My investment market viewpoint, beginning of 2021
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- čas přidán 26. 01. 2021
- Sometimes the most important realization you can make is calling out the things you don't know or you cannot predict. Recognizing when your data and signals are bad leads to being cautious and not being too aggressive betting on things you don't understand. My entire point of this video... is to advise caution. Many things are NOT what they seem based on traditional metrics.
YES... Inflation is coming and it's a real thing. All the central bank and government interventions has massively inflated the money supply. Yes... the US Dollar is very likely to eventually collapse via massive inflation. But there's a long road between here and there... Asset prices can easily swing up or down in many different asset classes on the way from here to a broken US Dollar.
So... as for me.... I'm staying liquid. If I invest in something it's short term while I have some signals that tell me it's direction over the next few weeks. And my investments will remain a small portion of my portfolio for some time. If a black swan event happens (which could happen ANY TIME right now) I don't want to have been too long in any investment.
On the complete opposite side... I do remain confident in my Magic the Gathering collection value. I don't know if the crazy spike of the last 6 months will keep going... but even if it does stop and contract a bit I definitely think the contraction will not be very deep. But again... my MTG investment is mostly holding cards I play with. I have no plans to dump my cards anyways if I forsee a drop coming because I didn't buy them for an investment (for the most part). That's kinda the point though... many people are in that boat and it's the very reason for strength against a market price retracement in original print old MTG cards.
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I have a Ph.D. in Economics from Harvard, and you've nailed it.
I got a lot of value from this video! I appreciate you talking about the overall economy, it gives me a better understanding and it makes sense here too because it’s hard to talk about the future of MTG cards without understanding the bigger picture. Thanks!
WoW, I learned a lot from this video and I will definitely watch it again.
Great video, hedonics are just another way to paint the 'perfect' picture while holding down payouts on ssi/endowments.
Different areas of inflation hit different people as well. Healthcare costs & college costs were two insane areas of inflation which vastly outpaced other areas the past decade. Both of those are large ticket items, too where people can gather 5 or 6 figures of debt quickly. Anyone who faced costs in those areas was hit much harder by inflation than people who didn’t.
Truth!
good shit dude, cheers.
Thumbs up 👍 Great overall market views. Thank you for sharing. Can you elaborate on why you are bearish on Bitcoin in the long term?
The inverted yield curve reasoning is flipped! When the curve inverts investors are buying longer term debt (flight to safety) over shorter term debt (fear of short term economic downturn).
you can sell 10$ puts expiring 11/19/21 of GME for more than 3$. that is 30% return on 1000 if they expire worthless. if you are assigned you get shares at half the cost of Ryan Cohen's shares. he and the 2 other chewy board members that just joined GME board turned 150m into 5b selling pet food online.
one useful way to understand potential impact of negative interest rates is to look how options markets. selling a put they pay you interest up front. inflation hedges future stock price decline. selling covered calls is similar but you must view inflation as a risk versus protection.
any valuation metric is only as good as its parts. P/E is easy to manipulate and companies have been buying back shares to hide no real earnings growth (for example).
the price of magic cards in EU to US show how much demand there is for dollars outside of the US. this is because most energy costs are denominated internationally in dollars. as RU completes its pipelines into eastern europe demand for dollars will decline. a crash in US asset prices would follow decoupling of oil and dollar but the new owners of those (cheaper) assets are more likely to be american and across class spectrum.
@@tragicslip I don't think that Magic Card prices, which are currently much higher in the US, are going up because people from other countries are buying them from there. Europe also currently has a punitive tariff on playing cards of an additional 10%. Why should a European buy in the USA if there 1. the prices are already higher than in Europe and then 2. still further 12,7% tariff and about 20% import sales tax come in addition. that increases the maps additionally around 1/3. the high prices are driven alone in the USA ever further up. It passes at the moment no day on not another Reserved List Card in the USA spikes, while the euro market pulls at most after.
@@stefosonager1214 my point is that a mana crypt is cheaper if you buy it in euros than if you buy it in dollars after currency conversion. it means there is demand for dollars and doesn't speak to demand for mtg. use eu card market site and tcg or more reliable known US sales (i think tcg ask is better than ebay sold fwiw)
@@stefosonager1214 in other words my dollar goes further outside the US than in the US
@@tragicslip The U.S. and the euro are two different markets, and I believe that there is more demand than supply in the U.S. right now, which is why prices are rising faster there than they are in Europe. This has less to do with oil than with a lot of money that wants to go to safe havens. The sums of money invested in MTG in the USA and Europe are (still) very unequal. In Europe, the hype and boom on MTG cards is not yet as pronounced as in the USA.
MTG finance videos FTW
Yeah this was more finance with some MTG finance I suppose but I'm glad it was appreciated :)
Interesting how u and me have the same thoughts
Wish I knew what the hell to do with my magic collection. As a commander player my gut says sell anything not in a deck or in the reserve list. I don't have a lot of confidence in newer cards appreciating long term.
as long as mtg is being played prices will increase to beat CDs, even for new stuff.
@@tragicslip thanks for the advice.
@@mattstrott753 np. you are very unlikely to lose money in the long run holding the cards. you can be selective when you buy versus worrying about when to sell. GL, magic is an amazing game.
Yeah I think it's pretty clear now that the best value holding is the oldest original print cards. Especially the ones that see heavy play in Old School format.
Nice Edwin! When did you add those Transformers to your collectibles position? :)
Those are more about re-capturing my childhood then investment, but yeah I recently got them :)
@@EdwintheMagicEngineer Did you ever have the original Megatron?
@@michaelc6817 As a kid I sure did! I always felt like although it was cool it didn't make sense. He has a huge robot that turns into a tiny pistol?
Not many revised dual lands around now.
I agree with your comments on Bitcoin. I'll have to go find your bitcoin video you referred to.
Here's one of them.
czcams.com/video/4XKa_y-84pQ/video.html
What a great and informative video, thank you so much man. I will definitely sub and check out your new channel with Open Boosters.
Great video, Edwin. How do you feel about gold performance in the near term (1-2 years)?
I'm quite bullish on precious metals long term. I think everybody should hold 5% of their net worth in physical bullion. But I really don't know when the government and banker manipulation of precious metals prices will finally end.
I know HOW it will end though... when people finally wake up and realize that buying physical bullion is how you break the paper-based manipulation.
@@EdwintheMagicEngineer onceWSB sees how short these institutions are silver look out lol
@@tragicslip THAT is something WSB should be talking about. The banks manipulate metals by taking huge short positions in the SLV and GLD ETF's
I wonder how many “investors” are buying up reserve list cards. Look at the price of revised dual lands, roughly 500 a NM card. If it weren’t for owing my cards since 95, I can’t imagine justifying buying play sets of these without at least a mid to high 6 figure salary, and we all know how few those people are. And out of that subset, how many would be magic players that play vintage formats? And these aren’t even the top end reserve list cards. I’d be interested in hear your thoughts on who the buyers are.
The buyers are the ones getting the massive government income boost from Covid,but like the housing market in the past which crashed you will see the same thing in the cardboard collectable market in the future. Revised is still worthless to me the same way it was to me back in 2005. People are hearing voices but the eyes don't lie. Only the guys like Rudy who buy them 40 cents on the dollar will hold them until the end or those who use dollar bills as toilet tissue. A Mike Trout rookie card should not be 3 million dollars, the guy sucks.
Right now you have the perfect storm of Timmy's with disposable income buying reserved list cards and the sharks who are buying up all the sealed product. The trajectory and sustainable going forward is 0.5%.
People who can't afford the cards always assume it's only investors buying. People who actively play Old School see hundreds of people all around them buying cards to play with.
Nobody can give you an exact figure. But I can tell you the people buying the beat up to LP+ cards are a vast majority players.
People buying the very high end Mint and graded cards are majority collectors and investors. (Not the same thing... investors sell on price drops. Collectors don't)
@@EdwintheMagicEngineer Then you have guys like Rudy that have gotten so high from sniffing the cardboard that they never want to give it up unless he is secretly dumping product to other big investors or on multiple ebay accounts. I've noticed one seller called "TimmysTacoStand" selling a ton of Homelands and Ice Age
@@EdwintheMagicEngineer You should get other channels on for interviews to discuss the topic on your UnhingedMagi channel. I'd like to see Rudy, Daniel Chang, The Professor all talking about Revised Duel Lands and why 8th edition booster boxes are 2 grand.
Am I the first one here today? :D
You might have been!
That's crazy lol. I feel exactly the opposite of you in regards to cryptos. Not necessarily Bitcoin specific tho.
Im pretty bearish on the short therm but very bullish in the long term. I feel the concept is here to stay and is basically a way to do cash digital transactions in the sense that they are on the 'black market'.
The short term is very, very volatile and I'm not willing to park a lot of money in it. But in my mind, it's clearly going to the moon in the long term. That's just the way I feel about it.
As far as inflation and stocks go, I'm actually very much in the stock market, almost all of my net worth. I'm in the process of putting less savings in it to build some cash funds and also leverage ready in the event of a massive correction or crash.
When that happens, I will most likely try to salvage the pieces that are still up and buy property, then try to dump what is left back in the market during the 'dip'.
I don't believe in doing what you do (day trading to keep a good cash basis growing). I only do that on big intraday market swing, say a stock rises 6% randomly, sure I'll sell a little, but this is mostly because of the tax code in Canada.
Thanks for your insights !
One of the major reasons I'm long term bearish on crypto is because the creation of money and control of interest rates is power. Those in control of the current dominant system lose power and control if they allow a free market money to win. I don't think they will allow that to happen and they control the police, army, banks etc.
The other major reason I'm bearish on Bitcoin specifically... is look closer at the bitcoin block chain and think about what it means... what will happen as it keeps growing like a cancer. 337GB as I write this and you are not really trading Bitcoin without a LOCAL copy of it.
still got all your money waiting on the sidelines waiting on a big crash? or did you eventually put some money in the market from 1.5-2 years ago etc. LMT looks fairly undervalued right now. :)
I have been in and out several times i the last two years.
But these days I never put it all in the market.. it's been an ever worsening bubble since 2014. Don't make the mistake of thinking this market is rational and makes sense.
I have still made a bunch of money in the market. But it has all been ninja-like options trades... get in with a small chunk, double down a few times if wrong... and get out.
I'm not missing gains... but I'm also aware that this has been a debt-fueled growing super bubble for 7 years now.
@@EdwintheMagicEngineer to push back somewhat on that, there have been rational reasons too that more $ would go to the stock market in recent years. Robinhood helped start $0 transaction fees. We get lower fees on mutual funds every year & no minimum investments, fractional stock shares, etc which are also helping people put $ in. 401k’s, IRAs, the tax advantages of capital gains in brokerage accounts compared to other places (28% capital gains for collectibles according to the IRS website for example, MUCH higher than stocks) all help ensure $ continuously goes into the stock market regardless of price. People don’t stop contributing to their 401k’s if the stock market seems like it’s in a bubble. They buy anyway. People will stop buying collectibles if prices seem unsustainable & in a clear bubble. I don’t see a constant, consistent stream of $ going into collectibles the same way as the stock market. Every time someone puts $ into a collectible, it has to be a conscious choice & weighing pros/cons. That’s not true of the stock market. Getting an employer match for instance means a quick 100% gain on your contribution. If the market goes down 30%, you still made 70% on the $ you put into your 401k considering the employer match.
@@DrJack144 great points about more people be in the market now jack. I agree with this especially with younger demographics being more involved invested. This whole wallstbets thing is more of a get the sheep to follow the shepherd type thing. Thats the type of investing I do not like. I love dividends, I love fundamentals, I love great businesses, and yes now and then I will get something a little more speculative but not more than 5% of my portfolio. Not touching AMC, BB, GME, NOKIA with a 10 foot pole. Bad businesses either in general, or just bad business due to the new world post virus.
@@EdwintheMagicEngineer I agree somewhat with the debt fueled bubble but not wholly. I thought that TSLA was going to be bad going into the SPY index and so far that hasnt happened but they just had not the best news today. Will be interesting to see what the markets due tomorrow because of that, but also AAPL should carry it up. Plus all the other earnings the next two days. Now they are saying indictments might happen on these suspicious trading on GME, NOKIA, BB, and AMC among others. Most brokerages wont let you trade them now either. What do you think about LMT being undervalued? Disclosure: (I am long AAPL and LMT)
@@GamerTreasures well-said, I like your approach
What is your opinion on potentials of CE and ICE cards?