Two Simple Economic Tales Driving Markets Right Now
Joe Hill|April 20, 2024
It’s here. The long-awaited fourth Bitcoin halving has arrived.
And now… we wait.
How high will Bitcoin go over the coming weeks and months? It’s anyone’s guess.
But history has shown, again and again (and again), that the 12- to 18-month period following Bitcoin halvings leads to tremendous gains.
You know that, though.
At least you do if you’ve been keeping up with Robert’s commentary in Total Wealth.
On Tuesday, he declared that the world’s most predictable financial market is – believe it or not – crypto.
“People who bought at the beginning of these bull markets made huge money,” he wrote. “People who bought at the end lost big. But people who bought right after a Bitcoin halving always made money.”
At its core, when we talk about halvings we’re really just talking about simple supply vs. demand.
When there’s less of something… the price tends to go up. It’s an economic tale as old as time.
And it’s as easy to understand as why – switching over to stocks – investors were none-too-pleased this week when the Fed threatened to keep borrowing costs higher for longer.
After all, when it costs more to expand your business, that’s surely going to hamper your ability to quickly grow profits.
And wouldn’t you know it… That’s something about which Wall Street cares very deeply.
Hence Shah’s note of warning at the start of the week…
“The markets are a little nervous… there’s caution out there,” he said. “Be cautious yourselves.”
He furthered the theme on Wednesday with a Buy This, Not That dedicated to recent trouble among bank stocks.
Until now, the sector had been a pillar of strength for investors. But like so much having to do with the markets lately… it proves you should never get too comfortable.
Or, even more importantly, it proves that you should stick to the metrics that matter most.
Like the ones Alpesh uses to evaluate stocks like this global shipper with a 9% yield…
And the little-known metric that Shah considers to be the true measure of profitability.
He explained why it’s so effective in yesterday’s Total Wealth… and how all investors can (and should) use it to make informed decisions about stocks they want to buy.
If you missed that piece, give it a read here.
Or you can keep scrolling. As always, we have links to everything we published this week below.
We’ll be back with more for you on Monday.
