Trader View - May 9, 2018

OSL-SJO-09MAY18-HOAX

Rat poison… Harvested baby brains.. dementia… antisocial, stupid and immoral are some of the monikers the seasoned investors Warren Buffet and his sidekick Charlie Munger have given to Bitcoin. These guys built their careers on value investing in brick-and-mortar businesses: map creators, textiles manufacturers, newspapers and the likes. Also well-known for preaching the if you don’t understand it don’t invest it mantra which has worked grandly for the pair, so well in fact that Mr. Buffet is now worth a cool $90bn as the third richest person in the world. But he is also pushing 90 (will be 88 in 3 months time) while Mr. Munger is six years away from becoming a centenarian.

Side tracking a bit to make my point here but I recall interacting with my late grandfather in high school. He’d lecture me on how to do things his way and being Korean, as much as it is blasphemy to speak back to your seniors let alone your grandfather, I did as I was told – not because I was a line toeing obedient grandson, nor out of respect, but the man was in his 70s! I remember thinking if i’d been doing something a particular way for seventy odd years, there is no chance in hell some punk adolescent teenager is going to change it.

Getting back to my point, if you’ve had an investing strategy that has been hitting the ball out the park for decades and out of nowhere comes a technology that not only threatens to take your job (plenty of studies showing AI based funds outperform traditional money managers) but stinks up your portfolio, it’s OK to be a little irate.


source: https://www.cnbc.com/berkshire-hathaway-portfolio/

While their biggest holding AAPL US has decided share buybacks are a better way to reward shareholders than selling phones ($23bn last quarter), six of their top ten holdings are in the financial services industry. Oh and did I mention BRK A US is down 1.5% on the year? they posted $1.1bn losses for 1Q18 vs. $4bn in the black 1Q17 (full release here). So I understand that you are a tad hurt and unlike most people, it may indeed be too late for you to change your ways. But infant brains? there’s no need for that now.

And quite possibly the biggest FUD spread yet, the WSJ article that got everyone expecting a verdict from the SEC / CFTC on the status of ETH as a security – or not turned out to be fake news.

The day Mr Vigna’s article published, $ETH dropped 6.5%, only to bounce 32% in five days punching through a two month high. This naturally was followed by a cacophony of speculation that traditional finance players were behind the bogus report using it to buy low. While this may well have been the case, it appears to have been caused more by people looking back at the favorable statements made by the SEC chairman and “forecasting” a positive outcome. Whatever the reason, $ETH got pumped on 1.4x 30 ADV on a nothing done.

As markets subside, we may just be at the cusp of yet another pump as arguably the biggest event for the industry – albeit Vitalik Buterin, Charlesson, the Omisego team & Cosmos team boycotting it this year – kicks off in New York next week.

2,700 people attended in 2017 and $ETH got pumped 370%.


This year, 6,000+ will be there.


Moon baby, moon…

The most animated feud in the space is arguably the one ongoing between bitcoin maximalists and the $BCH camp. Thousands signed up to join the class action lawsuit against Bitcoin.com saying they were duped in buying $BCH in thinking it was $BTC, but when asked to fork up cash for the lawsuit, apparently just 31 pitched in. As much as I hate to admit it, this is unfortunately a good analogy with most crypto players, all bark and no bite…

But it hasn’t all been jokes and laughs. Another executive director called it quits with Goldman Sachs and joined HOLD; a Maltese crypto startup as CEO. The New Korean FSS chairman Yoo, Sukhyun indeed remained tight lipped on crypto policy on his first day on the job (yesterday), but he has expressed disagreement with the governments’ draconian stance and advocated the nurturing of the technology in the past and is now being seen as a harbinger of a constructive regulatory framework ahead. Dovetailing with complaints from Bithumb that has spoken out against the banks refusing to open new accounts for their applicants, it does seem like the tide is turning in Korea.


source: http://www.aktv.co.kr/news/articleView.html?idxno=54341

Also, just weeks after NASDAQs pledge to launch a crypto exchange before the end of the year, the New York Stock Exchange has come out saying they want one of their own as well

And while a few weeks old, thought too big to be missed. Canada’s biggest pension fund OMERS (US$95bn AUM) vowed to launch a crypto asset fund in January, They have kept their word and debuted Ethereum Capital 20th April on Aequitas Neo; Canada’s new stock exchange. This is the first case I’m aware of a pension fund investing in the space. Typically the most conservative of the traditional money managing folk, a major milestone indeed!

may trend be your friend… happy trading

SJ Oh
Trader
Vice President
[email protected]

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