Why I Would Put 1% Of My Net Worth In Bitcoin…

should i buy bitcoin

Let me start by saying that I am not a bitcoin enthusiast, advocate or even a follower.  At this time I am an observer, at best.

I don’t know if bitcoin – or any other cryptocurrency – will still exist in the next ten years.

I do, however, keep my eye on the price of bitcoin at least a few times a week.

What intrigues me about bitcoin is that it is absolutely hated right now, and no one is talking about it.  History has taught me that you have to pay attention when an asset class goes from boom to bust the way cryptocurrencies have.  Sometimes the asset class makes a resurgence, like internet stocks, and sometimes it doesn’t, like telecom stocks, during the tech and telecom boom and bust.

I have no idea which way bitcoin will go.  But the fact that it has been left for dead makes it a very intriguing investment.  I do not think there will be a middle ground regarding bitcoin’s success or demise – it will either be a huge success or fade into oblivion, perhaps being replaced by something else.

Although the downside to bitcoin is zero, its upside in my opinion is unlimited.  For that reason alone I would have no problem putting no more than 1% of net worth in bitcoin.

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *

Pay Crypto Attention!

Over the last 20 years of my life, I have been an avid follower of equities, i.e. stocks.  I have seen a number of different examples of how buying and holding great companies can transform your wealth over a number of decades.

As I’ve said in the past, I believe that now is the greatest time in history for the average individual investor.

The access to investment vehicles has never been as diverse as it is today.  Platforms like Robinhood make it super easy for anyone to invest.  There are at least 5 to 7 major investment themes that are at the beginning stages and have the potential to become absolutely enormous.

These themes include artificial intelligence (deep learning), robotics, autonomous driving, cloud computing, genomics, biotechnology, fintech, and cryptoassets.

I would like to take this time to focus a little on cryptoassets, more commonly known as cryptocurrency.

Whenever a new technology is introduced, without fail, it goes through what Gartner has coined “the hype cycle”.

Image result for hype cycle

Now, I will admit that in the beginning, I did not closely follow any cryptocurrencies.  I was, however, very aware of the enormous price appreciation that occurred from 2012 on.

When bitcoin was around $1200, I started to periodically track the price.  What I found was that every big drop in price was followed by a surge, in which the price would exceed that in which it had traded prior to its fall.

In 1997, I was a trader at Spear, Leeds and Kellogg, and we traded Amazon when it went public.  We watched it go from $19 per share to over $300 in a matter of months.  Over the next two years, it would go to $456 per share.

By the beginning of 2000, the Internet frenzy reached its peak.  Everyone and their grandmother were purchasing dot coms.  This was a signal that the bubble was about to burst, which it did.

Although the bubble had popped – and the price of many stocks like Amazon fell 70 percent – the promise of the Internet was still very much alive, as evidenced by the performance of Amazon and other Internet-related companies today.

I see similar parallels in the evolution of bitcoin and other cryptocurrencies.

I knew from experience that when the price of bitcoin hit $19,000, a severe crash was about to take place.  How did I know, you ask?  Not because I’m a genius, or because I’m brilliant.  I knew because a loved one, who had never in her life called me about any investment, called to ask me about whether or not she should purchase bitcoin.

That may not be very scientific, but that’s the way hype cycles operate!

Since bitcoin’s plunge of over 50 percent, I have not heard a peep from anyone in my circle about it or any other cryptocurrencies.  What that tells me is that the frenzy has passed, and now might be the time to take a serious look at the cryptocurrency opportunity.

Most retail investors want to buy when prices are rising.  That’s just the psychology of investors.  But the best time to buy is after the frenzy is over and the price seems to have found a bottom.

I cannot say with any certainty that the price of bitcoin has bottomed.  Neither can anybody else.  However… one thing that I can say, with 100 percent certainty, is that cryptocurrencies are here to stay.  They present an incredible opportunity.  If you are not taking a look at them now, you need to start.

Investing in cryptocurrencies was something I really never seriously considered until recently.  I was watching a program on CNBC called “Fast Money”.  One of the traders, Brian Kelly, recommended a particular cryptocurrency called Cardano.

Kelly recommended Cardano because it has a really well respected development team and it is considered to be a serious threat to Ethereum.

After doing more research, I decided to take the plunge and buy a few thousand Cardano coins.  All told, I plunked down $335 to buy 2261 Cardano coins.

My thought process is that if Cardano reaches even 10 percent of bitcoin’s current value – which would be around $800 per coin – I will make about $1.8 million in profits.

So to wrap up: 95 percent of my investment portfolio will always be in stocks.  But with potential returns like these, it is worth it, in my opinion, to take even a hundred dollars and invest it in various cryptocurrencies.

Please share your thoughts in the comments.  Until next time!

*IMPORTANT NOTE: This post describes my personal experience of investing in Cardano and is in no way a recommendation.  

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *

Why I Love Investing in Stocks!

I am by no means a thrill seeker.

I like certain things in my life to be of a predictable nature.  I like knowing that I’m unconditionally loved by my family and friends.  I like knowing that my daughter is always safe and healthy, and that the sun will rise the next morning.

However, there’s a degree of unpredictability that exists in investing that I absolutely love.

For example…when I woke up this morning, I learned that Keurig – you know, the company that invented the K-Cup – was merging with Dr. Pepper Snapple.

This announcement sent shares of Dr. Pepper Snapple up 23 percent in one morning!

Here’s the way the deal will play out.  Shareholders of Dr. Pepper Snapple will receive a cash dividend of $103 a share.  In addition to that, they will receive a share of of the new company for each share of Dr. Pepper Snapple they already own.  This allows the shareholders to participate in the new company.

If you are a shareholder, this all happened while you were sleeping!  You didn’t have to do anything!

What a beautiful thing!  This is one of the reasons I love investing!!!

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *

 

 

Invest In Love For Just $35!

Since 2009, when the stock market bottomed, it has been on am absolute tear. The S&P 500 is up 187% – and that doesn’t include dividends!  I’ve said it before and I’ll say it again – everyone needs to be investing!

For someone that’s new to the market, trying to find a good investment at a reasonable price may be difficult.

Many new investors get sucked into penny stocks because they’re cheap and you can pick up a lot of shares. However…they are cheap for a reason! You’re getting what you pay for – low-quality companies capable of making your hard-earned money disappear in a flash.

Let me suggest a company that has a very bright future in a growing long-term trend. The company is Match.com, ticker symbol MTCH on the Nasdaq.  It ended the day today at $33.99 per share.

Match is the dominant company in the world of online dating. They own other brands that you may be familiar with: OK Cupid, Plenty Of Fish, and the most popular dating app in the world, Tinder.

Whether online dating is your thing or not, it’s the future of dating for most people.  It will continue to gain momentum over the next 10 to 20 years. As long as Match continues to execute  – and I have no reason to think they will not – I am confident in the company’s ability to continually thrive.

Until next time, Joes!

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *

Not Too Proud to Beg!

Today’s post is going to be short and sweet…

Today was an absolutely fantastic day in the stock market.  If you have a 401k, IRA, or just an individual account owning a few stocks, you have seen your portfolio increase nicely since the beginning of the year.

To all my Joe’s and Joettes: we have a President that is pro-business.  No matter what your feelings may be about him as a person, he is pro business.  This has been, and may continue to be, a huge catalyst for the stock market continuing to go higher.

Today there were two companies that were bought for a combined $20 billion.  Trump’s corporate tax cuts will free up a substantial amount of cash for companies to use any way they choose.

This will benefit investors immensely, but you have to be in the market to participate!!!

So folks, I’m on my hands and knees, begging you to make what ever sacrifices you must make in order to free up money to invest.  Get a second job, a better job…start a side hustle…use your tax refund…or do all of the above.  But please, please, please get your ass in the market!

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *

It Feels Like 1995 All Over Again – Part 2!

Yesterday I discussed a theme that I think will be huge over the next 10 years and beyond.  The investment theme is artificial intelligence (AI),or deep learning.  I think everyone should have some exposure in their portfolio.

Today, I am going to follow up with three investment ideas for those of you interested in getting exposure to this huge secular (market-speak for “long-term”) trend.  Without further ado, here we go:

  1. Tencent Holdings (TCEHY): $56.40. I know many of you may not have ever heard of this company before.  Tencent is a Chinese company, and it is an absolute beast!  It is the largest video game company on the planet, and it operates in the largest country in the world.  In America we have Facebook, Yelp and Uber; in China, Tencent is all of those apps wrapped into one.  They are dominant, and I’m confident that they will implement AI to become even more dominant.  AI is based on information.  He who has the most information has a competitive advantage…and no one has more information on its users then Tencent.
  2. Alphabet (GOOGLE): $1,126. Now, this is pretty pricey, at over a thousand dollars for one share.  But it may not look that pricey in 10 years.  I could not leave this off my list, because Google is one of the leaders in AI.  Right now, their self-driving platform is in the lead – if they are first to market, that could propel them to enormous growth.  The projections for the autonomous vehicle market are in the multiple trillions – yes, trillions!  Now I’m not saying that this will necessarily happen, but…Berkshire Hathaway looked very pricey back in 1983, at $1000 a share – and today it trades at $315,000 a share!  Imagine you’d invested in it back then?
  3. iRobot (IRBT): $85.55.  Over the last two years, the best selling vacuum cleaner in America has been the Roomba.  iRobot manufactures the Roomba along with many other household robots that clean your floors.  People want convenience, and they want freedom…and that’s what the Roomba gives them!  It may not be the best product on the market, but it performs the job well enough to have become the top selling vacuum cleaner in the country!  We are without a doubt moving towards a Jetsons existence (link provided for those of you who aren’t old enough to know who the Jetsons are!).  I believe iRobot will continue to be a leader in the consumer robotics category for many years to come.  AI, or deep learning, will only improve their products’ performance, giving them a distinct competitive advantage.

In my opinion, these three companies are set to thrive over the next 10 years, and artificial intelligence will be a big reason why.  I would strongly consider making one, if not all, a part of your portfolio.

Until next time, Joes!

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *

It Feels Like 1995 All Over Again!

In 1995 – when the Internet was starting to enter the consciousness of most of America – who woulda thought??

Who woulda thought that we would go from dial-up services like AOL and Earthlink to broadband and fiber optic cables, dramatically increasing the speed and user experience for years to come?

I remember hearing plenty of people say that they would never use their credit or debit card to buy anything online.  Now these same people do at least 30% of their shopping online.  Who woulda thought?

How many people saw the Internet becoming the most transformative medium of their lifetime?  Not I.  I was asleep at the wheel, like most of us.  I watched, as a spectator, the two biggest trends in my lifetime – the introduction of personal computers and the emergence of the Internet – and I didn’t make a dime.

So, Janes and Joes – what’s the next big trend you should be looking for?  And how can you profit?

Keep your eye on a subsection of artificial intelligence (AI) called deep learning.

Bill Gates, the cofounder of Microsoft and a pretty good futurist, believes that AI will one day be the greatest technological advancement in human history.  Yes, human history.  That is an extremely bold prediction!  But given his track record for being able to see the future, I have to give it a great deal of credence.

So…what is deep learning?

Deep learning is when you program a computer to write code for itself based on mountains and mountains of information.  The more information the the computer has, the smarter it will become.

There are already many examples of AI in day-to-day life.  If you own a virtual home assistant like Google Home or Amazon’s Alexa, you are interacting with AI.  If you use the Roomba made by iRobot, you are experiencing AI.  Every time you go online and search for anything, and later start to see ads relating to what you’ve searched for, that is AI.

We are at the very early stages of this movement, and I believe it is going to be enormous!

The key to making the most money from a new trend is to get in on it early.  I think this is absolutely the perfect time to start investing in AI.  We probably have a two-year window before this technology explodes, so my advice is to start getting on board now!

Tomorrow, I will discuss three companies that will be major players in AI…so make sure to come back and read tomorrow’s post!

Until next time!

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *