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Let’s touch on some important tech stuff this morning.
Facebook is continuing to struggle to get and stay above $50. I think it’s got more upside next year, but into year-end, it’s tough to call. I’ve sold all my FB call options and trimmed some of my FB common when it was above $50 the first time a while ago. FB has been one of my biggest positions since it fell below $20 and we loaded up on it, but I wouldn’t blindly plow into it just now. You know I always preach using tranches to get into a new position (or to build an existing position up), and FB looks like a good first tranche buying opportunity below $50 and then wait for the next pitch.
Intel and Microsoft have both recently been sustaining their recent rallies and the stocks are near multi-month highs. I trimmed down some of my MSFT calls earlier this week, as noted at the time, and will continue to do so if the stock gets closer to $40, which I do think is quite possible given how strongly the Xbox One is selling into the Christmas season. I got my Xbox One set up last night and it’s pretty impressive. The latest Kinect system is very good at recognizing your moves and interacting with your voice commands. It’s better than Windows, that’s for sure.
Intel needs mobile traction and needs it sooner rather than later. If they don’t win some major tablet and/or smartphone supply business in the next six months or so, their window into that market gets smaller. It’s high time for Intel’s huge investments in this area over the last handful of years to start paying off for shareholders. Or else it’ll be time to move on.
And here’s today’s Trader’s Deep Thought.
According to Wikipedia, there are 182 “circulating currencies” in the world today. That list includes such currencies as the Cape Verdean escudo, the Mongolian tögrög, and Tongan paʻanga. But bitcoin is not yet anywhere on that list. The day that somebody adds bitcoin to this wikipedia list of circulating currencies will probably be a good day to sell some of your bitcoins. But in the meantime, it’s probably very bullish for the early bitcoin-ers that bitcoin is still far from de facto.
And on that note, here’s an article from FT called There’s nothing new under the sun, including Bitcoin, which also underscores just how early we still are in the virtual currency concept.
As a payments system, it has more potential, but only if its extreme volatility is overcome.
This is unlikely, however, because it is not pegged to anything nor is it collateralised. In reality, therefore, it is nothing other than an uncollateralised alternative to Paypal, in which transaction fees flow to anonymous Bitcoin miners rather than a publicly accountable company.
Paypal, just like Bitcoin, issues its own units. But the reason Paypal units don’t fluctuate wildly in value is because every unit is collateralised with the fiat money that’s put into the system. What you put into Paypal, you can consequently get out (much like any money market fund).
Do you not think that PayPal and the concept of trading dollars over their network had to reach critical mass before it could go mainstream and work like it does today? Do you not think that anybody who bought into Paypal back in its infancy made huge money as it did eventually hit critical mass and go mainstream?
And finally, this whole article seems like something out of a bad Ayn Rand novel where the analysts’ logic is completely upside down. The argument that Paypal units of currency don’t fluctuate because they are collaterilised with fiat currency is crazy. Fiat currencies fluctuate wildly.