TradeSmith Daily

October 2020

Why Central Bank Digital Currencies Will Arrive Faster Than You Think

October 27, 2020John Banks

Central Bank Digital Currencies (CBDCs) are likely to arrive faster than you think. This is partly because they will not be true cryptocurrencies. CBDCs will be centralized, whereas true cryptocurrencies are decentralized. This makes a big difference. The decentralized aspect of a cryptocurrency is what makes it distributed and trustless – meaning there is no requirement to trust a third party in facilitating an exchange. . Because it is decentralized — not governed from a central server or a single

Read now

November 2020

The Crucial Differences Between Monetary Policy and Fiscal Policy

November 2, 2020John Banks

October 2020 was an ugly month for the U.S. stock market. The Dow, S&P 500, and Nasdaq Composite all declined more than 2%, registering their second down month in a row. Some will attribute this market weakness to pre-election jitters. In our view, it is more a reflection of post-election jitters — that is to say, what happens in the months after the election, rather than what happens with the election itself. For the stock market, the immediately relevant question

Read now

How Green Regulation Could Help Save the Oil and Gas Industry

November 3, 2020John Banks

What’s good for investors is sometimes terrible for the U.S. economy, and what’s good for the economy is sometimes terrible for investors. You know that old saying, “What’s good for General Motors is good for America”? Sometimes, that saying is completely backwards. What is bad for an industry can be wonderful for America on the whole — and vice versa. The all-time champion of this phenomenon is the oil and gas industry in the aftermath of the shale revolution. The

Read now

The Three Types of Uncertainty (Aleatoric, Epistemic, and Knightian)

November 5, 2020John Banks

“The political polling profession is done,” Republican pollster Frank Luntz told Axios on Nov. 4. “It is devastating for my industry.” The frustration with polling was further echoed by a New York Times opinion piece titled, “Can We Finally Agree to Ignore Election Forecasts?” The Atlantic also piled on with a piece titled, “The Polling Catastrophe.” Our hunch is that no, we can’t ignore election forecasts, and the polling industry will stick around. The polling industry will keep revising its

Read now

What Ray Dalio is Missing About Bitcoin

November 19, 2020John Banks

Paul Tudor Jones and Stanley Druckenmiller have at least three things in common. They are both multi-billionaires. They are both hedge fund legends in the global macro space. And they have both publicly endorsed Bitcoin and confirmed they are long. Ray Dalio is another global macro hedge fund legend, with a net worth in the vicinity of $15 to $20 billion. Dalio is the founder of Bridgewater Associates, the largest hedge fund in the world and one of the most

Read now

When Will Bitcoin Have a Meaningful Correction? (Don’t Hold Your Breath)

November 24, 2020John Banks

Bitcoin’s performance in recent weeks has quietly shocked Wall Street. At the time of this writing, Bitcoin is up more than 41% for the month of November alone — with a week of 24-hours-per-day trading left to go — and less than $500 from its all-time high set in 2017. The drumbeat of Bitcoin endorsements from financial heavy hitters is starting to feel relentless. In these pages we have talked about MicroStrategy, Square, Paul Tudor Jones, Stan Druckenmiller, and even

Read now

Why Mental Capital is Just as Important as Financial Capital

November 25, 2020John Banks

Editor’s Note: When the end-of-year holidays roll around, we like to revisit an assortment of “best of” pieces taken from throughout the year. And what a year it has been. Given the degree to which 2020 has been mentally taxing for almost everyone, it seems fitting to revisit the topic of mental versus financial capital, and the reasons why both are equally important. — JCL Investment success depends on two types of capital, financial and mental. We are all familiar

Read now

Bitcoin is the Purest Form of ‘Hard Money’ Ever Created

November 26, 2020John Banks

Bitcoin could be one of the greatest public investment opportunities in all of recorded history. That’s not hyperbole. We are serious about this — and we come to that view having studied Bitcoin intently for more than two years, and global markets overall for more than 20. There are venture-capital opportunities and private-investment opportunities that can deliver multi-thousand-percent returns. But these opportunities are not public in the sense of being widely available and easily accessible for any investor at any

Read now