When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
Global Market Comments
October 6, 2022
Fiat Lux
Featured Trade:
(MY OLD PAL, LEONARDO FIBONACCI),
(TESTIMONIAL)
When asked how he manages the time to be chairman of Microsoft, run the world’s largest charity, and raise three kids, Bill Gates answered, “I don’t mow the lawn.”
Mad Hedge Technology Letter
October 5, 2022
Fiat Lux
Featured Trade:
(THE DEAL GOES THROUGH)
(TWTR), (TSLA)
I believe there are still more twists and turns in the Elon Musk chasing after his favorite social media platform saga.
It’s getting a little out of hand now.
It seems like it’s the story that will never burn out, yet it gives us deep insight into the state of the tech industry.
It could be just a giant ploy to buy Twitter (TWTR) shares on the open market by Musk as it traded all the way down to $35 per share in July.
Musk could have feigned problematic to drag the price of shares down and scoop them up on the cheap to bring down the cost basis of the sale.
This could be the reason why Musk has offered to conclude a $44 billion acquisition of Twitter in a dramatic turn of events.
The SpaceX Chief had written to Twitter yesterday offering to close the deal at the original price of $54.20 a share.
Musk had been set for a courtroom duel with Twitter with multiple legal commentators warning he had a slim chance of succeeding in his attempt to scrap the deal.
On the surface, it certainly does appear as if Musk has been pacified and content with pushing the deal through.
However, the caveat, funding must be secured for this to go through and since the interest rate environment has turned from bad to atrocious, the other question that must be asked is whether banks can provide the necessary funding at exorbitant rates.
Musk is already thinking 5 steps ahead tweeting that the acquisition could be an “accelerant” to “creating X, the everything app”, adding the process would be accelerated by up to five years without giving further details.
Musk’s initial argument in reneging on his offer to buy the company was that it had miscounted the number of spam or bot accounts on its platform.
An “everything app” could mean something similar to China’s WeChat.
A super app in which you can do everything from paying the gas bill, to ordering pizza, and even finding a new girlfriend.
No doubt if the deal goes through, Twitter and Tesla will be inextricably linked with services of each on both.
Getting down to the nuts and bolts, Twitter is a great technology asset and one that is highly scarce.
It’s the center of conversation for anyone who is of high visibility.
Although I believe the price Musk is paying is way too high and $25 billion seems more appropriate, Musk is a victim of his own brinkmanship.
I also believe that a sharp recession that we could experience in 2023 was the real reason for securing the deal now and not later.
If Tesla’s stock tanks in 2023, it would be cringe-worthy to sell stock at depressed prices to fund a Twitter deal.
Musk saw a clear path to financing this deal and that is the clincher. It also bodes ill for tech stocks in 2023 if Musk thinks he needs to cash in now before they head lower as the Fed raises rates aggressively.
However, something tells me this deal will still get dragged out.
“Bitcoin is probably rat poison squared.” – Said Legendary U.S. Investor Warren Buffett
Global Market Comments
October 5, 2022
Fiat Lux
Featured Trade:
(TESTIMONIAL),
(DINNER WITH DAVID POGUE),
(TSLA)
If I ever have to walk across a minefield, I want you leading the way.
David
Orange County, CA
Mad Hedge Bitcoin Letter
October 4, 2022
Fiat Lux
Featured Trade:
(ANOTHER SLIP-UP)
(FSOC), (MAX), (BTC), (ETH)
It’s coming – rules and more than a mountain of them.
They won’t stop until they get their cut.
Blame the industry for attracting the ire of the all-mighty rule makers.
This means that growth in this growth industry won’t be as gangbusters moving forward if ever.
It’s a net negative for crypto because they rely on that extra supercharger growth to attract the incremental investors and all in one poof, gone, like the wind.
What exactly happened?
The Financial Stability Oversight Council (FSOC), a U.S. regulatory panel comprising top financial regulators recommended that Congress pass legislation addressing risks digital assets pose to the financial system, including bills to bolster oversight of crypto spot markets and stablecoins.
Anything that Congress touches usually turns to higher costs and more red tape.
FSOC’s report follows a slate of others that were released last month in connection with the White House’s executive order. In September, the Biden administration published a series of reports recommending that U.S. government agencies double down on digital asset sector enforcement and identify holes in regulation.
It remains unclear when Congress might pass crypto-related legislation, although several bills have been introduced to address stablecoins and digital commodities regulation.
The FSOC report also suggested Congress pass a bill to provide rulemaking authority to federal financial regulators over the spot market for cryptocurrencies that are not securities, in order to address conflicts of interest and abusive trading practices.
It’s not a joke that regulation is racing to the front and center of the crypto narrative as the biggest risk to the industry.
It’s been quite relentless at this point.
As soon as we think the worst has passed, we are dropped with another trust-toppling scandal that will most likely induce further regulation after the debilitating Congress ruling.
This time it’s mediocre reality TV star and influencer – Kim Kardashian.
She’s the Hollywood socialite that pushed Ethereum Max which is a digital coin that aptly borrowed its name from the second biggest crypto Ethereum.
What have been the results?
Ethereum max is down a stunning 98% prompting investors to sue Kardashian who never disclaimed that her marketing was being paid by the company that owns the token.
Kardashian has filed motions to dismiss the suit, with her lawyers arguing that there’s insufficient evidence their endorsements led to the plaintiffs buying EMAX.
She paid a fine of $1.25 million.
EMAX’s value is based on the greater fools theory because it has no utility whatsoever.
As investors and promoters like Kardashian talked up this coin, more people invest and the price goes up allowing the investors at the beginning to cash out.
Kardashian was paid $250,000 by Ethereum Max for her marketing efforts.
Altcoins like EMAX lack the stability of older types of cryptocurrencies, like bitcoin and ether.
And EMAX has never reached meteoric highs like bitcoin so the greater fools theory in this coin only reaches so high for the previous investors to cash out.
EMAX is vastly riskier because investing in it can quickly turn into pouring money down a black hole with the asset depreciating rapidly.
While it’s unclear how many people invested based off the celebrity endorsements, data found Kardashian’s advertisement reached about one in five US adults and roughly 30% of crypto owners.
This is yet another public relations disaster for the crypto industry.
It’s bad enough the industry has impoverished most of its participants, but now it’s really involving the lowest level of brain activity on the human planet.
One might conclude that this Kardashian fiasco might be the bottom because how lower and pitiful can crypto get?
The one silver lining in the reason for crypto not crashing is because the big holders haven’t sold out yet which bodes well for crypto when capital markets start to loosen up.
That appears to be the last leg crypto is standing on which could be either scary or a sanctuary depending how you look at it.
Lastly, steer away from anything other than Bitcoin if you are going to invest.
