to outlandish wealth – the seasonal effect. Academics have been perplexed for decades why this effect persists with so many people in on the secret. Come to think of it I have always screwed up my seasons as I am always running hot. Message to myself pay attention to the weatherman.

The past year has been a tremendous bull market for Chinese Coal Futures. The last 3 weeks has seen a 30% sharp drawdown. With all this climate zero emission talk we might be persuaded to think that the pullback is in response to promised good behaviour. I am a little bit more suspicious than that. I see this as signs that Chinese demand is cooling off. Is Dr Copper leading the way.

While reading stories of incredible wealth gain in the papers, it struck me today how stretched valuations are. I was reading about a youngster worth a lazy $300 million plus based on the IPO of his underpants company. I nearly shat myself when I saw that he made $7 million last year. That places his PE on historic earnings above 70. I guess I should comfort myself by the fact that his company at least makes money 😜.

Before you accuse me of always showing doom and gloom charts take a look at this one showing carbon credits, known as CBL GEO. This looks like a Bitcoin trade, one would think that this is only the beginning with all the carbon net zero talk. I find climate change and carbon emission talks so boring. Could this all be a Malthusian trap?

Get the popcorn today the RBA will meet and make some decisions about rates. A little birdie tells me that no central banker is likely to stand in the way of that freight train. Stay tuned.

The chart below from Kraken caught my attention. It seems that long term holders of Bitcoin continued to hold their positions thus creating supply constraints leading to prices making new all time highs. I remain long term bullish, its amazing this is one train that I am just too scared to get off out of fear of missing out. I support trading around the edges, but a small % of your wallet needs to be in this space. The way central bankers react to the current wave of inflation is going to be a major factor in Bitcoins price action over the next year. We could get the mother of all corrections in Bitcoin if central bankers allow rates freedom to normalise.

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