Comments
Transcript
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CTLess crypto please. Not what we signed up for.
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TVI am looking forward to this crypto report (assuming I can get access to it somehow). Hopefully Santiago Velez has some interesting insights but I am wary of the combination of Metcalfe's law in conjunction with "S-curve's" (aka Gompertz function I'm assuming) in building some sort of valuation model. If you try to model the value as a function of active wallets, then you already have to pick between a quadratic (n^2) or n log n version of Metcalfe's law (or something in between), along with estimating the affinity parameter which is probably time-dependent. Then, you have an exponential Gompertz function where you have to estimate 3 more parameters to try and fit the data. I suppose my point is you need to be careful when your model is a combination of quadratic and exponential functions and you have a limited dataset to work with. You can probably find parameters that fit the current data fairly well, but you should also test to see how drastically things change with even small changes in the parameter estimates. Especially when we are talking about non-physical phenomenon. Physics and biological processes can be evaluated using the normal scientific method, trying to apply the same analysis to something as unique as bitcoin prices (which is not constrained by the same forces) could lead you down a rabbit hole pretty quickly. I have worked through this exercise using active wallet counts and bitcoin price and realized that you can build several different models that all have very high explanatory value (from a mathematics viewpoint) but with terminal values that can vary by 2 or 3 orders of magnitude (which is probably expected when using an exponential function). Again, I'm curious to see the outcome but I would encourage everyone to thoroughly understand the maths and assumptions behind any model someone presents that explains the value of bitcoin before you rely on it too much. The trend is one thing, pinning down an exact price is much more complicated. Love the daily videos, keep up the good work.
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ACOverall great, as is usually the case when Raoul is on. However I find myself far apart from Raoul on the COVID narrative. Cases are dropping fast in the US (deaths too, and hospitalizations have clearly peaked and have turned down) and yet he persists with the "spiraling out of control" narrative. It's not. In fact, we were really rangebound in cases over the past few months, when the case count *should* have gone vertical. Simply extrapolating the exponential curve out several months is analysis far beneath RV. Exponential curves do not continue forever by their nature, and we are seeing clear evidence of that here. Would we not have seen the whole country infected in one wave in the spring, if that was the case?
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grJack, Please don't talk about the Dow in points! We need percentages. This is not CNBC!
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anHi Jack, small correction. Leveraged loan buying has nothing do with investors positioning for increase in rates, floating coupons are largely irrelevant as swap costs are minimal. If anything, lev loans have LIBOR floors at zero so you can pick up optionality for US going negative. Increased lev loan buying has been driven by juice running out from HY at these spread levels, you can get a yield pick up up to 100bp while being senior in cap stack. Makes sense to switch out to less liquid market with Fed backstop.
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JSI am sorry but to say because bond yields are falling or low there is no inflation, that's very strange. I know Raoul thinks bonds signal the actual state of economy compared to stock market but I think it's too naive to think that such a messed up financial system would somehow not mess up bond markets as well. There has been enormous price rises in capital assets and certain services, technology being deflationary only in the least regulated sectors.
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NDYes more info on EM and country and company profiles
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LHhttps://youtube.com/watch?v=Rxdxf-zHfU8&feature=share Important video to watch on Covid and vaccines before it is taken down from YouTube
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APRaoul & Ash, this is one of the best RVDB we have seen, natural flowing and inspiring conversation, dealing with deep thinking, and complements your GMI piece which sent last week.
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opPerfect example of why I will not be renewing my plus membership. Not a bitcoin bear, but Real vision financial network has turned into a crypto forum. Don't think anything else is happening in the world besides bitcoin? Think again. ECB published some very interesting numbers and warned slowing recovery with Germany loosing steam, GME had a massive squeeze yesterday as more than $200,000,000 worth of very high gamma calls bought ON A SINGLE DAY (A hit job that was so professional, makes Leon look like a plush) , Republic of Turkey issued USD Bonds which was shockingly oversubscribed with 3.5% yield.
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CBActions for alpha? Really? I'm up over 5000 % on mara, riot and hive since March and these miners are traded on stock exchange easily bought on any broker. Buy BTC for alpha? Why? Miners have blown btc performance to smithereens in 2020 just as gold miners do with gold. You want asymmetric, miners all day long.
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RMConverting to lifestyle chips. That is the key to valuation. Let's say you pay $10,000 for a bitcoin and it goes to $40,000. The buyer at $40,000 using US dollars is assuming his dollars are worth $.25 vs the guy that paid $10,000. Same for the person who pays $80,000 for a bitcoin. They are converting US dollars (which they will eventually need back for lifestyle chips) under the assumption that their dollars devalued to real goods/bitcoin by 50% when they make that bitcoin purchase from the person that paid $40,000. If you paid $10,000 for bitcoin and a buyer pays you $100,000, that devaluation for the second buyer is equivalent to the dollar valuation to real goods over the last 60 years. That is why bitcoin is in a bubble, it takes decades for the lifestyle dollar to devalue by 50%, yet in the last six months, buyers have been willing to accept that devaluation in under a one year time frame. So it is just traders to other traders solely on emotional judgements with no tie to the actual or projected future devaluation of the currency used in the purchase (unless you live in South America).
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TCBecause you're typically wrong on macro - that's why you think nothing is going on. There is always something going on. You're obsessed with crypto due to lack of understanding.
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MSI find it strange Raoul that your approach to the alt coins wasn’t to go to people you respect in the space and ask them what they think is good. That’s what I did.
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TZRaoul made an interesting point about government cheques going straight into savings rather than being spent. If you then build up massive savings, that is followed by any hint of inflation when things re-open, isn't that a recipe for runaway inflation at the click of a finger? People increase their savings rate to the largest it's been since the early 20th Century, and then panic buy anything of value as inflation spikes, causing a run-off effect. Whatever the fed does with interest rates, is probably with a lag and will also affect businesses at record leverage rates. Coming out of this lockdown is going to be the biggest challenge of them all by the looks of things.
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JJI hope at some point there will be two DB; one for the market and one for crypto. This was 90% crypto.
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MCReal Vision monitors There's a poster who feels moved to comment on nearly every video with commentary that borders on Professor Irwin Corey's style and (IMO) lacking solid facts to back his/her posts. Then more banter with those who respond with "this is the Way". It's too much work to debate each and every post. Again IMO, it's misguided and sucking up the bandwidth. I hate to see intelligent discourse limited but perhaps there needs to be a governor on said keyboard. I will now go back to suffering in silence...grin.
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SSRaoul's comments on the difficulty in dealing with something that goes exponential really hit home for me. I've struggled to hold on to TSLA & now BTC doing 2020/21. Everyone was and is calling me an idiot for holding, I've lost a lot trying to delta hedge, and now I've capitulated and will not sell or hedge until I have enough for a Gulfstream jet :)
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JLThe insistence that Covid is going to create a series of significant market reversals (bonds up, dollar up, stocks down etc) is starting to become mystifying. Or Hussmanesque perhaps. Taking the data at face value, it's certainly plausible Covid could wind up killing more Americans than the U.S. Civil War (i.e. more than 620,000). But where is the evidence that the market cares about that? Covid has been worse than anticipated for some time now. We have already seen severe distress all across the country. And "Covid Winter" has been a thing for, what, two months now at least? And yet, on Jan. 20th, stocks had their most bullish inauguration day in 36 years (since Reagan's second term swearing-in in 1985) as the major indices hit all-time highs. It's really straightforward: — The lower half of the economy is greatly impacted by Covid. — The top third of the economy is not. The December jobs report actually illustrated the split quite nicely. Within the report, there was something like 550K jobs lost between service workers and state and local government workers. But on the top side, there were hundreds of thousands of new IT jobs ADDED, and the tech sector added jobs overall, and a global survey of corporations said 90% of them were looking to fill technology positions or add new technology positions over the course of 2021 (to cope with the transition to a world of stepped-up digital collaboration and WFH). Another recent study said that top-quartile Americans ($60K and above) are already seeing higher income levels than they did in January 2020 (before the pandemic began). And at the same time, U.S. household net worth recently hit all-time highs. Point being: Yes Covid is horrible. And yes the lower half of the economy is experiencing economic devastation, almost Great Depression level conditions. One out of five Americans is going hungry right now. But the market doesn't care about that. I would argue it's the same story that has already been in effect: — lower half of the economy is getting hurt; market doesn't care — top half of the economy is digital and WFH, they are doing fine — equities are responding to the top 30% of the economy — equities are responding to liquidity infusions w more to come — dollar is responding to U.S. fiscal and global rebalancing In addition to that, the more that the lower half of the economy suffers, the more pressure that Republicans will face to go along with the Biden administration's $1.9TR stimulus push. And there is a multi-trillion infrastructure package coming after that. And private equity is sitting on something like $1.6 trillion in dry powder. And BofA and Goldman estimate another $300-$400 billion of SPAC deals could be on deck in 2021. What does Covid change about this picture, even if deaths start to rise? And why would the dollar suddenly get strong if U.S. fiscal is blowing the doors out compared to Japan and Europe, with China happy to use their strong currency to stock up on base metals and grains? Also, the charts have been saying "markets don't care about Covid" for months now. The dollar chart is, still, historically bearish, having broken a ten-year trendline. And the liquidity factor favoring risk assets could potentially get stronger, not weaker, in the near term. I maintain that the market doesn't care about Covid, the top third of the economy is fine and continues to drive earnings and stock purchases, and the pain of the lower half of the economy (which is real, and severe) simply translates through to a policy reaction function of greater liquidity and bigger fiscal, a dynamic which the market understands. Even if Covid kills 625,000 Americans (i.e. more than the Civil War), it doesn't change that picture. And the picture has been the same for months now — as evidenced by charts and market behavior — and you guys keep fighting it with the same arguments…
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JSRaoul every Friday makes fridays even better! Thank you Sir.
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JSSo isn't it a bit of a contrarian indicator that Raol's clients are asking him more about crypto than macro? I continue to hold some crypto in my portfolio, but feel sentiment is pretty hot after the shot up from December to January. High volatility baby.
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MNI have not seen Ash Bennington look more amazing! Is it AI filters? Lighting? He finally got enough sleep?
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OPToo much crypto - it’s the first FRiday review with Raoul that I actually turned off part way. Raoul....I get that you are going through an interesting journey in Crypto as I am travelling through a similar vortex, but I want a broader perspective at least with the end of week review than just what you provided.
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ABIMO Michael Saylor and Raol Pal are a godsend for the Crypto World. ATM it is so important to explain and educate the rest of the world to the opportunities of the Crypto market (and of course the current dangers in the traditionel finance market) . IMO that's the key for further developement of Crypto assets.
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CJYou just need to buy ONE Altcoin and that is RESERVE RIGHTS $RSR. Read yourself into it. Absolutely stunning prospects.
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DSI still haven't found or heard any rational explanation how a blockchained line of code is an asset class. Can it "tulip" go up due to scarcity, sure, but come on man. You peeps are toking the good modern weed. Our Fed could cook this thing in 5 mins with new rules.
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MSDear Raoul, valuing crypto currencies or anything that resembles money by its network effect or like other social media, is neither crazy nor revolutionary: the Austrian School of Economics, already with Carl Menger proposed it, more than a hundred years ago. On youtube (but in Spanish) you have filmed class lessons by the great Huerta de Soto, on money, that are very contemporaneous to the crypto currency conversation. Cheers,
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FBHow is this a daily briefing? This should be a public service announcement for anyone investing or looking to invest in crypto.
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RTLook into VET - VeChain and Bittorrent please.
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UJTrustswap with the swap token I think is worth a look into. Great as always
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AWWelcome to the altcoin world, Raoul, yes, at the end of day it is about making money. However as an engineer I find extraordinary exciting to learn about new technology and applications that could potentially change the world.
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WTWhy does the world need so many coins again??? Somebody help me. Solutions looking for problems. Starting to look like the beverage business, new one coming out weekly.... Coke, Pepsi, pick one.
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TRIn this episode the Parable of Ten Virgins
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ATThis conversation doesn’t sound at all like a genuine conversation... How long have you been rehearsing, who do you want to scare and why??
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CHRaoul, you might consider asking Ash a question or two ,to mix it up. And let him finish,.,.I wanted to hear his Oracle opinion but alas.
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RCThere are a legion of super interesting things going on in the market right now! Yet..let’s just endlessly discuss Bitcoin.
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DDHonestly, just click on every video featuring Raoul Pal.
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CWOn EM, I haven't seen anything about how many of these countries aren't going to have significant vaccine numbers until 2022/23. Brazil, for example, is a disaster. How is this going to impact recovery, growth, and markets?
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JNThe only alternative coin worth investing is monero. Everything else is fluff
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JLI don't think macro is dead. It just tells you to do something else. If the bond trade is over it is fixed at 0, and then it tells you to invest in equities or gold or EM, monitoring the macro signals until the debt is inflated away and the interest rates start to rise. That might be 10 years or more of monitoring, but still plenty to do.
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JKGod do I love the Friday Daily briefing. Raoul seems happy and it really puts off a good vibe to the friday video. Just wanted to say your crypto call might be the best of the decade if the bullrun goes anything close to how the s2f model predicts. I've been in crypto since 2017/16 but I was very tribalistic and narrow-minded. Your analogy about VC investing helped me out with divining in dipper into the altcoin space. As a college student with very little capital, I have no problem picking out 10-15 good projects with a solid team and tech and yoloing my money on them. If all my picks fail I still have my bitcoin stack which will hold me over. Mark my words by this time next year you might have created more millionaires than an Uncle Sam Stimulus package :)
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JSImmediately Power-shared this one, as all the amateur investors I know have never heard: "A pull-back is your friend ... until it's not!" Some may call it silly but keeping perspective of your trading thesis, time horizon, and position size is a great continuing lesson from the professionals at Real Vision.
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LHRe: top 10 altcoin. Take a look at EWT. It's a token which runs on the energy web. I'm an energy engineer and work with regulated utilities to implement demand side management programs. The energy web is going to revolutionize how utilities operate the grid and by incentivizing consumers to use electrical consuming devices when it makes the
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LSWhat do you think of trading alt/btc pairs Raoul and Ash?
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RKI miss Ash’s file cabinet.
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EKAsh, Roaul, you guys are amazing. Thanks for your huge contribution to the community!
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HvWell done Raoul on sparking a Barra White Paper!! Your constant enthusiasm and years of experience will result in a game-changer for the regular citizen. We thank you!!!!!
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HvSo how about putting the new screen behind the filing cabinet? The beige beast deserve its limelight since its being with us from the beginning.
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bfwhat if bitcoin got to 5 million / btc?. would btc then become the unit of account?. so that would mean a barrel of oil would be 0.01 satoshis. thanks it was a great interview. i was interested in how Raoul maintains a positive vision of a macro trade and he gave some insight into that .
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PDRe: Bitcoin sell-offs (I think he bought a condo) see BTC OG Marti Malmi: Martti Malmi @marttimalmi Dec 18, 2020 I'd be a *billionaire* now if I hadn't sold the 55,000 bitcoins I mined on my laptop in 2009-2010 way too early (mostly before 2012). That is regretful, but then again, with the early bitcoiners we set in motion something greater than personal gain.
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PDGotta say ... Roaul has major cojones on this BTC call. Been watching markets for 40 years and have never seen anyone stick his neck out like that. That said, well argued. Bought a pile... and so far, so good.
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BCWhere are the filing cabinets? I feel cheated.
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DSI am glad major businesses are withholding political contributions until they see how Congress is going to proceed. The first stimulus packaged worked to fill in the GDP gap. The lack of political contributions will force reasonable compromises. Congress can and should move forward on all fronts. The low income stimulus now and a staged increase in minimum wage can be negotiated - an example. The stimulus will help the lowered income workers and the Mom and Pop stores now. If the Republicans want to try Former President Trump to eliminate his future run and splitting the party they can. Take a position; now or never. I have great faith that politicians can reasonably compromise if there is a personal monetary reason. Confirm the Cabinet. The US like the rest of the world needs action. We are going to swim together or drown together. DLS
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BSRaoul, thanks for doing these. Ash, a pro as always. Thanks!!
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BSlooking forward to the alt coin education coming our way I'm very curious about reserve.org there RSV token is a stable coin but they have an RSR token that looks like it really could be something but I am basic clueless about the space but with big investors like coinbase and founding members from paypal makes me want to learn more I'm oddly more excited about the EM trade that could be coming why I don't know but I can't wait for the EM education that awaits us thanks for the great Friday show
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JSOne thing - when Raoul said here we are laughing what happens around the world - we are in a pandemic please people are dying I think we should be more respectful with human life. I also find interesting and challenging this event in 100 year but we are all worried as well. In any event, the video is splendid.
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MHThey’re back again