The Other Side Of The Bubble: Analysis For Stocks, Crypto And Bonds

I had a very insightful and fun trip to NYC last week. The crypto regulations event that I chaired was full of people who want clarity from the various regulating bodies. It seems clear to me, at least at this point, that the US is definitely, as usual, in the lead on this, mostly because of the fact that it is here in the US where security laws are mostly enforced — and while the banks and giant corporations definitely do their job to erode the rule of law being applied equally to everybody here, the US is still the cleanest shirt in the fiat laundry. More clarity will make more institutions use more cryptocurrency in coming years. That will be good for crypto in general, but we still have about 18,000 silly, stupid and/or fraudulent cryptocurrencies that need to be washed out of the system.

Meanwhile, the transparency inherent in bitcoin and other cryptos has made it so the US and other regulators are now able to track criminal payment flow through the blockchain. Bitcoin is increasingly becoming the one crypto that no criminal wants to use. That’s good for bitcoin.

The next day, I stopped by the show of my old pal, Charles Payne, on Fox Business and talked about cryptocurrencies too. He asked me if the government should go after those 18,000 silly, stupid and/or fraudulent cryptocurrencies of if they should let the free market deal with it. My answer is that the government most definitely should go after the obvious frauds out there in the crypto market but that they government probably won’t do much until most of those silly, stupid and/or fraudulent cryptos have already crashed 90-100%, at which point the SEC et al will ride in on their white horses and declare that they are here to save the day and to clarify everything. Sigh. Bitcoin, Helium, Ether and my own SKTLs space-debris cleaning cryptocurrency (which you can get for free by signing up now on SKTLs.com for the upcoming airdrop on Space Day next month) are the only cryptos that I’m excited about for the mid-term to long-term right now.

I’ll try to get a link to the video posted for you guys.

Then there’s this whole stock market and economy thingee that are going a bit haywire right now too. I found few outright bears in NYC and quite a few people, both Wall Street people as well as blue collar workers, who are still long, strong and are quite sure that the good times/new all-time highs are just around the corner again.

The one thing I am quite certain about is that what I had been calling the Great Bubble-Blowing Bull Market from 2009 died at some point in 2021 and early 2022. As I’ve been saying for months, we are now on the other side of the Great Bubble-Blowing Bull Market and it ain’t coming back anytime soon. I’m not sure that means that most stocks have to drop another chunk from there, but I do expect that it will remain very hard for bulls in general to make money. We have to be in the right stocks with improving fundamentals at companies that can take market share in growing/new markets.

After two or three decades or more of being tailwinds for the stock market, inflation, interest rates, liquidity injections and stealth monetary/fiscal stimulus for giant corporations are no longer working in the markets’ favor. Rates have continued to rocket higher as Treasuries have tanked, taking the costs of money for the US government itself to levels we haven’t seen in…ah crap, just four years ago? The good news is that the incredibly swift mover higher in rates since the beginning of 2022 is likely gone too far too fast and there should be some reversion to the mean here. As I type this, I just saw a headline on CNBC: “Muni Bond Bust”. I’m taking the other side of this panicky Treasury action by buying a little bit of TLT and TLT call options (about 5% or more out-of-the-money, dated out to the next month or two). Not making a big bet on this, but I do think there’s maybe 10% or more potential upside in the TLT for the near-term. I’ll be out of this TLT trade win or lose sometime in early summer.

Space stocks remain a key sector for the long-term as the costs for launching equipment and people to space keep dropping as new technologies keep being developed to Revolutionize how we live and work on Earth, but that doesn’t mean they are going to put in an immediate bottom either.

My five favorite longs right now are, in alphabetical order: FB, INTC, PYPL, TLT, W. Also, I’d note that I’m no longer short ARKK.

This week, I’ll be publishing several Latest Positions updates going through each of our positions with new analysis and ratings.

Be careful out there, but don’t be scared. We have a playbook for this and we will get through this cycle ready to make huge gains on the other side. When it comes.