November 2020 'The internet enables eigth billion monopolies' - Naval
Tuesday 3rd November 2020
The Reserve Bank of Australia today did as expected, cutting the cash rate to 0.1% and announced a $100 billion dollar government bond buying initiative over the next 6 months.
They also signalled further measures if necessary, which is interesting, because they’re now stepping out of their original role into a newer role in attempting to have 2-3% inflation (which no central bank as been able to do for a decade).
Essentially there’s been a 30-year war on cash, which has not surprisingly inflated property and share market prices. Back around 1990 you’d get 15% return on your cash in the bank and also be paying around 18% interest for mortgage debt. Today you’ll be luck to get 0.5% and we’ve not even mentioned inflation during the past 30 years.
These lower interest rates, make taking on debt cheaper so assets that provide a return (property and shares) become more valuable and are bid up by cheaper and cheaper debt over the past three decades.
We’re now at 0.1%, the RBA had been buying bonds regularly and is committed to $100 billion more.
Clearly the government is taking an ‘at all costs’ approach to this. Where to next, I have no idea.
Wednesday 4th November 2020
US election on today, it’s so close the counting continues into tomorrow. What isn’t surprising (again) is how wrong and misleading ‘the polls’ were this election. It’s a repeat of 2016 demonstrating how worthless they are.
Stock markets until this point have rallied.
Friday 6th November 2020
Crazy 48 hours. Amazon’s up about 8% along with pretty much everything other FAANG business and index, while the counting in the US continues…
In other news, media from China reporting they’re committed to cutting $6 billion dollars of exports from Australia.
Sunday 8th November 2020
According to media Joe Biden is the new President elect. Footage of tens of thousands across the USA celebrating, hugging and dancing in the streets. Apparently COVID isn’t an issue anymore? What a joke…
Tuesday 10th November 2020
The S&P500 jumped again over night while the NASDAQ fell 1.5% after vaccine talk ramped up. Zoom dropped by 17% in one day, after being up enormously the since March.
Monday 16th November 2020
Read an article of abut Evans Dixon in 2018 where a long list of wealthy well known investors (Kerry Stokes, Rob Milner, Richard Goyder, even golfer Greg Norman tipped in $400,000) at float price of $2.50 it’s now around $0.59cents and is now being pursued by corporate regulators.
Emailed the article to xxx who replied ‘it’s a good wake up call not to rush into these start-ups just because some successful business people have invested’.
Wisdom mate!
The ASX was flying this morning and by 10:30am it stopped transacting. A technical issue apparently. From liquid to illiquid in a second. That was it for the day.
Wednesday 18th November 2020
At midnight tonight, South Australia enters six days of full lockdown thanks to a small number of COVID cases…
A few months ago a big deal was made of Warren Buffet’s company Berkshire Hathaway buying into a gold (and copper) mining company. He didn’t buy gold, he bought the business of a gold and copper mining business. Recently BRK sold down 42% of that investment.
What’s most interesting about this is Buffett doesn’t oversee every investment BRK makes. He’s got a couple of fund managers who manage aspects of the portfolio. Who’s to say it isn’t one of them?
In other news, Bitcoin is roaring back. It’s up 145% year to date, up 93% since it’s halving in May and up 600% since it’s COVID low.
Thursday 25th November 2020
Victoria released its state budget. Its net debt is due to climb to $155 billion in the next three years. One journalist I saw put it this way ‘debt doesn’t matter and feelings govern policy’.
ASX price wise today, is back where it was in January before COVID. I guess that could signal the end of the COVID Crash?
Bitcoin and other crypto coins are continuing their surge. Had lunch with a mate today that’s right into this space share some interesting happenings. Another mate called telling me he was at lunch today someone there what saying he put $80k into some coins earlier this week and is now sitting on $200k equity.
It’s probably around this time the crazy stories start to emerge.
Monday 30th November 2020
It’s been the best November in the Australian market in 32 years, up around 10% for the month.
Got to say it’s noticeable. Despite the fear and noise in March through June I found it way easier to invest then compared to now.
With so much government stimulus, company earnings generally down, lowest interest rates in history pushing prices up, it’s feels more expensive now than in Jan/Feb this year.
No wonder asset prices are increasing though. The government has sent a strong signal they’ll use any means of fiscal policy possible to keep the economy from any type of reset.
Our fragile economy powers on ever more fragile by the day.