The Last Presidential Debate Before the Election #31
Market Meditations | October 23, 2020
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Today’s Meditations:
The Last Presidential Debate Before the Election
Paul Tudor Jones Says He Likes Bitcoin Even More Now, Rally Still in the ‘First Inning’
Paypal Is Looking to Acquire Crypto Companies, Bitgo Named as Potential Target
Filecoin Network Upgrade Goes Live, Miners Claim 25% Block Rewards
Meet NextEra, America’s Most Valuable Energy Firm
Ray Dalio: Don’t Be Blind to China’s Rise in a Changing World
Bitcoin Hits its Highest Level Since 2018 but Macro Traders Are Split on Buying
Layah Heilpern: Female Journalist on What It Takes to Succeed in Crypto
El Flojo Trabaja Doble – The Lazy Works Twice
The Last Presidential Debate Before the Election
Last night marked the last U.S. presidential debate before the election on 3rd November. The presidential and vice presidential debates had so far resembled more of a Netflix drama than a substantial conversation around policy. The ‘winner’ of the U.S. vice presidential debate seemed to be the fly that landed and sat on Pence’s head for 2 minutes. As for the previous presidential debate, one could hardly make out a word that was being said amongst the interruption and chaos.
Last night’s debate was far better managed. Thanks to the mic muting policy being upheld and enforced, the presidential candidates did not interrupt each other and rather than take to petty remarks, the organised conversation meant the two men could lay out their closing arguments on almost every topic: the coronavirus, immigration and race relations.
Some highlights in the clip below, followed by commentary.
If there are two things you should take away it is that:
1) Biden is still in the lead to win the U.S. Presidential Election and;
2) If Biden does win the election, renewable energy will be a clear focus (with negative implications for non-renewables).Biden’s best moments occurred when he resisted taking the bait as Trump accused him of being corrupt, leading Biden to call out Trump for failing to release a single tax return. “What are you hiding?” Biden said. Trump didn’t really help himself when he claimed that he was the best president for Black Americans since Abraham Lincoln. Biden could easily point to occasions where Trump exhibited racism: his stance on immigration and his muslim ban, for instance. Trump did manage to score some points. He resurrected the parts of his persona that won him fans in 2016, contrasting his outsider’s stance to Biden’s 47 years in public life.
Biden made his stance on renewable energy very clear (some would argue to his detriment). First through his comments on ending fracking and then by acknowledging he wanted to eventually eliminate the oil industry. “I would transition from the oil industry, yes. The oil industry pollutes significantly. It has to be replaced by renewable energy over time.” Trump took his opportunity to maximise the damage: “Basically what he is saying is he would destroy the oil industry. Would you remember that Texas? Would you remember that Pennsylvania, Oklahoma, Ohio?”. Clearly if you believe Biden will win you ought to cast an eye on increasing exposure to renewable energy or companies/ventures/start ups that target sustainability.
So while it does seem that Biden is ahead (with the debate failing to put Trump in the polling lead) and therefore we should be considering trading opportunities off the back of a Biden win, it would be foolish not to remember the past. Trump already overcame a polling deficit once to win in 2016. The approach: proceed to plan for a Biden win with caution.
Paul Tudor Jones Says He Likes Bitcoin Even More Now, Rally Still in the ‘First Inning’. It’s been six months since Paul Tudor Jones, a billionaire hedge fund manager, announced to the world that he was putting some of his assets into bitcoin. In an interview with CNBC yesterday, Paul Tudor Jones said that “I like bitcoin even more now than I did then. I think we are in the first inning of bitcoin and it’s got a long way to go.” Because of the unprecedented quantitative easing (QE) by the Federal Reserve, Jones thinks that bitcoin is the best inflation trade and potential hedge against the aggressive central bank monetary policy, after calling it ‘the fastest horse’ in his paper in May. “Bitcoin has this enormous contingence of really, really smart and sophisticated people who believe in it,” Jones said. “It’s like investing with Steve Jobs and Apple or investing in Google early.” Read more.
Paypal Is Looking to Acquire Crypto Companies, Bitgo Named as Potential Target. More new from PayPal after the major headline earlier this week. According to a new report from Bloomberg, Paypal not only plans to support several cryptocurrencies like initially announced but is also looking for potential crypto company acquisitions. BitGo, a company that raised $58.5 million in 2018 at a $170 million valuation, was one of the firms named in the report. “PayPal has been holding talks with BitGo, a company that helps investors store Bitcoin securely, and could reach a deal within weeks, the people said, asking not to be identified because the matter is private. Talks could still fall apart and PayPal could opt to buy other targets, the people added.” There were no details about the size of the deal yet. Read more.
Filecoin Network Upgrade Goes Live, Miners Claim 25% Block Rewards. We wrote about Filecoin miners going on strike in our Monday edition but the latest upgrade allows miners to claim some block rewards without waiting on a vesting schedule. At block height 170,000, Filecoin activated the FIP-004 change, a mandatory upgrade, allowing miners who upgraded to start mining immediately without said vesting schedule. Before the upgrade, rewards for miners were released linearly over 180 days. After upgrading, they will receive 25% immediately while the remaining 75% will still be vested in the coming six months. According to The Block, Filecoin miners were producing roughly 150K FIL, the network’s native cryptocurrency, over the past 24 hours. Based on that rate, more than 40,000 FIL of the daily block rewards would be released to miners under the new system. Read more.
Meet NextEra, America’s Most Valuable Energy Firm. The clean-energy utility has surpassed ExxonMobil in market capitalisation – and shows no signs of slowing. To many investors, backing an American oil company looks only slightly shrewder than stuffing cash in a blender. This comes particularly after Biden’s comments and the oil industry. Facing Covid-19 and old concerns over low returns, the industry is scrambling to boost efficiency. On October 19th ConocoPhillips said it would pay $9.7bn for Concho Resources, a Texan fracking firm. The next day two other frackers, Pioneer Natural Resources and Parsley Energy, announced a $4.5bn tie-up. Across the sector, oilmen are vowing to put profits before growth. How about a firm that offers both? As America’s oil industry flails, its most valuable utility, NextEra, has soared. It is already the world’s top generator of wind and solar electricity. When NextEra presented its latest quarterly results on October 21st, it said it now has about 15 gigawatts of renewable projects in its pipeline, larger than its entire existing renewables portfolio. Net profit jumped to $1.3bn, up by 13% year on year. Read more.
Ray Dalio: Don’t Be Blind to China’s Rise in a Changing World. For as long as I can remember, people have said that China cannot succeed. Communism doesn’t work. Authoritarianism doesn’t work. The Chinese aren’t creative. They have a big problem with bad debts and property speculation. Yet every day we see China succeeding in exceptional ways. It has achieved some of the world’s lowest Covid-19 case rates. Over the past year, its economy grew at almost 5 per cent, without monetising debt, while all major economies contracted. China produces more than it consumes and runs a balance of payments surplus, unlike the US and many western nations. This year nearly half the world’s initial public offerings will be in China, including Ant Financial’s $30bn listing, the world’s biggest ever. Even Tesla’s best-selling Model 3 car may soon be made entirely in China. As a global macro investor, I think a lot about how much I should invest where, looking at fundamentals and how others are positioned. China’s fundamentals are strong, its assets relatively attractively priced, and the world is underweight Chinese stocks and bonds. These currently account for 3 per cent or less of foreign portfolio holdings; a neutral weighting would be closer to 15 per cent. Read more.
Bitcoin Hits its Highest Level Since 2018 but Macro Traders Are Split on Buying. Bitcoin prices climbed more than 3% to levels not seen since January 2018 on Thursday after PayPal’s announcement that it would be launching a cryptocurrency service. Up nearly 23% month to date, bitcoin has grabbed the attention of hedge fund manager Paul Tudor Jones, who told CNBC on Thursday that cryptocurrency would be the best inflation trade in a time of widespread quantitative easing. Another trader warned that owning bitcoin is no easy feat given it behaves like a commodity (‘a supply and demand business’). The trader went on to say: ‘I think there still has to be a lot more standardisation and regulation around how this is going to trade. It is a bit of the wild, Wild West with these momentum trades just really whipsawing it. One announcement for increased demand pushes the price really high and then you lose that value within a month’. Read more.
Layah Heilpern: Building a Crypto Career, Women in Crypto, Social Media Growth
Layah Heilpern is a journalist, presenter and cryptocurrency influencer from the UK. She is the host of The Layah Heilpern show, runs her own business and inspires people to take personal responsibility through motivation and coaching.
We discuss plenty of things, starting with why Layah stopped working on her dream job as a journalist and how she transitioned into crypto after that. We also talk about how women fit in the crypto community, her view on crypto & how she invests in it. Last but not least, Layah also gives us plenty of life & business advice for starting your own crypto related business and how beneficial surrounding yourself with positive people can be.
Things I learned:
Dare to take the leap. If the universe laughs you in the face, it’s trying to redirect you. There are often things in life we want or are too afraid to find out but that shouldn’t hold us back.
Everybody has a different vision of success. Do the best you can and give it your all.
Crypto is inherently political with values such as self sovereignty and independence. It can Inspire people to take personal responsibility for their finances, relationships, health and career.
Slow transaction fees as Bitcoin’s worst character threat doesn’t have to be a problem. Are we looking at it as a global currency or as a store of value like gold is? Bitcoin’s value depends on why you’re using it.
If you have a large audience, you should be careful having strong opinions on sensitive topics. Always make sure you can back it up.
Luck is a by-product of preparation. Put yourself in a position where luck finds you.
Surround yourself with people that motivate you and push you up. If they believe in you, you believe in you. You become the sum of the 5 people you spend the most time with.
Brand equity is the secret to growing an online business. Accumulate online capital, build a subscriber list. The way you do this is by doing something different, innovate.
Value doesn’t have to be educational, it can also be entertainment.
El Flojo Trabaja Doble – The Lazy Works Twice
“Most men spend more energy coming up with excuses than if they simply found the fix to their problems.” – Leo Tolstoy
Laziness is a character trait that many of us share from time to time. As humans, we tend to look for shortcuts and ways to avoid having to do all the work up front. Charlie Munger famously jokes that people often ask him how to become as rich as him, only quicker. We want to be rich now, not in 40 years when we’ve already ‘wasted’ most of our time. We want that fit and lean body today instead of consistently paying attention to our diets and exercise regimes. We want the reward, without willing to do the work that is required
A Spanish proverb I came across this week reminded me that looking for shortcuts isn’t always the most time efficient way of doing things. El flojo trabaja doble, which translates to ‘The lazy man works double’ reminds us that simply doing the hard work upfront is actually less work than trying to find ways around it. In a thoughtful essay, Blas Moros expands on this principle through his own experiences. “Every single time I tried to find a shortcut, it ended up backfiring.The cramming I did to pass a test hurt me in the long run when I had to repeat the process for the final just a little while later. The warm-up routine my tennis coach advised me to do, but avoided, eventually caused me injuries, frustration,and lost time.”
Like Tolstoy said, sometimes it’s better to simply fix the problem instead of coming up with excuses. Instead of letting procrastination hold you back, take matters into your own hands and start working towards your goal, little steps at a time. As we wrote a few weeks back, small efforts done consistently can compound into enormous results. What are you waiting for?
Disclaimer: The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. I am not a financial advisor. Every investment and trading move involves risk. Do your own research when making a decision.
