Avi Salzman had a full-page article in this weekend’s (May 21, 2018) Barron’s, “Despite Recent Price Drop, Bitcoin Gets Vote Of Confidence.” “Bitcoin has plunged 58 percent from its December highs, Warren Buffet has compared it to rat poison, and few people use it for everyday purposes. Other digital coins are stuck in legal limbo. In any other industry, this would be a death knell,” Mr. Salzman wrote. “And yet, at CoinDesk’s annual conference in Manhattan [last week], the premier event for bitcoin and blockchain enthusiasts, roared with optimism and money,” Mr. Salzman added. “Some of that roar came from the rented Lamborghini’s out front; and, the optimism may have been stocked by the blockchain powered, free-beer dispensing machines.” Mr. Salzman adds some more color to the gathering and I refer you to this weekend’s Barron’s for the full article. He does note that despite the price drop noted above, “suits follow the money,” and — “even after the price drop, the [digital] coin world has nearly $400 billion in assets, 20 times more than [it was] at the start of 2017.”
FedEx CEO Fred Smith, who spoke during the conference, “explained how blockchain technology could change [the] shipping [industry/sector].” Also in attendance was, Michael Sonneshein, Managing Director at Grayscale Investments, which offers tradable digital coin products like the Bitcoin Investment Trust (Ticker: GBTC) — one of the few ways for non-accredited investors to trade bitcoin without handling the actual cryptocurrency,” Mr. Salzman wrote. “Grayscale, which hopes to be the Wisdom Tree of digital assets one day, has attracted $186 million worth of new investments this year,” Mr. Sonneshein told conference attendees.
“Investment has only risen, as the price has dropped.” Mr. Salzman wrote. “Companies facilitating digital currency trading and investing like Coinbase and Circle, are now worth well over $1 billion – Circle’s valuation leaped near $3 billion on an investment announced at the conference. Many billions of dollars more are being invested in blockchain technology, the innovative software that tracks bitcoin; and that can also track and secure almost any other kind of contract or transaction.”
“There was much buzz about one company — not even at the conference,” Mr. Salzman wrote. “Goldman Sachs (GS) is reportedly preparing to start a trading desk that will buy and sell contracts tied to the price of bitcoin.”
Erik Voorhees, a major and early bitcoin investor, thinks “it’s inevitable” that cryprocurrencies will replace fiat currencies; and, he doesn’t expect that financial companies will corrupt or sidetrack the effort,” Mr. Salzman wrote. “That’s the point,” he told Mr. Salzman, “it’s pulling them in.”
“Not everything seemed rosy,” at last week’s digital currency conference, as concern over coming digital coin regulation and a bigger SEC crackdown permeated the atmospherics.
Notwithstanding these regulatory concerns, Ran Neu-Ner, ONchain Capital Founder and host of CNBC Africa “Crypto-Trader,” and an early investor in bitcoin, remains a digital currency and blockchain bull. During an interview on CNBC’s Fast Money last week, Mr. Neu-Ner, who is considered one of the top Wall Street soothsayers on the sector, told the panel that “the U.S. is falling behind,” the rest of the world when it comes to embracing digital currency and its potential to disrupt the financial world. Mr. Neu-Ner recommends that investors in crypocurrency “hold bitcoin and etherium,” but, he isn’t overly enthused about either. “I like bitcoin, but it’s priced too low,” he told CNBC. “It’s going to continue to go up slowly; but, in a stable way. But, there are more exciting cryptocurrencies out there.”
Bitcoin Cash
As noted above, Mr. Neu-Ner sees a lot of potential for bitcoin; but, senses that its rise is likely to be more muted than its past history has shown.
Ethereum
“Hold this coin for sure,” Mr. Neu-Ner said. He added that “ethereum has many potential uses, and one of the biggest communities in the industry with thousands of people — the smartest people in the room.”
Other Digital Currency
Some of the other digital coins getting Mr. Neu-Ner’s attention include: Oasis, Zilliqa, and Thunder Token.
Ripple
“Definitely sell Ripple,” Mr. Neu-Ner told his CNBC audience. “I’m throwing it in the garbage.” He said that the company which makes Ripple is one of the best in the industry; but, their “token, XRP is not.” “I can’t find a use for the token;” and added that “XRP is a centralized token, which defeats the point of blockchain technology. I’m out.”
How To Play China Now?
Reshma Kapadia has a lengthy article in this weekend’s Barron’s with the title above. Mr. Kapadia interviewed Andrew Mattock, Lead Manager, Matthews China Fund. Mr. Mattock has been investing in China “nearly 20 years ago,” Mr. Kapadia tells us, and he is “the Lead Manager of the $1.1B Matthews China [Fund], (Ticker: MCHFX). In the past three years he has led the fund, it has averaged more than an 11 percent annual return a year over that period, to beat 85 percent of its China peers,” according to Morningstar. “It did even better over the past year, returning 45 percent, as China stocks rebounded — and beat 94 percent of his peers.”
“China demands you be open to new ideas,” Mr. Matock said. “A buy-and-hold [investment] strategy wouldn’t have worked over the past fifteen years. You have to be nimble. Excess profits are competed away. Then you end up with a bloodbath, and a new industry emerges to trump the last hot one.”
“Ping An, an insurance group, (2318: Hong Kong), and appliance maker, Midea Group (000333: China) are two [of Mr. Mattock’s] holdings that have survived consolidation and still have strong growth ahead,” Mr. Mattock told Barron’s. “Ping An, for example, has been quick to keep up changes in its business, leading the shift online and cross-selling its financial services.”
“Internet companies like Baidu (BIDU), Alibaba Holding Group (BABA), and Tencent Holdings (700: Hong Kong) have benefited from gigatic, first-mover advantage,” Mr. Kapadia wrote. Alibaba is the firm’s top position, at more than 10 percent of its assets. Tencent is at its the lowest-weighting since 2015 – 6.3 percent – in part, because there are cheaper options.”
Mr. Mattock “likes other ways to invest in digital trends, including information-technology company, Chinasoft International (354: Hong Kong), and Baozun (BZUN), which helps companies with e-commerce marketing and fulfillment.”
Other Matthews China fund holdings include: Agriculture Bank of China (1288: Hong Kong); Industrial & Commercial Bank of China (1398: Hong Kong); China Construction Bank (939: Hong Kong); China Life Insurance (2628: Hong Kong); Sino Biopharmaceutical (1177: Hong Kong); and, Chinese National Building Material (3323: Hong Kong).
I refer you to Barron’s for Mr. Kapadia’s full article.
Last week, in my own portfolio, I added to CRSP, BABA, NBIX, and NKTR, and initiated a position in Canopy Growth (TWMJF), a best-in-class marijuana company based in Canada. All for now. RCP, fortunascorner.com
No comments:
Post a Comment