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The Technology and Money Frontier:

Bitcoin and Blockchain Revealed


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January ended on a very strong note for the financial markets but this past week we have given back many of the gains made so far this year.
As I mentioned in last month's newsletter, 3 corrections a year of approximately 5% is normal volatility for the financial markets. While this may be unnerving for some investors, I am happy that some of the over valuation has now left the overall market.  Much of this was triggered by interest rates starting to move up and exacerbated by high frequency and program trading.
Even with this most recent decline, the market is still up over 30% from the 2016 elections.  Keep in mind that it is not just the market, but a market of stocks. History has shown that companies with low debt and strong cash flow do well in high interest rate environments. At CAIM this is a strong focus in our stock selection.

Wishing you a very Happy Valentine's Day!

Warm regards,
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Catherine Maniscalco Avery
 
The backbone of CAIM is to employ a classic long term investment strategy including dividend paying stocks. CAIM is an independent, women owned investment management firm specializing in managing investment portfolios for women and baby boomers.

203.717.1850  p
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February 9, 2018   Issue No. 89
In This Issue
Bitcoin/Blockchain Revealed
4/4 2017 Mrkt Commentary
Holiday Stocks 2017
Quick Links
Find Out More
Call me at 203.717.1850
or visit www.caimllc.com.

 


        
The Technology & Money Frontier:   

Bitcoin and Blockchain Revealed
  

Investments in Blockchain technology continue to grow and the projected numbers are staggering. " The market for blockchain-related products and services will reach $7.7 billion in 2022, up from $242 million last year, according to researcher Markets & Markets," writes Bloomberg at Fortune.com   But what is Blockchain technology you ask?   To explain we go back to where it all began - Bitcoin. 
 
Bitcoin Revealed 
Bitcoin " was invented as a peer-to-peer system for online payments that does not require a trusted central authority." Buybitcoinworldwide.com   Its' original purpose?  As a transaction agent for drug deals on the dark web!

Today
Bitcoin (the system) and bitcoins (the digitized currency) have gone mainstream, so to speak, and are used by people and businesses for electronic purchases and transfers across the Internet. Bitcoin is a direct form of transaction mode i.e. there are no third parties involved.  

Many large companies like Word Press, Overstock.com and Reddit accept bitcoins, as do a growing number of brick and mortar stores.   In fact more than $1.5 billion worth of bitcoins are currently in circulation around the world, with millions of transactions occurring daily, according to Raghu Kumar, co-founder of RKSV, a leading low-cost broking firm at Profit.ndtv.com.
   And underpinning this unique new mode of transaction?   You guessed it, Blockchain technology.   
 
Blockchain Revealed 
"Bitcoin is a digitized form of currency that works via a kind of online public ledger underpinned by the software program Blockchain," writes Matt Lucas of Global Blockchain Labs Enablement at  IBM.com 

Blockchain, by design, is a decentralized technology. "A global network of computers uses blockchain technology to jointly manage the database that records Bitcoin transactions. That is, Bitcoin is managed by its' network, and not any one central authority." Wikipedia.com

This is its' strength, according to Bloomberg at Fortune.com.  "The blockchain enables companies doing business with each other to record transactions securely.  Its' strength lies in its trustworthiness: it is difficult to reverse or change what's been recorded. The blockchain can also hold many more documents and data than traditional database storage, allowing for more nuanced insights and analysis." 

Blockchain Unchained 
Blockchain is best known for its' underpinning and support of the cryptocurrency bitcoin. More recently, however, the technology has been modified for use in an ever wider circle of transaction types.  

Today, according to Lucas of Global Blockchain Labs Enablement at IBM.com:  "Tangible assets such as cars, real estate and food products, as well as intangible assets such as bonds, private equity and securities are all fair game."  

Further, companies that work in tandem with other businesses to deliver services and goods find huge advantages from using the Blockchain technology.
"For businesses, the opportunities to secure supply chains, eliminate middlemen, and cut costs are increasingly compelling,"says John Jeff Roberts writing at  Timeinc.net/Fortune.com

"The benefits of blockchain for business are numerous, including reduced time (for finding information, settling disputes and verifying transactions), decreased costs (for overhead and intermediaries) and alleviated risk (of collusion, tampering and fraud), "writes Lucas at IBM.com 
 
Investing in Blockchain? 
When even old school companies like IBM and Visa are going all in on a technology, and almost 6 in 10 large companies are considering using it, you know it's something worth investigating, if not investing in.  Bloomberg/Fortune.com  

But let's say that while you want to invest in this exciting new technological frontier, you are overwhelmed with all the information, and not sure where to begin.  That's OK because here at CAIM we have several companies in our portfolio that are already invested in the Blockchain software, including IBM and Cisco.  

IBM was one of the first big companies to see Blockchain's promise,
contributing code to an open-source effort and encouraging startups to try the technology on its' cloud for free.   Bloomberg/Fortune.com     IBM's involvement with Blockchain is extensive, notes Bradley Fink of Bitcoin Magazine at Nasdaq.com  

Cisco regards Blockchain important enough to assign a person in charge of the technology at the company. They also put together a 48 hour brainstorm with t
eams of Cisco employees, users, experts, and representatives from customers like GE, DB Schenker, Citi, and Intel in order to devise new and innovative ideas for incorporating Blockchain into the supply chain, according to Stephanie Chan/Cisco writing at Cisco.com 

For more information and/or questions on investing in Blockchain's technological revolution call us at CAIM 203.717.1850. 
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4th Quarter 2017 Market Commentary
 
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