Before I get into today’s discussion of the Aussie stock market, I want to say happy Bitcoin Pizza Day!
You might not know about Bitcoin Pizza Day, but it’s quite a funny — or sad depending how you look at it — story.
On 17 May 2010 in a bitcoin forum, a user, Laszlo Hanyecz, put out a note that he’d send someone (pay) 10,000 bitcoin for some Papa John’s pizzas. It took a little while to find someone to agree, but he got there in the end on 22 May 2010.
And the transaction was faithfully made.
10,000 BTC for two Papa John’s pizzas.
Back then 10,000 BTC was the equivalent of about two Papa John’s pizzas. Today, if you take that fiat-converted value…not so much.
Laszlo didn’t realise (and to be fair none of us did back then) that just 10 short years later 1 BTC would carry a fiat-converted value of more than AU$14,000.
Laszlo’s order was the equivalent today of AU$140 million. Ouch.
And every year since that transaction, as the fiat-converted value of bitcoin has risen and rises, on 22 May we celebrate Bitcoin Pizza Day.
Now, as a homage to Laszlo and that fateful day 10 years ago, I’m buying a couple of Papa John’s pizzas for lunch today…
…and I’m going to pay with bitcoin.
You want to be on this list
Yep, you can’t do that with gold, stocks, property, or bonds now can you? Of course, people might also ask why I would want to do that? After all, the volatility of bitcoin means tomorrow my pizzas might be 10% cheaper if the ‘price’ of bitcoin goes up.
I know this point of bitcoin as a store of value, unit of exchange, and the wild volatility has always been a bit of a bugbear with my colleague Vern Gowdie.
We’ve never really seen eye to eye on bitcoin and its potential. But that’s more than fine with me. I don’t expect or want everyone to agree with me all the time. How boring life would be then…
But while Vern and I might not agree on bitcoin, I respect his view and I more than respect his knowledge, insight, and smarts when it comes to helping investors manage and protect their wealth in turbulent markets.
That’s why I think it should be mandatory that if you’re reading this now that you jump onto Vern’s priority list to get a sneak peek at his new service The Gowdie Advisory.
You don’t have to agree with all he says, but you might realise that it’s some of the most important advice you’ll get in the current market conditions.
You must be on the priority list to see what The Gowdie Advisory is about — to get on the priority list just register here.
Now, back to my lunch today.
Me buying Papa John’s pizzas at the very moment I want them — not five days later — is a way to show you that the crypto space has come a long way since the days of Laszlo’s order.
It’s only 20 bucks worth of pizza (and bitcoin) anyway. I’ll probably post my ‘Laszlo’s Journey’ on Twitter — if you’re interested you can follow me here @samvolkering.
Maybe one day I will come to regret my decision. Maybe in another 10 years’ time my Papa John’s pizzas and 0.0026 BTC will be worth a couple of million too. In fact, I hope it is. I won’t be crying about my million-dollar pizzas though.
I’ll be celebrating the death of the fiat money system and the abundance of the crypto economy.
While on the subject of things that have gone up in value…
I’ve been painting a fairly bleak picture of the US markets recently. Across my publications where we have US exposure (NASDAQ and NYSE stocks) I’ve been moving out of a few positions.
That’s because all signs point to a pretty hefty fall in US stocks from here. Of course, investors usually find that hard to conceive when the market is topping all-time highs with huge, eye-watering valuations.
In fact, the broader market valuations are now well past what they were before this current crisis. And all this continues to come amidst ongoing spiking unemployment (another 2.4 million new jobless claims in the US this week).
In the last two months, US jobless claims have exceeded the total number of jobless claims made during the Great Depression. But according to the US markets, everything is fine.
Well, it’s not. And that kind of disparity between the economy and the market can’t last.
And it’s somewhat the same on the Aussie market. I saw a headline in The Age this morning that read:
‘CBDs could shed 100,000 workers, take six years to recover; Victoria records one new COVID-19 case’
I mean, the disparity between the economic impact of these lockdowns versus what’s happening in the market is astounding.
Nonetheless, that doesn’t matter too much if you’re a stock picker. It merely means there’s opportunity in abundance. And it’s never been as exciting to be picking stocks in markets that have some pretty wild volatility.
Take for instance some of the stocks that have seen healthy gains since the start of the year:
Holista CollTech Ltd [ASX:HCT] — 8 cents start of January to 15 cents yesterday, high of 27.5 cents mid-February — 87.5% gain to yesterday.
Orbital Corporation Ltd [ASX:OEC] — 35 cents start of January to 78.5 cents yesterday, with a high of 99 cents just a couple of weeks ago — 124% gain to yesterday.
GetSwift Ltd [ASX:GSW] — 47 cents start of January to 74.5 cents yesterday, also a high of 96.5 cents a couple of weeks ago — 58.5% gain to yesterday.
Then there’s a stock like Marley Spoon AG [ASX:MMM]. Talk about being the right kind of business at the right time.
Marley Spoon is one of those home delivery meal kit companies. You know the ones where you get a box of ingredients and recipes to makes ‘fresh’ meals at home because life is just too busy to go to the shops.
Well, when you’re not allowed to go out, when you’re locked down, when you’re told that being anywhere outside the home will kill people…delivery services do pretty well.
And Marley Spoon has seen a surge in their users, sales, and popularity during this crazy period. It sent their stock price into the stratosphere because of this.
Early January you could snaffle up stock in Marley Spoon for just 28 cents. On 13 March they touched a low of just 21 cents. Yesterday their stock was trading at $1.12 with a market cap of $174.4 million. An astonishing 300% gain from the start of the year and 433% from the March lows. At their recent peak of $1.36 — trough to peak saw a difference of 547%.
What a result.
And these stocks are all proof that in all market conditions there are winners. Finding them and being in them at the right time, however, is hard. It’s nearly impossible to jump on every big winner like these when markets are so volatile.
And we know that it’s just as easy to trawl through the small-caps on the ASX and find stocks still languishing from the effects of lockdowns and the coronavirus measures in force. There are plenty of losers out there, but plenty of winners.
And that’s the market whether it’s booming, busting, or just cruising. It’s why we reinforce the point about you developing independent thought from multiple editors that we publish.
Sometimes a view we publish may go against the very fabric of what you currently believe. And you may dismiss it, but you should always listen to it, consider it, and then make your decision on it.
Who knows, maybe when we should be wrong based on all factors out there, we might actually be incredibly right.
Editor, Money Morning
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