Contributed by Isaiah McCall.
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“I am financially demoralized.”
That was the ethos of several emails I received this week. Some were even on the brink of selling their entire portfolios.
I wish I had good news. But I don’t
We’re heading for 2008 round two, except this time the markets are on bath salts and have “Florida man” energy. On the bright side, this economic recession is a battle of attrition. All you need to do is outlast your enemy — and your enemy is the urge to sell.
If you continue to dollar-cost average into high-quality investments you will see an economic turn-around, eventually.
So, here’s where the smart money is heading.
Polygon (MATIC)
Facebook announced it will build its NFTs and other meta-apps on Polygon.
Any other day this would have sent the price of Polygon flying. Instead, because we’re in this bear market, Polygon is at historic lows.
For me that just means Polygon is on sale.
Polygon is also going carbon negative soon which will certainly make it more attractive to developers and users.
If Ethereum’s true potential gets unlocked with Ethereum 2.0 and Layer 2’s takeoff, Polygon will easily be a top 10 cryptocurrency by market cap.
Terra Luna (LUNA)
Terra Luna $1 when?!!?
Is the massive recovery possible?
No. Stop it. Get help. Now that Terra Luna has collapsed idiots online believe that holding millions of tokens means they’ll one day be rich.
Wrong.
The only people who made money off of Terra Luna are the people who shorted it all the way down to zero. Whether Terra Luna forks or burns the rest of its supply doesn’t matter. It has zero long-term value and now has the same credibility as an MBA from Trump University.
The fact that people still believe in Terra Luna makes me think we shouldn’t exist as a species. Erase us from the annals of history and let’s start over with amoebas. They have more going for them than we do.
If you want to gamble your life savings go to Vegas. At least there you have a chance of winning.
Cardano (ADA)
I was wrong about Cardano.
Over the past year I’ve given Cardano harsh criticism including:
- Calling out Charles for overpromising and underdelivering
- Concurrency issues and other legitimate bugs
- ADA’s manic, often delusional community, which still exists and will yell at me on Twitter after this.
However, Cardano is finally starting to make real-world progress.
Currently Cardano has the most active developers in the space and is far ahead of its competitors in terms of decentralization and security. Cardano also has its upcoming Basho upgrade which will give it the ability to scale.
Right now Ethereum can only handle 15 transactions per second. Cardano, with its upcoming upgrade, will be able to handle thousands of transactions per second. This makes Cardano a sleeping giant during this bear market.
Michael Burry’s Portfolio
Let’s interrupt this program with a special message from Michael Burry. You know, the one-eyed guy from The Big Short who bet against the subprime mortgage market and won.
Michael Burry hates the American economy. He also hates tech and bets against it constantly. That’s why it surprised me when he suddenly sold all his value assets, reversed course and went heavy into tech stocks.
Burry’s sudden reversal here is a lesson in value investing. It’s not always about “buying dips” or predicting what the fed will do every second; it’s about buying good companies and assets at a good price.
Tech, including crypto, is at prices so low they might as well be marked clearance. That’s why Burry bought in. With that said, I still believe were early into this market crash and can go lower.
(Check back around August-October)
We’re not at 2008-levels of panic in the markets yet. Once we see large investment funds fail — like Cathie Wood’s insanely risky ARKK funds — credit markets start facing dysfunction and we see people on Bloomberg begging for the Fed to lower interest rates then we’ll be looking at panic. That leads us to my two favorite investments during all of this.
Bitcoin and Ethereum
Is this the bottom for Bitcoin and Ethereum?
God, I hope not.
I bought more Bitcoin and Ethereum this week as I’m confident in the fundamentals of both projects. Both have sound monetary policy, strong communities, and are battle-tested.
I also believe that Ethereum will continue to outperform Bitcoin in the long run as Ethereum’s long-awaited Eth2.0 upgrade starts to materialize.
With that said, I believe both projects have a place in every portfolio as they offer different use cases: Bitcoin is digital gold offering a decentralized place to preserve your wealth while Ethereum is digital oil opening the door to a world of decentralized applications.
Financially Bored
Whatever you do during this recession don’t get bored.
Boredom is the number one killer of portfolios.
Most people lack the delayed gratification gene and lose the will to keep their money invested. They see their portfolio going down and they can’t handle it.
This is the number one reason why people underperform the market; they lack the discipline to stay invested during bear markets.
So what can you do to prevent financial boredom?
- Find a good book (I recommend ‘The Tyranny of the Federal Reserve’)
- Find a good girlfriend (I recommend deleting Tinder)
- Work on your fitness (Do some hot yoga, you’ll find a cool girlfriend there)
Just don’t sit there like a lump. Being financially stable isn’t a purpose. It’s a side mission. If your life isn’t interesting before financial stability, it won’t get any better after. I promise you that.
So there you have it. Where the smart money is heading during this bear market. Stay disciplined, stay the course, and whatever you do, don’t catch “Florida man” fever. It’s not worth it.
Ever since I was a child it was my dream to become a financial advisor. Unfortunately, it never came true. Therefore I am not a financial advisor and you should do your own research and not just listen to random people on the internet. Nothing contained in this publication should be construed as investment advice.
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Contributed by Isaiah McCall.
