SPLITTING ATOMS: Stock Market RATTLED!
This is the stuff of legends. The stock markets are down big, while Bitcoin is as firm and stable as a rock.
If this month has proven something, it is that having 5% of your wealth in Bitcoin shelters you from panics in the U.S. stock market.
This is a tremendous feat, since up until now, investors have always favored cash or bonds, but now they can “park” their purchasing power where they know that no government will be able to manipulate with its quantity or its price.
In fact, if there’s one thing to say about Bitcoin’s recent trading pattern, it’s that it is BORING.
Courtesy: U.S. Global Investors
Let’s call a spade a spade – the animal spirits have left this sector.
I remember last year, at this time, it was Bitcoin frenzy, a time, in which cab drivers were telling me that they were opening trading accounts.
We’re definitely not there anymore. This has become the terrain of institutional investors, with serious players entering the industry.
I want to show you what’s happening behind the scenes because often, the price doesn’t reflect the bustling activity that is occurring by developers and financial companies.
In the next few months, the adoption level is set to soar, which will fuel innovation as well.
Take a look at how the Internet progressed over the years:
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This is similar to cell phones, which started as these massive, brick-like Motorola products, which dominated the markets. No one uses Motorola anymore, which is a sign of the rapid disruption of entrepreneurship.
Pure Blockchain Wealth knows the significance of patience. In 2018, we’ve been very reluctant to issue new alerts on any cryptocurrency projects.
Famous for his many witty quotes, Warren Buffett said of 2008: “We should have just gone to the movies.”
In other words, when opportunities are not there, don’t “engineer” them.
Do what the greatest money allocator of all times does at such times – NOTHING.
Now, ask yourself, have other buyers and sellers, tens of millions of them, handed you any opportunities this month?
If they have, by throwing the baby out with the bathwater, then pull the trigger.
There are several deep-value trades that I’m being aggressive with right now.
In 1987, 31 years ago, the market, was in the mood for handing gifts out, as it seems to be today.
Let me show you:
Coca-Cola shares fell by some 21% in one month. It was scary for many around the world, but Warren Buffett wasn’t playing around or wasting time whatsoever.
Instead of succumbing to his pre-conditioned fears, he was buying hand over fist.
It got so aggressive and obvious that management called him to see if he was the mysterious buyer. At one point, KO made up some 60% of his portfolio.
31 years later, shares purchased for $2.48 are worth over $45, but the main profit engine is the dividend distribution each and every quarter, which Berkshire Hathaway now continuously receives for owning KO shares.
Coca-Cola now pays $1.56 per share on an annual basis. Compared with Buffett’s original price of $2.50 (split-adjusted), KO now returns over 60% ($1.56 / $2.50 = 62.4%) a YEAR to patient Warren.
This is the power of compounding and holding, through decades, to companies that grow and pay ever-growing dividends to investors.
This week, we will devote the Wednesday letter to going over the power of compounding and how to do this effectively because it is so critical.
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This work is based on SEC filings, current events, interviews, corporate press releases and what we’ve learned as financial journalists. It may contain errors and you shouldn’t make any investment decision based solely on what you read here. It’s your money and your responsibility. The information herein is not intended to be personal legal or investment advice and may not be appropriate or applicable for all readers. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought.