Capital Trading Group

Alternative Investments within Managed Futures

The Arms Race: Bitcoin and the S&P 500 Index

Posted by Capital Trading Group on Dec 1, 2017 2:35:23 PM

We hope that you had a wonderful Thanksgiving and that the conversations were as off the cuff as ours. We decidedly opted to listen more than opine as we ingested not only too much turkey but certainly a fair amount of economics and far too much Trump speak, especially from our millennials in attendance. What we didn’t find surprising was the questions about bitcoin and crypto currencies. We didn’t even hear the word bubble, but rather more inquires and questions about the technology in general. The common thesis seemed to be, which one is still a buy the SP500 or Bitcoin? Well our readers certainly know where we stand and we were reluctant to withhold such a formidable position from our willing audience. Our initial explanation stuck right with the technological advancement and its possibilities, not merely estimating future valuation, but rather predicting an exciting arms race in the industry. Maybe that’s the wrong euphemism considering NK is up to their old nuke launch tests. Speaking of, we haven’t quite figured out their motive, but we are certain there is more than meets the eye. Something just doesn’t smell right, for what does NK have to gain in relation to what they have to lose? Ok, sorry off track a bit but anyway as of this writing Bitcoin is pushing the $10k mark and the SP500 is well over 2600 so our best analysis is to just stick with the prevailing winds and say, we see no bubbles here, just simply more of the same fiat debasement going on.

We did handpick, or shall we say cherry pick a few charts courtesy of Zerohedge this week, which does show that the SP500 is exhibiting some true extremes, some things we haven’t seen in a very long time.The first chart we have is SP500 Price to Sales, which hasn’t seen such an apex since 1999 and we all know what transpired after:

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Bubbles no more. Fundamentals no more!

Posted by Capital Trading Group on Oct 17, 2017 9:58:55 AM

          In the chaotic world in which we live, we feel that investors tend to over hype the wrong things and under prioritize the right things.  For a decade now many investors have finally succumbed to the central bank narrative and the continued and never old mantra of “buying the dip.”  The truth has become so self-fulfilling, that there isn’t even a “dip” to buy.  Many pundits have attacked these global markets, have doubted the global markets and even more so have doubted the wherewithal of this rally.  See here is the thing about the human psyche, we humans tends to be risk averse, and we tend to question everything, up until the very end.  The funny thing about time, though, as it moves forward, it seems to leave in its wake, many investors dismayed, many in disbelief.  Many will say, I know I should have been long, I knew this market was going up, I didn’t know exactly why it was going up, but it just keeps going.  We have a feeling that many doubters, those patient risk averse, 60/40 allocating types have tossed in the doubting towel, especially over the last 2 years.

          Let’s just say the enticement has become too much, despite the fundamentals, despite all that is wrong with every value metric out there, who cares, just buy it!  Talk to your friends, talk to Joe Blow on the street, nobody and I mean nobody thinks the markets can fall anymore.  They say that it seems expensive, that it should fall, but it doesn’t, can you blame them?  We don’t! It’s typical of the human psyche to succumb to unwavering pressures.  In fact nobody we speak with calls the equity markets a bubble anymore, which means it’s just being accepted for what it has become, that is the defacto money market for the top 10%.  We get it, but one thing we don’t is why everyone we talk to calls Bitcoin a bubble, are they joking, a mere $100bln market cap and that’s a bubble?  It pales in comparison to the kind of rehypothecated capital that exists out there.  So don’t fall for it, let’s just end the bubble talk any further, for any market in fact, Bitcoin, SP500, Real Estate, forget it,
Bubbles no moreFundamentals no more!

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