Bitcoin vs Gold — Deathmatch 2017

Tyler here with this week’s Macro Musings.

Just a heads up, we released the newest issue of our Macro Intelligence Report (MIR) last night. It’s all about an asset the overall market is getting completely wrong — oil. Within the 40+ pages of this report we go into depth on exactly why the market is wrong and how you can play the coming oil bull market. We’ve got a basket of equities plus an options play on the commodity itself that sets us up quite nicely to take advantage of the trend. With our 60-day money-back guarantee, there’s no risk for you to come along for the ride. Don’t miss your chance. Subscribe to the MIR by clicking here.


Fallible —

In case you missed it, we just launched our brand new YouTube channel this week. We call it Fallibile.

With this channel you can expect quick videos that’ll entertain you while maybe even teaching you a thing or two. We’ll cover some Macro Ops content, but we’ll also be moving into more basic trading concepts to help round out the education we provide.

We won’t be sending out emails for every new video, so be sure to subscribe to the channel and hit the bell for live notifications if you want to know when a new video is published.

You can enjoy AK’s pretty face in our first video below about Bitcoin. So far it’s been very popular around the web. Just click the image to watch!


Our Recent Articles —

The Coming Bull Market In Oil — A warm up for our latest MIR issue…


Articles I’m Reading —

All of the World’s Money and Markets in One Visualization

This is a fantastic infographic that allows us to visualize the market cap of assets relative to each other. I found it while searching for the total market cap of all known gold in the world which is about 7.7 trillion dollars.

If bitcoin were to become the new “digital gold” of the future and demand the same market cap, it would have to trade at a price 25 times the current price of $16,500 per BTC. This is the logic used by the crazy guys on CNBC that are making these “$500,000 a coin” predictions.


Video I’m Watching —

Shout out to one of our Collective members (thanks Aaron!) for finding this documentary on youtube:

The Ascent of Money – Dreams of Avarice

It’s a deep dive narrated by Niall Ferguson on the history of money, credit, and our ever evolving financial system. Some parts of it are already outdated but nevertheless it’s a good brush up on financial history.


Podcast I’m Listening To —

This week I hit up Masters In Business again hosted by Barry Ritholtz. His latest interview with macro legend Felix Zulauf is outstanding.  Barry knows how to ask the right questions and tease out the most important things from his guests and he doesn’t fail here.

At about 30 minutes in Felix starts riffing on China and how he thinks they will address their financial excess in 2018-2019. If you are short on time I recommend fast forwarding to this point and listening to the sound bite. It’s a major theme that we will be tracking in the later half of next year.


Chart(s) I’m looking At —

With bitcoin mania in full force I’ve been looking at a lot of crypto related charts. The chart below by CME group illustrates how transaction costs for Bitcoin skyrocket during mania phases of the market. Typically when costs get to these levels we get a temporary pullback in price.

I wouldn’t ever think about shorting bitcoin but it’s interesting food for thought if you are a long holder looking for a reason to take some exposure off the table.

The article I grabbed this chart out of is well worth the read too. It looks at bitcoin from the perspective of a commodity and explains how supply inelasticity creates bitcoin’s extreme volatility.


Trade(s) I’m Looking At —

I’ve been waiting for a break lower in gold for a long time now and it looks like Christmas came early for me!

In our September MIR we talked about how cheap gold options were and decided to pick some up right when N. Korea fears were at max levels.

Those straddles are finally starting to pay out on the put side and we have a lot of time left before expiry. My prediction is that gold will break $1,000 next year as the rising interest rate trend builds momentum. High real rates are not good for gold.


Quote I’m pondering —

When two extreme opinions meet, the truth lies generally somewhere in the middle. Without exposure to the other side, you will naturally drift toward the extremes and away from the the truth of the matter. ~ Annie Duke

Well said Annie. As traders this is especially important. It’s so easy to get caught up in a narrative and fall for it hook line and sinker. I’m sure they’re are a ton of gold bugs out there regretting their refusal to red team their analysis.

That’s all I got for this week!  

If you’re not already, be sure to follow us on Twitter: @MacroOps. We post our mindless drivel there daily.

Lastly, here’s a link to our latest global macro research. And here’s another to our macro trading strategy and education.

Have a great weekend.

Your Macro Operator,

Tyler

 

 

Why Bitcoin Is A Fake Currency

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Brandon Beylo

Value Investor

Brandon has been a professional investor focusing on value for over 13 years, spending his time in small to micro-cap companies, spin-offs, SPACs, and deep value liquidation situations. Over time, he’s developed a deeper understanding for what deep-value investing actually means, and refined his philosophy to include any business trading at a wild discount to what he thinks its worth in 3-5 years.

Brandon has a tenacious passion for investing, broad-based learning, and business. He previously worked for several leading investment firms before joining the team at Macro Ops. He lives by the famous Munger mantra of trying to get a little smarter each day.

AK

Investing & Personal Finance

AK is the founder of Macro Ops and the host of Fallible.

He started out in corporate economics for a Fortune 50 company before moving to a long/short equity investment firm.

With Macro Ops focused primarily on institutional clients, AK moved to servicing new investors just starting their journey. He takes the professional research and education produced at Macro Ops and breaks it down for beginners. The goal is to help clients find the best solution for their investing needs through effective education.

Tyler Kling

Volatility & Options Trader

Former trade desk manager at $100+ million family office where he oversaw multiple traders and helped develop cutting edge quantitative strategies in the derivatives market.

He worked as a consultant to the family office’s in-house fund of funds in the areas of portfolio manager evaluation and capital allocation.

Certified in Quantitative Finance from the Fitch Learning Center in London, England where he studied under famous quants such as Paul Wilmott.

Alex Barrow

Macro Trader

Founder and head macro trader at Macro Ops. Alex joined the US Marine Corps on his 18th birthday just one month after the 9/11 terrorist attacks. He subsequently spent a decade in the military. Serving in various capacities from scout sniper to interrogator and counterintelligence specialist. Following his military service, he worked as a contract intelligence professional for a number of US agencies (from the DIA to FBI) with a focus on counterintelligence and terrorist financing. He also spent time consulting for a tech company that specialized in building analytic software for finance and intelligence analysis.

After leaving the field of intelligence he went to work at a global macro hedge fund. He’s been professionally involved in markets since 2005, has consulted with a number of the leading names in the hedge fund space, and now manages his own family office while running Macro Ops. He’s published over 300 white papers on complex financial and macroeconomic topics, writes regularly about investment/market trends, and frequently speaks at conferences on trading and investing.

Macro Ops is a market research firm geared toward professional and experienced retail traders and investors. Macro Ops’ research has been featured in Forbes, Marketwatch, Business Insider, and Real Vision as well as a number of other leading publications.

You can find out more about Alex on his LinkedIn account here and also find him on Twitter where he frequently shares his market research.