My Investing Muse

Is the macro so bad?   What is the macro (economics)? According to Investopedia: Macroeconomics is the branch of economics that deals with the structure, performance, behavior, and decision-making of the whole, or aggregate, economy. The two main areas of macroeconomic research are long-term economic growth and shorter-term business cycles. Gross Domestic Product (GDP) For a start, 2 successive quarters of GDP decline in the US is a good start on why the macro is bad.   US GDP (2018 - 2022) Source: https://www.bea.gov/news/2022/gross-domestic-product-second-quarter-2022-advance-estimate According to the US, this alone does not imply recessions.  However, we are expecting earning compressions in the coming earnings reports. With the recent PMI coming out from China, the demand for production is slowing down.  China is one of the big producers and this should imply a drop in global demand too. Inverted Yield Curve An inverted yield curve shows that long-ter...

  I am not sure if crypto can remain a strong hedge against inflation with such volatility.  inflation has reached 7% but the volatility swing is way bigger (with some values halved). this implies that the market is nervy, uncertain how crypto will manage in lieu of the rising interest rates. Those using leverage to invest, they maybe forced to stop loss with rising inflation, interest rates and the high volatility of the swing. with a 50% drop of the value from recent highs, it may not be sustainable to hold on.  this may lead to capital reallocation to more traditional assets like bonds, equities & real estate. millionaires have been made through crypto and there are great losses as well. personally, it is hard to treat this as a hedge from such swings in crypto value. as a hedge, it must at least have some capital preservation. it is definitely speculative not preserving.  in the days to come, there will be crypto millionaires. in...

D uring a recent interview with Yahoo Finance,   Ray Dalio has shared his concerns that Cryptocurrencies may be outlawed .  Governments would want a monopoly on money and they have concerns that Cryptocurrencies may jeopardise their currencies' role - leading to depreciation & dilution of value.  Mr Dalio has also expressed his preference for gold over Bitcoin (BTC) despite their performance.  However, this does not stop Mr Dalio from owning some cryptocurrencies. The volatility of BTC can render its own downfall, as a medium of exchange.  Of course, the people would not mind when BTC appreciated but it could also post equal downside.  For regular citizens, the drop of value from USD$63,000 to USD$28,000 within 3 months (Apr 2021 to Jul 2021) can lead to much chaos.    On its way to being a successful currency, cryptocurrency will be a threat to the legal currencies , thus, leading to a possible ban.  India and China have respectivel...