I still see many people still calling crypto a bubble and thus it is unsustainable. I mean the price rise looks pretty crazy...
The same with tech stocks and their "overvaluation"....
I remember personally saying the same about Amazon, pretty much since inception.
But I didn't get it was not a discounted cash flow business but a future potential cash flow business - a network effect stock valued on Metcalfe's Law. And thus it was exponential in nature and required log chart to understand....one bubble 2000, the rest normal...
And the NDX is the same - one bubble in 2000 and the rest, normal and correctly priced.
And Bitcoin is the same...one bubble in 2013 and a mild one.
It's a new business model - network effects. It forces us to re-think valuation and 30 years of outperformance over time suggests we cant ignore it and write these trends off as bubbles. But they are volatile and that is ok as there is no reward without risk.
And that is all without using one chart of the Fed balance sheet as a denominator 😜
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A bit of shade being thrown about the Banana Zone. Let me clarify...
Macro Summer and Fall are driven by the global liquidity cycle that exhibits clear cyclicality since 2008.
Why since 2008? Well, back then the worlds all reset their interest payments to zero and they debt maturity to 3 to 4 years, creating a perfect macro cycle.
You can see the perfect cyclicality in ISM (the best guide to the business cycle)
Well, the genesis of ALL my thinking comes from Global Macro Investor, where @BittelJulien and I do our deep thinking each month (120 pages+).
I'm immensely proud of GMI and Ive been writing it for 20 years.... 1/
It is an expensive research service and is subscribed to by many of the world's largest hedge funds (usually the principals), SWF's, Asset managers, RIA's, Family Offices and HNW investors.
It also has the best proven and recorded track record of any research service...ever.
A 20-year track record of performance is not something that any other service provides.
My track record has many 100% plus years (thank you crypto!), many decent years, some so so and some bad ones. But it is all timestamped and transparent.
What is Macro/Crypto Summer and why does it matter?
Well, macro summer has started, its the part of The Everything Code cycle where the ISM picks up (GDP growth).... 1/
And that is driven by liquidity, which bottomed at the end of 2022... macro summer and fall are all about liquidity rising and is a core part of The Everything Code thesis...
And that, in turn, lifts tech stocks... they LOVE macro summer and fall...