GM, this is the Milk Road where we like to do 2 things when times are rough: laugh or scream. Today, we wanna give you a choice in doing the same.
OPTION 1: LAUGH
We don’t know how to use TikTok (too old) but apparently, it’s where the action is at.
So we hired Billy “The Kid” and gave him our TikTok password to go start making videos. He did not disappoint….Smash the follow to get MORE!!
The crypto world needs more laughs right now. Go watch it here!
OPTION 2: SCREAM
Lost 80% of your crypto net worth?
Can’t afford therapy?
Don’t worry. The Milk Road has your back. We created a new form of therapy. Scream therapy.
You can join our telegram group and just scream with an audio message. Join the group here!
Now let's get into the good stuff.
Estimated read time: 3 minutes & 32 seconds
WHAT A BILLIONAIRE IS SAYING ABOUT THE MARKETS
Stanley Druckenmiller is:
- A legendary investor
- The guy who managed money for George Soros
- A billionaire (net worth of ~$7b)
- “Self-Made. He has a "self-made" score of 8, according to Forbes. No idea what that means, but Respekt.
And he recently had an interview at the Sohn Conference.
I’ve summarized the top takeaways to save you some grey hairs.
On doing nothing
Stanley says although he looks at his screen every day, he isn't actually doing much.
He's lived through enough bear markets and says that if you get aggressive "you can get your head ripped off in rallies."
Advice to young investors
He encourages them to learn all the asset categories and how they integrate. Not easy… but fundamentals are fundamental…
His number one advice to young people? Do not invest in the present.
The present is not what moves stock prices. Change over time is what moves them. He says to try and envision a different world a year and a half from now.
Tracking your hot vs. cold streak
It’s not whether you’re right or wrong. It’s how much you make when you’re right and how much you lose when you're wrong.
As an investor, you have to believe in streaks. You'll have hot and cold ones.
Stanley says his number one job is to know whether he's on a hot or cold streak, and when he's hot he turns the dial way up.
"You gotta make hay while you're hot and when you're cold the last thing you should do is to try and make big bets to get back to even. Instead, you should tone yourself down."
Bear Market and Recession Factors
Stanley says we're ~6 months into this bear market. The odds of it ending soon are very low. Bear markets don’t just stop after 6 months…especially after a historically long (12+yr) bull run and massive money printing/asset inflation.
He thinks we're headed towards a recession in 2023. He clarifies that this is just his guess, not a fact. But he does point toward one piece of history:
“Once inflation has got above 5%…it’s never been tamed without a recession." So he says if you’re predicting a "soft landing", you’re going against decades of history.
Bitcoin vs. Gold
The buyers for Bitcoin vs. Gold are very different.
Bitcoin is the same type of investor who invests in the Nasdaq 100. Tech companies. Looking for growth. The market has really hurt growth stocks, so those investors are trying to de-risk, and so they slow down on Bitcoin.
Gold investors are “curmudgeon” types. They wait for these types of economic disasters. During a bear market, gold will outperform. During a bull market, Bitcoin will outperform.
Stanley wraps up with this one message: It's very important to be open-minded – the ending is not predictable. 2008 was a no-brainer. This isn’t.
THE LATEST IN CRYPTO
The Milk Road is like your local weather guy. But instead of rain, we talk about magical digital money.
The weather this week was rainy, with a high chance of losing money. (see the milk road weather report below)
Monday: Celsius, the crypto exchange, went ice cold. Almost hitting 0.
They were nearly insolvent, putting hundreds of millions of users' funds at risk.
Update - They are playing an insane back-and-forth game trying not to lose more money. Analysts are watching the blockchain like it's one of those crazy table tennis matches.
They're in a bit better position than a few days ago, but still need the Bitcoin price to stay above $14k to avoid getting liquidated.
Tuesday: We saw a bunch of layoffs at big crypto companies like Coinbase and Crypto.com.
The big storm was 3 Arrows Capital (a multibillion-dollar hedge fund) facing liquidations.
Update - There is none. It’s been 37 hours since they tweeted they would communicate "soon", but so far, nothing.
Wednesday: The Fed announced interest rates going up 0.75%. The biggest interest rate increase since 1994.
We're gonna go ahead and call this Hurricane Powell.
To be honest with you, I never once thought about the Fed up until about 6 months ago. Since then, I’ve been doing my homework and learning the ins and outs.
Here’s what we learned from yesterday's announcements:
1. Fed raises rates by 75 bps for the first time since 1994
2. Inflation is getting worse. Sees inflation of 5.2% at end of 2022
3. Expect ~3.5% interest rate by year-end
Let’s see what the rest of the week holds!
TODAY'S NEWSLETTER IS BROUGHT TO YOU BY FRANSHARES
What do Lebron James, Robert De Niro, Rick Ross, and Phil Mickelson have in common?
They all invest in franchises.
Instead of shelling out a kidney to purchase your own franchise, like Lebron. Franshares gives you the ability to invest courtside with a tub of popcorn.
Some of the high points:
- 100% passive income. FranShares takes care of all management
- Each offering is diversified across industries and geographies
- A unique opportunity to hedge against inflation with a unique real asset
The Franshares team only chooses franchises that have a long track record of success so you know you’re only investing in quality businesses.
As stocks are more wobbly than 57 year old couples at Margaritaville, franchises are the new frontier.
A CRYPTO COMPANY CAUGHT PHOTOSHOPPING
Yesterday we talked about one of the companies that are weathering alright through the crypto storm: Binance.
While others are adding to the sea of Layoffs, Binance is looking to hire 2,000 people. To announce the open positions, CZ (the CEO) tweeted this.
Here’s the funny part: Look at the photo he tweeted. Doesn’t it look like a stock photo?
Hang on…quick google search…
HAHA. They did! They photoshopped a stock photo.
I love it. In fact. I did a quick little photoshop of my own…
The 3 best friends that anyone could have.
And thanks Cobie for pointing this out!
That's all for today folks, see ya tomorrow!
What'd you think of today's email?
DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
Get smarter about crypto
Join 250,000+ subscribers and get our 5 min daily newsletter on what matters in crypto.