I’ve struggled to actively trade over the last couple of months because I lack faith in this market and can’t form a strong opinion about what will happen in the short term.
It seems like there’s a bit of a conflict in the market right now between optimistic tech / retail traders battling against the more traditional funds, which are pulling back & selling off as the 10-year treasury moves, among other things. Or at least rotating.
Anecdotally I’ve seen this split in sentiment where we have strong market opens in the morning (retail/traders) pushing up the beaten-down tech names only to have the market reverse course as professionals are selling late in the day.
This was especially true for Tuesday when the 10-year yield shot up.
After rapid rate increase to start 2022, investors see benchmark 10-year yield rising to 2% soon
My impression is that the first half of this year will be choppy to flat or even down as these market trends continue to fight it out for the market narrative and funds rotate out of growth businesses into flat ‘durable’ businesses. Ultimately a lot will probably come down to what the fed does or doesn’t do with regard to liquidity & interest rates.
Since there aren’t that many interesting stock stories this month, I’ll instead include some casual predictions for the markets & crypto instead.
2022 predictions for stocks & crypto
1) Brave web browser usage & their Basic Attention Token $BAT should continue to grow after moving over to the Solana $SOL blockchain.
Brave browser is quickly becoming one of the best privacy-focused browsers out there and its usage is rising among the crypto community.
It’s a fork of chrome, so it’s highly functional & easy to use, but it blocks all ads & trackers by default. I recommend switching over.
If you enable their custom ad notification format, you can earn $BAT just from using the web. A slow-motion vampire attack to steal chrome users. Why should google get all of that ad revenue? It’s your attention, after all. You should get paid for it.
2) We’re gonna see 100k Bitcoin $BTC sooner than many realize
The market was digesting months of forced selling as a result of the China bitcoin ban, which included that exchanges had close accounts before Dec 31, 2021.
I think it’s possible that if Bitcoin passes & holds above $53,000 then we could see it run higher, very quickly. If that happens it wouldn’t surprise me if we briefly touch $100,000 by Q2/Q3 and possibly sustain it by the end of the year. Hence why I’ve levered up to the crypto mining stocks lately.
3) Head fake stock market sector rotations will continue on & on & on
Big funds are likely going to continue to rush back into & out of high growth names for the foreseeable future, although they might play it a bit safer by sticking closer to Apple & Tesla & Nvidia as opposed to the stay-at-home winners.
The reason for this is that I think there’s still too much money still slushing around, with nowhere to go so they will have to continue to chase growth. Then will dump it on retail traders for profits, rotating back under the guise of interest rate hiking & tightening Fed policy. Rinse & repeat.
Hence why I’ve dabbled back into some beaten down names but I believe more in crypto. Have you seen how much Square (Block) $SQ has pulled back?
4) NFTs, broadly, will continue having a slow-motion bear market
I don’t know if NFTs will have a big ‘crash’ event in the same way that crypto has had in the past but their insane hype is slowly fading and an over-saturation is leading to holders realizing there’s few buyers of such an illiquid asset. Bored Ape Yacht Club is bucking the trend as it’s become the celebrity-cool access NFT of the moment.
I lost money on my poor NFT dabbles and I am calling in a learning experience to save face. I’ll try to get into VeeFriends round 2 when it happens as they have a strong focus on community & access over art.
That said, I do think that Particle Collection is a pretty cool concept – buying art, transferring it to foundation that can never sell, then fractionalizing it into NFTs for view/access. First art is a Banksy original they purchased for $14mm. Listen to an interview or visit Particle Collection.
5) The Braindrain away from finance & web 2.0 will accelerate
It feels like we’re already seeing hordes of developers abandon their big-ad-tech-based businesses and rush to crypto. This is now starting to spread into finance as crypto is the ‘cool’ game in town. Why get excited about trading GoDaddy or Dow chemical shares when you can ape into random token for billions in the crypto Wild West?
I’m exaggerating a bit but I’m already afraid of the difficulty in hiring the best developers going forward. Why would they even want to work in a web2 company when they get so much more freedom, autonomy & ownership in web3?
Predictions over. Here are some headlines. Let’s stick with crypto.
Is Apple going to add Bitcoin support?
Tim Cook owns some crypto & he claims they aren’t looking at it from a treasury perspective. But they must be looking at it from a user experience & financial services perspective.
It’s only a matter of time before crypto has a native integration to the wallet & Apple pay. This article believes that it will be Bitcoin $BTC.
Tim Cook said Apple is looking at cryptocurrency – Here’s what the company is likely to do
Crypto is so mainstream that marketers are ruining it
I’ve felt many times during the past year that ‘this time is different’ with regards to crypto going mainstream. That has included things from El Salvador adopting Bitcoin as legal tender to big brands like Adidas getting into NFTs.
Here’s another great example of how we’re entering into uncharted territory – just look at this thread of mainstream companies hiring for crypto roles. We’re still so early.
Mainstream crypto jobs
Be angry over NFTs or get on board
A short Twitter thread from back in September that provides a very different perspective & analysis of why NFTs can sell for millions of dollars.
Jack Dorsey makes some big moves
Jack Dorsey stirred up Crypto-Twitter this past month. First he quit Twitter to go all in on Square (hint, that was just to go all in on $BTC).
Then he renamed Square to Block (ticker stays $SQ) to represent their focus on blockchain & related products/services. (Hint again, really it’s all $BTC).
And to top it off, he parachuted back into Twitter a week or so later to shit all over web3 & VCs, taking a play out of Elon’s free-attention playbook.
I sold my few Twitter $TWTR shares (although it could still be a dark horse in ad tech) and put more into Block $SQ.
Dorsey quits Twitter to go all in on Bitcoin
Jack’s Twitter salvo that blew up crypto twitter (read replies and/or scan the read of his timeline for more)
Hell of a Nasdaq chart, something wicked this way comes
I’ve seen some other analysts indicate that the next step in the market contraction will be when the remaining Nasdaq leaders like Apple $AAPL will be the final stocks to fall from tightening. Be careful out there.
Never fear though, Cathie is here to save you.
Ark’s Cathie Wood claims that her innovation stocks are not in a bubble. In fact, they’re in deep value territory (as long as you can wait a few years).
In this article they explain why and show how the stock price movements of some names like Zoom $ZM don’t match to the business performance or potential to go up from here.
Innovation stocks are not in a bubble
Biotech is on sale
You may be able to pick up some bargains in biotech after it has pulled back. I actually bought a little of Ark’s Genomic Revolution ETF $ARKG for my nephews’ custodial accounts since it’s so down and they have a long time to wait.
Michale Yee of Jefferies shares firm’s top conviction names
Some stocks that could grow more than 100% next quarter
I haven’t been following Beth very long so I can’t vouch for her accuracy but I agree with her that Coinbase $COIN will have a strong year. Other names, not sure, I need to do more research.
Unfortunately $SE & $JD are also discounted recently
Thanks to big market moves by Tencent, two other names I like have come down in price. Both businesses are rock solid.
Tencent sells its stake in JD & some of it’s stake in SE
That’s all I have to start the year. Let’s hope the first half of the year isn’t so bad for stocks and Bitcoin moons.
-B
I believe in Win & Help Win.
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