News

August 2020

Look Who’s Buying Gold and Gold Stocks Now

August 18, 2020John Banks

Last week we argued Berkshire Hathaway should rationally own Bitcoin, and laid out the case as to why. We aren’t holding our breath, however, because Warren Buffett despises Bitcoin. (According to Becky Quick of CNBC, he has called it “probably rat poison squared.”) Buffett is also disdainful of gold and has been so for decades. In the Berkshire Hathaway annual letter for 2011 — which was written in February 2012 — Buffett compared gold to farmland and energy assets. He

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Vladimir Putin Said What?

August 12, 2020John Banks

On Aug. 11, Vladimir Putin announced to the world that Russia has confirmed a successful COVID-19 vaccine. He assured the world it was safe, and that his own daughter had taken it. “I know that it works quite effectively, it forms a stable immunity,” Putin said. “I repeat: it has passed all the necessary tests.” That last part, about passing all the necessary tests, was an outrageous fabrication in our opinion. The Association of Clinical Trials Organizations, a Russia-based industry

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The U.S. Dollar Just Had its Worst Month in a Decade

August 4, 2020John Banks

In the month of June, we sent a report to TradeSmith Decoder subscribers titled “The Best Time to Buy Gold Stocks in 90 Years.” The report emphasized the precious metals stocks we liked best — many of which were purchased for the TradeSmith Decoder model portfolio — and noted the likelihood of accelerated currency decline. In the following month, July 2020, the U.S. dollar saw its worst single month in a decade, according to the Financial Times. The trade weighted

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July 2020

The Robinhood Retail Mania Has Now Gone Global

July 29, 2020John Banks

On July 13 we explained how Silicon Valley engineered a retail trading mania. As it turns out, the mania has gone global. “India’s retail investors are leaving their mark on a risky corner of the nation’s $1.9 trillion share market: penny stocks,” Bloomberg reports. “A custom index of 800 stocks that quote below 5 rupees (7 U.S. cents) has trounced the S&P BSE Sensex index by 36 percentage points this year.” In June, Bloomberg goes on to add, the penny-stock

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The Spectacular Twitter Hack is a Harbinger of Cyberwar

July 17, 2020John Banks

Twitter fell prey to a spectacular hack on Wednesday, July 15. It appears to be an “inside job,” with the hackers using a form of employee access to break into Twitter’s main database. The hack was spectacular not due to the amount of money stolen — a little more than six figures as of this writing — but rather the celebrity nature of the accounts compromised. The hackers sent out false tweets from, quite literally, some of the world’s most

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There is Plenty of Bullishness Here

July 14, 2020John Banks

On Monday of this week, your TradeSmith Daily editor was accused of being a “permabear.” Normally we don’t mind insults. Sticks and stones and all that. But the “permabear” label feels odd when, in truth, we are aggressively bullish right now, and have commentary and portfolio positions to prove it. In terms of TradeSmith Daily commentary, we have pounded the table — hard enough to break it at times — for Bitcoin and precious metals stocks in these pages. As

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How Silicon Valley Engineered a Retail Trading Mania

July 13, 2020John Banks

2020 will be remembered for kicking off a global pandemic. But it will also be remembered for a market mania, driven to a surprising degree by bored sports gamblers, millennials taking a flyer with stimulus checks, and day-trading retail investors new to markets overall. We know the Federal Reserve provided psychological support (through an implied promise to support markets no matter what). And we know the U.S. government provided fiscal support, what one might call “helicopter money,” via the first

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Lockdown-Related Market Risk is High and Rising

July 10, 2020John Banks

The U.S. stock market has benefited, tremendously, from a belief that the Federal Reserve will support the market at all costs. It has also benefited from a belief that, whatever happens next with the pandemic, the worst is over from an economic perspective. Investors are eager to put COVID-19 behind them. What happens, then, if multiple U.S. states implement new lockdowns, as hospital systems threaten to be overwhelmed (again) as COVID-19 fatality rates rise? “Up until now the U.S. has

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Warren Buffett is Back in the Game, Sort Of

July 9, 2020John Banks

Warren Buffett is back in the game, sort of. He is only spending 7% of Berkshire’s $137 billion cash pile, but it’s a start. In the aftermath of the 2008 financial crisis, Buffett acted boldly. His distressed-asset deals helped support blue chip companies like General Electric, Goldman Sachs, and Bank of America. This time around, though, Buffett has not been bold. The market saw a panic sell-off in March, and then a historic rebound, and still Buffett didn’t buy anything.

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Three out of Four Election Scenarios are Bearish — and One is a Nightmare

July 1, 2020John Banks

In early November, which is not far off, the U.S. will hold an election in the midst of a pandemic. (We say “in the midst” because, by November 2020, there is a very small chance the virus will be gone — and an overwhelming likelihood it will not.) The stock market is ignoring the election, or otherwise failing to adjust the odds as of this writing. We say this because three out of four election scenarios are bearish, and one

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June 2020

America’s Top CEOs are Not Optimistic About Recovery

June 30, 2020John Banks

Who thinks the business impact from coronavirus will disappear quickly? Not America’s top CEOs. They see pandemic-related challenges lasting until the end of 2021 — and perhaps even longer. The Business Roundtable, founded in 1972, is an association based in Washington, D.C., that only has CEOs as members. Unlike the U.S. Chamber of Commerce, where membership exists at the business level, only a company’s top executive can join the Business Roundtable (BRT). The BRT released its latest quarterly report this

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PayPal and Venmo Could Soon Embrace Crypto — Which Would be Huge for Bitcoin

June 29, 2020John Banks

PayPal and Venmo could be adding cryptocurrency to their suite of payment options. Inside sources verified by CoinDesk, a crypto-focused news service, say a built-in wallet feature could be rolled out within three months. There is no official announcement yet — only the CoinDesk sources — but if true, this would be a huge development for Bitcoin, and other crypto assets, too. For PayPal and Venmo, meanwhile, the timing would be excellent. “My understanding is that they are going to

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