31 May 2017: Bitcoin

There is investing and there is speculation. If you want to experience what speculation looks like, take a look at the graph below. It depicts the rise and rise of the price of bitcoin since its start in 2009. For those who are unfamiliar with bitcoin: it is the most popular cryptocurrency. A cryptocurrency is a digital payment system that is not run by a government or central bank, but (basically) by the public through the use of their computers. Transactions are not verified by a bank but by a network of computers. Bitcoin is an example of a so-called blockchain technology. There is not one trusted party that verifies transactions: this is done by using a decentralized digital registrar called the blockchain. It is expected that blockchain technology will not only be capable of disrupting traditional banking, but also (among others) legal and notarial practices, car rental, insurance, healthcare and… stock trading. But when, how and to what extent, is unclear at the moment. And that makes bitcoin perfect for speculation. We can be sure, however, that we will be confronted with a burst of the bitcoin bubble which makes the dotcom crisis of 2000 look like a trifle.

 

white-chapel-logo-smallU.S. stocks closed moderately lower Tuesday as energy shares weighed on Wall Street. The S&P 500 lost 0.12% and the Dow suffered double that loss: -0.24%. The NASDAQ posted the smallest loss for the day: -0.11%. Volatility was on the rise, after a long period of declines: the VIX ended almost 6% higher. UVXY ETFs did not profit yet: they closed almost 1.5% lower. XIV ETNs closed at exactly $80.00 (+0.6%).
Danny Daredevil was the only victim of the day among our models: his RSS dropped to 388%. Adventurous Anny is holding cash. Her RSS remained at 39%. Solid Suzy and Lazy Larry were still not able to take the 20% barrier. They closed at an RSS of 19.98%.
None of our models gave a trading signal at the end of yesterday’s session.

 

Model Holds Start date

RSS

YTD

QTD

AAR

Danny Daredevil UVXY 1 January 2016

388.31%

21.13%

4.17%

207%

Adventurous Anny Cash 6 March 2017

39.23%

39.23%

14.33%

307%

Solid Suzy XIV 6 March 2017

19.98%

19.98%

9.54%

117%

Lazy Larry
XIV 6 March 2017

19.98%

19.98%

9.54%

117%

RSS = Return Since Start | YTD = Year-To-Date | QTD = Quarter-To-Date | AAR = Average Annual Return

 

The last few days, Tim has taken care of a stray dove. The bird appeared to be more dead than alive when it was first discovered. Tim feared for its life. The dove breathed heavily and kept tumbling. It refused to eat or drink and Tim expected to find the bird dead the next morning. But the bird food that was purchased at a local pet shop (“‘Ello, I wish to buy some bird food.”) did its magic. Little by little, the dove showed more life.
The dove is ringed and an internet search of the code that is printed on the ring made it clear to Tim that it is a one-year-old Belgian dove, which is registered at the website of the Koninklijke Belgische Duivenliefhebbersbond (Royal Belgian Association of Pigeon Fanciers). Tim contacted the owner of the dove, but he seemed not overly enthusiastic: “Just give the bird some water and food and it will be alright”.
The bird looks fully recovered, but it is not showing a single sign of initiative to take to the skies. While it lasts, Tim is enjoying the site of the grey bird. He is especially impressed by the colors of green, blue and purple on the neck of the bird. The reflection of these colors in the sunlight can easily compete with the colors in the tail of a peacock.