Kick Back: The biggest stories you might have missed on Stockhead this week
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This week in fake news:
Facebook massively over-reacted to Google paying to host links to Australian news outlets by pulling anything that resembled news off its pages.
And when it comes to Facebook, “anything that resembles news” is a lot.
Stop whining. This is long overdue. Facebook’s attempts to define and share all the news that’s fit to print has almost broken the world. GTFO of this business, ZoidBerg.
Anyway. This week in fake money:
Bitcoin pulled away from the half-ton, hitting the US$50K mark on Tuesday night and has done a fair job of maintaining it since.
This week in fake criminals:
reddit trader Keith Gill actually had to front US Congress for daring to take a quite sensible position on a bricks and mortar retailer a year or two ago.
And this week in fake meat – damn this looks delicious:
Okay, so there is a red flag – Israel’s Redefine “is still working on flavor”, but the technology alone is impressive enough to eat.
“3D printers loaded with plant-based ‘ink’ can print the meat countless times and deliver a complex layering of muscle and fat to recreate the right texture.”
We are living in the simulation. Let’s have a look at what you may have missed this week.
Q: What is a Sophisticated Investor?
A: Someone who gets to make a lot of money.
Q: What doors does being a Sophisticated Investor open?
A: The type that lead to making a lot of money.
Q: How do I become a Sophisticated Investor?
A: By making a lot of money.
Spot the inherent problem? Well done, but don’t get too upset. Get Aspirational – it’s what keeps our economy ticking over, and our lives great.
Unless you’re perfectly content with borscht three times a day, and sharing the Lada with your 35 second, third and fourth cousins. And knowing who your president’s going to be, well before the election and all that violent palaver that comes with – ugh – democracy.
Don’t be silly. Of course you’re not content with that.
In fact, sophisticated investors exist for probably a better reason than you’d expect. And honestly, it’s easier to become one than you think – just land this typo-correcting job with Vic Health and you’re qualified:
Here’s something completely foreign to small caps traders – gambling.
But betting on stuff as an investment strategy is so legit in the US right now that even Cathie Wood – the ETF prodigy uniting Millennials and Boomers in 2021 through their shared love of giant profits – has bought a chunk of DraftKings.
ARK disclosed that its Next Generation Internet ETF currently holds 620,300 shares of DraftKings, worth about US$33.9 million.
Sports betting has been a sneaky winner since the March Covid market lows. DraftKings has soared from around the $US11 mark to sit now at $US58. The US market for it has been climbing with as legalisation grows, state by state.
And here in Australia, BetMakers (ASX:BET) this week enjoyed its rise to more than a 20-bagger, hitting the $1 mark after 8c lows in March.
Its peer PointsBet (ASX:PBH) has seen similar growth from $2 to over $16 in that same timeframe.
We’d like to say “we told you so”, but we didn’t. Well, not directly – but we did tell you that Ron Shamgar did, back in June, 2019, when he called sports betting in the US at the time “a bit of a land grab”.
Meanwhile, shares in the company that owns Canberra Casino just rose by as much as 1,900pc in two days on no news. Nothing to see here.
And in other ARK gambling news, Wood also signed off on sinking another $US110 million or so into the Grayscale Bitcoin Investment Trust, bringing ARK’s holdings of GBTC close to the $US350 million mark.
No doubt that helped the crypto king reached an all-time peak of $US50,129.50 ($64,700) on Tuesday night, at 11.35pm AEDT, on Kraken.
Halfway there, hodlers.
If you’re looking for indicators, even the AFR admitted this week that it’s “becoming very hard to ignore”.
But DigitalX boss Leigh Travers said we’re still a ways off Grayscale adoption levels here in Oz. He’s pushing (hoping, obviously) to see the unlocking of institutional investors and Self-Managed Super Funds (SMSFs).
Anyhoo, we celebrated BTC’s half-tonne in time-honoured digital media style, with some of the ace-est tweets on the big moment. This is our favourite for no particular reason:
January 13, 2018:
February 17, 2021:
The rest are here.
Far East Capital analyst Warwick Grigor is not a believer in the crypto fad.
“It is merely a distraction from the big picture,” he says. “That is a wave that has a limited life span.”
The “big picture” he’s talking about is gold, which down marginally from $US1,827/oz to $1,824/oz in the same timeframe Bitcoin has risen from $US16,000 to $US50,000.
That sounds a lot like we’ve set poor Warwick up there…
But wait. Grigor, unlike so, so many crypto pundits, understands one thing they don’t. Money.
Because whereas BTC can lose when the market goes into reverse, gold is a time-honoured hedge against something a lot of them digital money upstarts have never heard of – inflation.
And inflation is coming. $1.7 trillion stimuluses demand it. But for those who were too young to remember the value of cash going through the floor, here’s an explainer meme so old it has Ben Bernanke in it:
There’s more where that came from, because The Secret Broker remembers inflation and he’s starting to feel the cold chilly wind of change blowing up his kilt. And it’s been a long time since TSB felt change anywhere near his kilt.
Bonds are being sold down. Central banks are too scared to raise rates. Bank stock dividend yields pay more than term deposits with the same bank.
And the final straw? A bottle of stout at TSB’s local is suddenly 14% more than the last time he bought it.
What next? Tomato sauce?
You can bet your bippy it’s tomato sauce, if the CEO of Heinz keeps dropping scary quotes like: “We have inflation, we are seeing inflation, we are concerned about inflation.”
This is a fable about bonds, elephants and The Secret Broker’s beef cheeks.
The thing about inflation is it hasn’t happened yet. So at least until it does, gold looks like becoming a bit of an old football for the foreseeable future.
Here’s a good indication of just how much – even our weekly “Gold Digger” column” is about, er, silver:
In it, you’ll read startling outlooks such as how just for solar panels alone, the world will consume 1 billion ounces of silver from 2020 to 2030.
Current global silver production is just under 1 billion ounces per year. And by then, EVs will be adding another 53 million ounces a year to the demand.
This is the new silver. You might remember it from such hits of yesterday as jewellery. And taking photos of things.
Look! Over there! Booming property prices!
The moral of those stories is nobody GAF about those stories because rock bottom interest rates only mean one thing – buying more houses.
Which also means yet another rocket under house prices. In fact, CBA economist Gareth Aird now expects house prices to rise by eight per cent in 2021 and six per cent in 2022.
RBA governor Philip Lowe don’t GAF. He thinks (people who don’t own a house, look away now</em) rising house prices are perfectly lovely and act to “support household balance sheets and encourage spending through positive wealth effects”.
But Aird has his eye on the end game, which seems to be a rare thing right now. He notes that if Australia faces another economic shock down the line, the rates lever is no longer an option.
That means the onus may shift away from monetary policy and towards fiscal policy.
And that, Aird reckons, means it’s increasingly likely we are “inching towards a new paradigm”. Or, as you might know it better, a good old-fashioned Mexican standoff.
The term “rollercoaster” gets thrown around a bit in trading circles. Generally, they’re not the kind of ride you want to be on because IRL, you don’t get off at the top.
But there were some good hop-on, hop-off opportunities in BNPL world this week. At times, it was almost crypto-like.
Z1P shares put on 24.8 per cent, and are now – finally – up 140ish per cent for 2021, paying back the adamant faithful who missed the APT train.
Stockhead reports seeing someone in a Zip tee at the train station, even.
But really, they could have put their money elsewhere and banked 60 per cent and 73 per cent respectively on IOUPay and Fatfish just this week. Within days of each other, they announced new – or links to new – BNPL services in Southeast Asia.
And because nothing sparks a good run quite like an alarming shortage scenario, let’s have a look at tin.
Here’s the kind of rip-roaring conversation taken from an actual newsroom that you’ll hear several times a day if you work hard and become a resources journalist:
“Tin sounds juicy… what’s the lowest it’s ever been?”
“Ooh, from memory, and this is when I covered tin back in the early 2000s it was a few hundred tonnes. Stocks also got to low levels back in 2011 when its price soared.”
And they reckon it’s hard to get kids interested in the trade. But wait, wait, it is exciting because London Metal Exchange warehouses were roughly 1140 tonnes on Wednesday. And 220 tonnes of it were earmarked for delivery that day.
Current available stocks represent about one day’s consumption for the world market.
Here are the companies all of a sudden very, very keen to dust the mothballs of their tin ops as the price touches a 10-year high.
It’s been an interesting, fake, week. Believe us, though, it’s much worse outside the simulation.
Stay strapped in, and thanks for reading.