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Comments of the Day
09 February 2021
Video commentary for February 8th 2021
Eoin Treacy's view
A link to today's video commentary is posted in the Subscriber's Area.
Some of the topics discussed include: investors continue to migrate to Asia, oil firm, commodities continue to rebound, Treasury yields test the psychological 1.2% area, Wall Street firm, gold steady,
Tesla Bets Big on Bitcoin, Plans to Accept Cryptocurrency
This article by Chester Dawson for Bloomberg may be of interest to subscribers. Here is a section:
Tesla Inc. invested $1.5 billion in Bitcoin and signaled its intent to begin accepting the cryptocurrency as
a form of payment, sending prices to a new record after the vote of confidence from the electric-car market leader.
The Palo Alto, California-based manufacturer said in a filing Monday it made the bet on Bitcoin after updating its investment policy last month to allow the company to invest in digital assets as well as gold bullion and gold exchange-traded funds.
“We expect to begin accepting Bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis,” Tesla said in the securities filing.
The leading electric-car maker’s embrace of Bitcoin lends increased legitimacy to electronic currencies, which have become more of a mainstream asset in recent years despite skepticism from some. The embrace of a digital currency fits the maverick image of Tesla Chief Executive Officer Elon Musk, who upended the automotive industry with battery-powered vehicles and disrupted the equities market with the stock’s ascension to the blue-chip S&P 500 index last year.
Eoin Treacy's view
During the bitcoin bull market of 2017, Lamborghini began taking bitcoin as a form of payment. Sales jumped appreciably as young traders cashed in. The lure of a chance to own a marquee vehicle overcame the holdr mentality for a while. Very little was subsequently said about what Volkswagen did with the bitcoin. We can assume they were immediately turned into cash since there was no response from the share price.
Japan's Topix Surges to Highest in 30 Years as SoftBank Gains
This article by Shoko Oda and Komaki Ito for Bloomberg may be of interest to subscribers. Here is a section:
With more than half of the results out in the latest reporting season, more than 68% of companies in the Topix have beaten expectations, according to data compiled by Bloomberg. The Topix forward price-to-earnings ratio is now at 18 times, significantly higher than its five-year average of about 14 times.
Results from the current earnings cycle are pointing toward a major recovery next fiscal year, according to Frank Benzimra, Societe Generale’s head of Asia equity strategy. “Our thesis in Japan is that the market has been quite under-owned for some time, because there was not so much interest on earnings,” Benzimra told Bloomberg Television.
Eoin Treacy's view
Veteran investors will remember about fifteen years ago there was an argument that Japanese equities would always trade at a higher P/E because of idiosyncrasies with the market. That proved incorrect and valuations have contracted considerably. The market is now a lot more attractive for international investors in search of earnings growth.
Email of the day on gold and fighting the Fed
Thursday's article, “Gold Plunges the most in Four Weeks…” is greatly appreciated. Despite all the uncertainties and volatility of the past two months you report that you have retained your gold investments and are looking forward to “increase [your] position”. You express even more confidence in silver.
The attached St Louis Fed Chart showing an accelerating measure of inflation provides good evidence to support your position, long term, but long-term charts, both weekly and monthly show gold is still over-extended.
If “fighting The Fed” is to be avoided, a bullish gold position may be a courageous act when the world’s central banks will be united in their determination to frustrate gold investors. There may have been some evidence of that last year. Also, since silver prices are more easily manipulated, that market seems to be more vulnerable to a combined central bank manoeuvre?
Common sense says that the present world-wide, money creation will end in disaster. In that situation, precious metals are a safe haven but, in the short term, and even the medium term, risks in those markets appear to be very high. A prudent plan to cover both outcomes seems desirable. That plan should, perhaps, also incorporate different allocations to gold and silver. Further guidance by you would be invaluable.
Eoin Treacy's view
Thank you for this email. Fighting the Fed would be holding a gold position in a positive real interest rate environment where one can easily anticipate a positive return from other asset classes. That is not at all what we have at present. We could be looking at a negative real yield for years to come as central banks attempt to loot savings to pay off massive unfunded debts.
Email of the day on chartbooks and highlighting opportunities
I am a new subscriber having followed David Fuller closely and subscribed to his weekly chart book for many years. You may cover this but I would find it really helpful if you could cover markets by region and comment on individual stocks showing attractive chart patterns in those regions...maybe each region/associated stocks to be covered once a month. For example, to my untrained eye Hong Kong is looking interesting. I miss so many opportunities in stocks that I do not follow on a regular basis by not seeing the charts in hard copy. Just a thought. Thanks
And
I have no wish to appear negative however, what exactly have I paid money for. It appears to me that, the majority of the menu items are either redundant (for about year now), or indeed have no content at all. Perhaps I could draw a parallel with another financial services advise provider, and the one that springs immediately to mind is Investors Chronicle. The content and level of professional presentation from them is first class. I am concerned that I have paid money for a product that is simply inadequate. I have no wish to knock the excellent uploads from Eoin, they are useful with regard the macro picture. It is really the absence of detail with everything else.
Eoin Treacy's view
Thank you both for this feedback. The chartbooks were long ago superseded by the Chart Library. We have 13,000 instruments and the first port of call for many investors in the Eoin’s Favourites section. That’s where you will find assets of potential interest broken down into lists. It is then very easy to scroll through charts by clicking on the View All It is true, I have been much more focused, of late, on macro themes because that is by the far the most important consideration at present.
Nevertheless, I accept the charge that this site is not the easiest to navigate. That is why I started doing videos, posting items on repeatable schedules and tagging items. A full list of all tags can be found here. https://www.fullertreacymoney.com/investment-themes/ I also created this brief video to talk about how to find different items of interest in the site.
I will also going forward pick a market at least one day a week and highlight interesting charts within it starting tomorrow.
Eoin's personal portfolio - stop triggered on hedge position
Eoin Treacy's view
One of the most commonly asked questions by subscribers is how to find details of my open traders. In an effort to make it easier I will simply repost the latest summary daily until there is a change.