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April 17, 2020
One month ago, I told you about our new Health and Wealth Portfolio , made up of four traditional stocks that would likely do well during the CoronaCrisis:

  • Amazon (AMZN), which would deliver all our stuff;
  • Netflix (NFLX), which would deliver all our streaming;
  • The Clorox Company (CLX), which deliver all our sterilization;
  • Zoom Communications (ZM), which would deliver all our staff meeting.
After one month, this portfolio has increased 36 percent . If you had invested $10,000 just one month ago, in other words, your holdings would now be worth a whopping $13,627.85.

Those results would be impressive if they were annual returns during a healthy economy. To grow that fast in one month during a downturn is mind-blowing.

As you know, our philosophy is not “get rich quick” but “get rich slowly.” (Play the long game.) So let’s turn to an update on our other long-term play: the Blockchain Believers Portfolio .
Here we also have interesting results:

  • The Non Believers Portfolio, which is basically 2/3 stocks and 1/3 bonds, is up 12.8% since we began tracking this on September 1, 2018. (This would be your plain-vanilla portfolio with no digital assets, for reference.)
  • The Baby Believers Portfolio, which is the same thing but with a tiny slice (2.5%) of bitcoin, has outperformed (13.6% vs. 12.8% growth). That sliver of bitcoin makes a difference, as it helps cushion the stock market fall.
  • The Big Believers Portfolio, which has a slightly higher percentage invested into the top 3 (bitcoin, Ethereum, Ripple), has done about the same as the Non Believers (12.7% vs. 12.8% growth). 

Since the time we started tracking this portfolio until today:
  • Stocks are down -7.2%
  • Bitcoin is up +0.1%

This has big implications.

When the CoronaCrisis began, everyone expected bitcoin to be the “safe haven” as people fled the traditional stock market. When it didn’t happen overnight, everyone lost faith. But these things take time.

Think about how hard it still is to buy bitcoin. It’s not like people can just move over stocks to bitcoin in their E*TRADE account (yet). They’re separate markets, with a huge wall between them.

But as governments around the world look for ways to relieve the deepening financial pressure, and investors increase their demand for non-traditional assets, these walls will crumble.

Before we're through this, bitcoin will finally go mainstream.
There’s Always Opportunity
While there is real suffering with this crisis – from the cost of human lives to widespread economic hardship – there is also opportunity.

This is the finding of a great article by George Day and Paul Schoemaker recently published by The Wharton School . They outline three principles for how businesses can manage the CoronaCrisis, which can be equally applied to investors:
Principle One : Put out the immediate fires . In investing terms, this means to shore up your cash reserves, to be sure you’re set for a prolonged and systemic financial crisis.

Principle Two: Be agile . Nobody knows what the future will hold, or how long this recession will last. So we take it One Day at a Time (#ODAT). We adapt. We adjust. We keep tabs on “ground conditions” by talking to a lot of people, observing the world around us, and quickly course-correcting.

Principle Three: Skate to Where the Puck Is Going. As the hockey legend Wayne Gretzky once said, “I skate to where the puck is going, not where it has been.” He had an uncanny ability to foresee a few seconds into the future, as you can see on this vintage VHS-era video:
Where is the puck going? We’ve been laying out some of these principles in our recent newsletters:
  • Printing money: More nations will use quantitative easing to help their citizens make it through. What will this mean for inflation rates? Will the U.S. remain the dominant reserve currency?
  • Economic stimulus incentives: To get industries restarted, governments will likely offer rebates on mortgages, cars, appliances, and other “big ticket” purchases. Which companies will benefit
  • Small business help: To keep workers employed, governments will likely pump more money into small businesses (it’s more expensive in the long run to lay off than to furlough).
  • Bailouts: Core infrastructure industries (airlines and potentially banks) will need help staying afloat. Who will receive bailouts first? How will these industries change in a few years?
  • Digitization of money: We’ve seen the pain of quickly getting all this money into the hands of the people who need it. How will this speed up the development of a “digital dollar”?
  •  Globalization of money: As we’ve discussed over the past few weeks, a global crisis requires a global response. Expect to see the IMF take a bigger role in overseeing a kind of “world money.”

This is a lot to think about. But the principles are to put out immediate fires , play the long game , and invest in the opportunity .
The entire world order is changing. Opportunities are everywhere.

Health, wealth, and happiness,
John Hargrave
Bitcoin Market Journal
Hi Everyone,

If you're still unsure what caused the 2008 crisis, the movie The Big Short is  available on Netflix  and should sort you out. Though if you're reading these updates, I'm going to assume you've already seen it, or you don't need to.

One of the star investors of the movie, Michael Burry, was the first one to notice the anomaly in the mortgage market and he's now spoken out against the overbearing shutdowns and instead advocates common sense awareness-based prevention methods.
Not sure how I missed this but Burry has been tweeting his heart out over the last few weeks and even did a magnificent  interview with Bloomberg  slamming the global response to COVID-19 and explaining how the damage to the economy can potentially be more harmful than the disease itself. Of course, he's not alone...
It does appear though that many of these protests are very political in nature and to me it almost looks like the United States is incapable of separating coronavirus from partisan politics. This is something we discussed at length on a live stream panel last night hosted by Philip Kennedy. In addition to a hot debate about inflation and deflation and what comes next. Be sure to catch  the recording here .

Meanwhile, the President's plan to re-open the economy was quite detailed in the various phases in which things will go back normal. However, one critical detail that was left out was when? It seems that individual states will need to make that call as they are ready.

Still, the plan as proposed does call for a very high testing regimen, one that most states say is simply unattainable given the testing shortages. On the bright side though, markets are getting optimistic today over a new  experimental cure  that's showing some good initial results. 

Of course, when you have inordinate amounts of money flowing in from Congress and the Fed, you can afford to be inspired by things like initial results of untested drugs.
Inflection Points

Since we still don't have a clue how long it will be before the economy gets back on track, nor what things look like at present, let's go over a few charts to see where things stand at the moment.

The first one I'd like to show you is the Dow Jones huge drop and rapid recovery. Using the famous Fibonacci retracement tool, we can see that we're now exactly at the half way mark between the top and the recent bottom.
Though gold did drop initially during the initial panic phase of the COVID-19 lockdowns, it's now pushing fresh highs. I'd be very careful about FOMOing in at these levels though. With the chart looking like this, there's a fair likelihood of a pullback before trudging forward, especially with the optimism shown in the stock markets.

For myself, I've taken some profits now but still keeping some exposure on in case it does pop the top. If not, I'd prefer to add to my long position near $1,560 per ounce and below.
No chart needed for Crude Oil, just the statement that it's dropped below $20 again should be understandable enough. 

Last but certainly not least, we can't do charts without showing bitcoin. But unfortunately, there aren't really any angles where I can find a clear setup. On the short term, we're in a tight range (aprox $6,500 to $7,400) and in the long term this range has flipped many times from being considered high to being considered low.

So, for the sake of a clear visual. Bitcoin's price is perfect right now. Not too high, not too low. As Goldilocks would say, it's just right.
Let's not forget though, that the fundamentals of bitcoin will soon be altered during the halving as the inflation rate is cut in half from 3.66% to 1.8% per year.
Weekend Viewing

That's about it for this week. Overall, it's been a good week and we're making a lot of progress. For myself, I must have done 10 interviews, which is a friggen miracle if you consider my kids are on furlough so finding times when the house is quiet can be difficult. At least until the lockdown is over and I can build a proper video studio.

In the meantime, here's my favorite interview from this week, which is with the legendary Monty Munford, who is self-isolating ins Sussex. What I really like about Monty's style is that he feels very free to take an equal amount of stage time so he doesn't make me do all the talking, which is how a real conversation should be. So we can both share ideas, information, and opinions. 
Wishing every single one of you a fantastic weekend. Don't forget to wash your hands!

Best regards,

Mati Greenspan
Analysis, Advisory Money Management