Paul Scott - Small Cap Value Report - COMMENTS AGAIN11 Jan 2021 12:43
John Authers article today
I'm a big fan of John Authers (formerly FT, for a long time, now at Bloomberg) daily email articles. I try to read it every day. Today's article is particularly interesting. In it, he compares Tesla (disclosure: I'm short, again) 800% rise in the last year, with the 1999-2000 TMT boom & bust. His conclusions, and the evidence he provides, are thought-provoking.
I agree with his conclusions, that there are good reasons why markets as a whole are where they are, but within that, there are pockets of really extreme over-valuation. Risk:reward on Tesla is therefore terrible at current levels - even if it does as well as people hope, in the upside bull case, it's still too expensive!
In the 1999-2000 TMT boom, people buying at the top, had to wait 10+ years to get to breakeven, even for great companies like Microsoft, Amazon, and Cisco, which he uses as examples.
Well worth a read! I'm not sure how you sign up for his free daily email, but it's highly recommended.
I'm also short of Bitcoin again, as I've digested all the bull & bear arguments, and understand it pretty well. It strikes me as a gigantic speculative bubble. If you're worried about fiat currencies being devalued with QE (a reasonable position), then don't hold so much cash. Put it into property, or shares, or other genuine assets. Putting it into worthwhile computer code, seems to me to be folly, long-term. In the short-term though, Bitcoin bulls can thumb a nose at bears like me, as they're making the money (at least on paper), for now. It remains to be seen who is right in the long run.
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