Tuesday 2^nd February 2021

The RBA met today, kept rates on hold and committed to buying another $100 billion dollars in bonds. I’ve lost count how of many hundreds of billions of dollars of bonds they’ve bought since March 2020.

This announcement sounds like they’ll extend their quantitative easing beyond the planned April cut off. It seems an insane amount of fiscal support especially and I quote ‘the economic recovery is well under way and has been stronger than was earlier expected’.

The share market has being doing its things, going up and down and up again.

Yesterday USANA Australia and New Zealand lowered the weekly commission threshold to $5cvp (that’s $7AUD). This is great news! When I first started in USANA in 2004 the minimum payout was $100cvp (or about $165AUD at the time) meaning it was harder and took longer for people to get paid. I’m a huge advocate of this change.

Also yesterday I listened to Elon Musk live on ‘Clubhouse’. This technology is fantastic and can potentially eliminate news services and therefore also eliminate the narrative they push too. Long form audio is the way to go. Podcasts have demonstrated this and Clubhouse is doing it live now. What a time to be alive!

 

Wednesday 3^rd February 2021

xxxx sold xxx (an individual company) today now the price has recovered enough to sell at profit. He messaged me:

"Everything seems high, or is it just in my mind? Won’t be high in 10-20 years I have to keep telling myself.”

Me:

“You’re right, it feels high. Perhaps DCA it in over the next few months (over and above your current monthly DCA execution), if you don’t feel comfortable? Otherwise, just dump it into the places you want more of and be done with it.

It’s going backwards in cash and the money was in the market anyway so may as well put it back in immediately, just more broadly this time.

How many people didn’t buy because it was too low and scary during March, April and May? Now may of these same people aren’t buying because it’s too high. The solution is to just buy. High, low it doesn’t matter so long as we’re consistent.”

Him:

“Just put buys in for xxx and I might get so more xxx as I think it’s ok value. Also their dividend is coming up soon”.

In other news, the short squeeze on GameStop appears over. It was down around 250% over night.

Apparently each trillion dollars finding it’s way to crypto’s equals $50,000USD in BTC price appreciation I’ve heard. It’s projected $200-$400 trillion will flow into cyrpto’s over the coming decades. This is incredibly unscientific in terms of my sources and the sample size (there’s only a one trillion dollar market cap now and price is closing in on $50,000).

It’ll be fun to come back in 10-60 years to reveal the accuracy of this information.

 

Thursday 4^th February 2021

With destination events in USANA off the cards during 2020 and certainly during 2021, a group of my business partners decided to go camping for a few days (instead of the usual multi days destination events we attend each year in various locations) on Lake Ainsworth at Lennox Head in northern NSW.

Lake Ainsworth is a tea tree stained fresh water lagoon (you can see it in the photo) that's just 100 meters from the beach and 10 meters from the camp site. It's a fantastic spot.

We had an absolute blast scoring the greatest weather possible.

With COVID impacting our usual pre-COVID USANA event schedule and technology improving so much, I see our in person events being recreational, fun (camping trips, surfing, fishing, monthly breakfasts at beachside café, etc) and hanging out, while the ‘work’ is done online.

The strongest don’t survive and thrive, the most adaptable do. Plus, this model seamlessly gels with my lifestyle and vision.

As an example, in the past we had to collect all customer information, product order, and payment details and manually enrol him/her into the system. Now, we do none of that. This link does it all: become a customer

Loving the direction USANA’s going and the direction we’re going in as business owners.

 

Monday 8^th February 2021

Old school listed investment company ARG announced their interim dividend today. Half yearly profits down 43%, earnings per share down 44% and the dividend down 12.5%. This company is a good reflection of the broader Australian economy.

They’re doing their stated job for shareholders ‘smoothing’ the dividend from their cash and franking credit reserves during challenging times. In the good times, they hold some of the earnings back and give those held earnings back to shareholders during times like these.

While ETF’s such as VAS, STW, A200, VGS, etc that have a trust structure, as opposed the ARG’s company structure, pass on all earnings to shareholders plain and simple. This means, the distributions can be lumpy and less predictable.

Both are excellent and weather you lean towards one, the other or a combo of both will likely depend on your personality more than anything.

 

Tuesday 9^th February 2021

Skills pay the bills.

Work works.

Don’t wish things were easier; wish you were better.

Don’t wish for less problems, wish for more skills.

Why the sayings?

The RBA recently signalled employees wont see a pay rise until the middle of the decade at best, saying business and government (good luck with that!) would need to take the lead to drive the economy forward.

In more exciting happenings, over night Elon Musk bought $1.5 billion worth of Bitcoin (BTC) via Tesla balance sheet. Apparently this makes up 15% of TSLA’s net cash position, so while other investors/CEO’s of listed companies have dipped their toes in with 1%-2% net position, Elon has dived in with double figures.

Furthermore, TSLA will soon be accepting payment in BTC.

As expected, BTC reached another all time high (ATH) overnight on this news, as did a bunch of alt coins. One I’ve held for three years is this morning, finally in the green and a few others are up over 100%, 200% and 300%.

Who knows where this could go?

One thing I know for sure and have plenty of experience with is opportunity cost and how painful it is, when it comes to markets.

The other thing I know for sure is I don’t know how this will all play out. The best way to learn is to have skin in the game so that’s what I’ve done, learning via personal experience as Buckminster-Fuller said.

 

Saturday 13^th February 2021

Mastercard has jumped on the bandwagon, saying it’ll support selected ‘cryptocurrencys’ on its network later this year. The price of BTC and many alt coins continues to rise.

A friend who was an early adopter told me his portfolio jumped over $200,000 USD in less than two days recently and one of his earliest buys is now over 100x up in price.

He put’s in at least $1000-$2000USD per coin, so using the $1000 amount, that $1000 has grown too over $100,000USD for that one coin. Mind blowing.

In other news, Victoria has gone into hard level four lockdown for greater Melbourne for 5 days, because of 13 cases of a new strain of COVID.

I turned on the Australian Open tennis late last night to watch the crowd get ushered out of the stadium while watching world number one Novak Djokovic on court. Strange times…

Overall Australia is sitting pretty COIVD and lifestyle wise compared to the rest of the world right now. I feel this is more due to randomness (being an isolated island nation with plenty of sunshine, a warm climate, a large country with a small population) than human design.

 

Tuesday 16^th February 2021

I’d love feedback on this…

Real estate is accessible too a limited number of people.

The stock market is accessible to the majority of people.

Cryptocurrency (BTC, etc) is accessible to all of the people.

With the lower barrier of entry and the global free market this technology operates in, in some cases it’s the only investment like opportunity much of the world has.

Living in Australia, it’s the lucky country, it’s paradise compared to much of the world and it’s easy to forget just how good we have it here. Stable government, stable currency, stable financial system, etc. This is not so in a bunch of other countries.

Add to this only about half the planet has assess to the Internet, will be interesting what happens when a further 1 – 3 billion people gain access to the internet.

It’s an interesting thought.

 

Wednesday 17^th February 2021

A couple of my favourite LIC’s have reported their 6 months to December and no surprise their earnings dropped around 40%. Thankfully for investors who rely on their dividends, they’ve maintained their interim dividends, paying the short fall in earnings from retained earnings and franking credit balances.

This is a key feature of a few of the old school LIC’s. They hold some back in the good times giving it back to you in challenging times via smoothing dividends.

I don’t rely on any investment income, so it’s not issue.

In other news, BTC has hit another ATH of $50,000USD. As I type it’s blown past that now $51,471.82USD. It’s only taken around a month to increase from $40,000USD to now over $50,000USD.

That’s 25% growth in less than a month, after 300% growth during 2020.

 

Thursday 18^th February 2021

At the risk of turning this into a diary on crypto’s over night:

• Microstrategy now buying up to an additional billion dollars of BTC
• Morgan Stanley’s applied to the Security and Exchange Commission (SEC) to create a BTC ETF
• Black Rock (the worlds largest asset manager) said they are buying BTC.

Add these to the long list of large institutions having done the same and it’s no wonder the price and popularity is fever pitch.

Personally, my strategy hasn’t changed, despite little mention of it. It’s boringly simple and easy to do. DRPs’ set up on all my holdings and DCA’ing into the market every month at minimum with a focus on increasing the international allocation this financial year.

 

Friday 19^th February 2021

After close to 17 years in USANA https://www.usana.com/s/QQUQ52 it apparent people with real world business experience (have run their own businesses, any type of business) value and understand USANA’s business model advantages more than those with no business experience (have never run their own business).

Yes this is a generalisation and there is of course no shortage of exceptions, but on the whole, it’s been my experience.

As an example:

Just got off the phone with a friend who runs his own business and he was talking about risk.

His business requires him to have a bunch of equipment and a qualification before even a dollar is made. This is a ‘high start up’ business USANA is a ‘lower start up’ business as qualification and/or equipment are not required).

If he doesn’t get paid (from a developer for example) or get’s shut down due to economic conditions, he’s stuck with equipment and left ‘holding the bag’ so to speak.

He said with USANA if you went out of business or stopped, you’re free and clear. You hold no products and have no liabilities. It’s so good.

He’s spot on.

 

Saturday 20^th February 2021

Bitcoin hit another ALT and Etherium late tonight hit an ALT too, over $2000USD.

A friend’s portfolio increased $111,000USD between falling asleep last night and waking this morning. Amazing!

In other happening, so musicians are selling the rights to their songs for a lump sum to investors. In return investors receive their royalty income when songs are played around the world.

The hunt for passive cash flow in this low interest rate environment never ceases.

 

Wednesday 24^th February 2021

Used Stake for the first time this morning to add a US company, thanks to the AUD having come up a bit recently on the exchange rate front and some pullback in prices in the USA.

Stake offers Australian (as well as New Zealand and United Kingdom) citizens direct investment in USA companies and ETF’s with no brokerage costs. This is fantastic considering the fee’s Commsec (the platform I use for domestic buying) are ridiculous, especially for international purchases.

Stakes makes their money by charging 0.07% on the money exchange. So every $1000AUD dollars you transfer costs you $0.70c each way.

For years in my USANA overviews I’ve said ‘every inefficient business model will be replaced by a model of greater efficiency’. Exactly what we’re seeing in brokerage fees and platforms.

Stake also gives both you and me a free stock if you decide to join via my referral code mitchellk797. It’s a random out of Dropbox, GoPro and Nike. None are companies I’m excited, about by I’ll take free equity.

Naval says it best: ‘you must own equity – a piece of the business – to gain your financial freedom’.

 

Thursday 25^th February 2021

Used Stake again this morning thanks to a pullback in price in the USA.

Behaviourally got to say paying no transaction fees make a difference. It’s easier mentally to buy and buy again the same day or on consecutive days. I wonder how much having no fees to buy/sell for US citizens is having on the markets?

Having to pay fees every time I buy domestically has just become a bigger drag in my view. Wonder how long until our fee’s a disrupted and pushed towards zero?

Long-term bond rates are creeping up. This may throw a spanner in the works…