Bold Profits Daily
November 29, 2019
Paul Mampilly: It’s Paul on the Iancast again. I’m hijacking this permanently.
Ian Dyer: Fine with me. We have good discussions.
Paul: With Market Talk I’m always trying to keep it tight down to three to five minutes. I have a lot of competition between Hudson and Amber. On this one, we’re going to do it long. How about that?
Ian: Sounds good.
Paul: Let’s start with dramatic news. You and I never sleep. I know you were up watching Bitcoin hit $6,500.
Ian: The whole time, yes. It bounced. The Bakkt futures we talked about last week, the expiration date came into play there. Bitcoin fell to below $7,000, then it bounced and went a little lower.
Again, around these expiration dates in the futures, all these new Bitcoins are being sent out from the actual futures company to all the investors. It creates an immediate supply that can have an effect on price.
Paul: Long term, I don’t know anybody who would ever want to be short those futures. You’d have to deliver something of a fixed quantity. I remember seeing analysis that something like 30-40% of Bitcoin are being HODLed. Hold on for dear life, that’s what HODL means.
The crypto world has its own language. We have HODL. We have FUD.
Ian: That’s fear, uncertainty and doubt, right?
Paul: Time to lambo for time to move. So 40% of all Bitcoin approximately is being HODLed. I read analysis on The Block, which is a website where they do crypto analysis, that hedge funds are short Bitcoin. This sounds crazy to me.
Ian: Me too. There’s a lot of questions around it. When you look at all these hedge fund managers that are into traditional investments like 60% stock and 40% bonds. Bitcoin doesn’t fit anywhere in there and they don’t know what to do with it. They don’t’ think it will ever overtake gold as a safe haven asset.
There’s a lot of naysayers out there still which is surprising considering it’s survived for 10 years now — almost 11 — and it started out as a fraction of a penny and has grown into a $150 billion asset class all on its own with no promotion other than word of mouth. It’s amazing what it has done so far. It’s an alternative currency.
Paul: Exactly. Both Ian and I are on the record of seeing Bitcoin at much higher numbers. Ian has a $50,000 by end of 2020. Is that right?
Ian: Yes, $50,000 next year and somewhere around $100,000 in 2021.
Paul: I think that’s conservative. I think we might hit $100,000 maybe even by the end of 2020. Here’s why. To me, Bitcoin is the first exponential asset. It runs off a digital mechanism rather than a lineal mechanism which is the stock market, the bond market. In other words, it requires human intervention.
If you think about gold, you have to go dig it out of the ground. There’s a whole process. Bitcoin is completely digital. There’s no physical element to it. It can exponentially grow and it’s already done that. This is why it has so much skepticism because there’s never been an exponential asset in history — this is asset number one. It’s going to be the most valuable.
Ian: There’s never been something like these halving events in any asset before. When the supply is limited by this much on one specific day, that day has a lot of say in the future of Bitcoin. We’ve seen that because after the past few halving events, there’s a gigantic rally by thousands of percent after the supply is cut.
Paul: I went back and modeled the Litecoin halving event to Bitcoin. For sure, it’s setting up to be a minimum of $25,000 to $30,000 the way it models. Most of the people who believe in Bitcoin largely never bat an eye at the volatility. It’s the disbelievers who come to really give us a lot of grief about it.
Ian and I believe in Bitcoin. We think Bitcoin is going to the moon. Everyone can make their own judgment. There is that one indicator that we both track. We should tell people about it.
Ian: A company called Grayscale has their own Bitcoin trust. They own a lot of Bitcoin and sell it as a fraction on the stock market. You can buy shares of the trust backed by Bitcoin. It’s a way of buying Bitcoin on the stock market, which is really interesting and not a lot of people know it exists.
We’ve seen all these headlines and rumors of a Bitcoin ETF, but there already is one and it doesn’t get that much press. It gives us a good indicator because when there’s a lot of bullish or bearish sentiment on Bitcoin you will see the premium of this ETF start to go up or down. Right now it’s trading about 27% above the price of Bitcoin.
The stock market is giving Bitcoin a premium even though it fell 50% in just a few months. That’s a really bullish indicator to me. It’s been as low as 10% and then it bounced from there. Now, like I said, it’s up almost 30% and people are paying a lot more for Bitcoin in the stock market because as of right now more people have stock accounts than crypto accounts.
Paul: It’s a pain to get a crypto account. I have a coin-based account and you probably have one as well, but most people don’t want to deal with that. I can tell you from tracking the Grayscale Bitcoin Trust, at the peak in 2017 the premium was something like 130-140%.
Ian: It was more than double.
Paul: At the low about this time last year I believe the premium was something like 3-4%. Right now it’s nowhere near as pessimistic as it was back then so there’s no reason to expect the premium to be as low. I don’t believe it has traded at a discount any time recently.
All signs point to Bitcoin going higher sooner rather than later. I feel like we can leave that one right there and move to the next one. I think we should name the Iancast, “Tesla, Bitcoin and Pot.”
Ian: That’s what we talk about. It’s the fastest growing things out there.
Paul: It’s also what most millennials like to trade and are invested in. When I did a Tesla, Bitcoin and pot video for my Tuesday Bold Profits, I got 30 comments. I don’t think I’ve ever received 30 comments on anything before. That’s where people are at.
So let’s deal with Tesla. Cybertruck.
Ian: Yea. Cybertruck. Just to start off, Tesla has never had an advertisement before. They’ve never spent on marketing. It’s crazy the publicity this stuff is getting. Literally everybody was talking about the Cybertruck over the weekend. We both pre-ordered one.
I personally love it. I know a lot of people are really skeptical of the design. I think it’s going to grow on people. It’s a steel truck that’s supposedly bulletproof, although the window did break during the promo.
If you throw a steel ball at any other car window it’s going to go right through the car window. Bulletproof glass breaks. It doesn’t shatter but it breaks like that.
Paul: I follow Elon’s tweets. It turns out, when they hit the sledgehammer against the Cybertruck it cracked the window. That’s why when they threw the ball, it shattered the window. Elon said what they should have done is first throw the ball and then hit the Cybertruck with a sledgehammer.
Then the demo would have worked out fine. But, you know, that’s how it is in life. I think they got $100 million worth of free publicity as a result of the windows breaking because everybody felt like they had to show it.
Ian: Yes. And they have more than 200,000 orders already in the first few days for this truck.
Paul: I feel like the truck makers depend on trucks and SUVs. Between the Model Y coming out and now with this, it’s really time. Those companies are going to struggle. Maybe some of the others will end up being a competitor, but for now there’s no competition of any kind for Tesla.
Ian: It even blows the gas-powered pickup trucks out of the water. I drive a pretty good truck and the Tesla can tow more, carry more, has a bigger truck bed and it faster. It’s a super powerful truck. I’ve heard a lot of people say it doesn’t appeal to the kind of market that drives pickup trucks.
They want more power. What doesn’t appeal? I guess the design? I think it will grow on people and I don’t see it as a reason not to buy it.
Paul: My reaction was pretty much what everyone else’s was. I didn’t stay up for the launch, but I woke up and looked at it and then I thought, “Whoa, that’s different.” Then about a minute later I thought, “I really like it.” Then five minutes later I thought, “I need to order one.”
Ian: Same here. I woke up and saw it and thought, “That’s weird. That’s actually what it looks like?” But then it grew on me. It’s going to take time. It’s what everyone imagined future cars would look like 20 years ago and now it’s finally here. I think it’s going to grow on people. It’s kind of iconic.
Paul: I’m watching the reaction on Twitter and people are having a slightly slower version of what we went through. It came out and now they think it’s kind of cool. I think this might be as fast selling as the Model 3. People say it’s only a $100 deposit and it doesn’t mean anything. But 200,000 is a lot of people.
Ian: Even if 90% of them cancel that’s more than $1 billion they’re getting from this already.
Paul: You looked this up before we got on. What’s the short position in Tesla?
Ian: It’s down. It was just 25% a few weeks ago. It’s down to 16% now.
Paul: I have to tell you, in my entire 25 years of being on Wall Street I have never known a company as large as Tesla carry such a large short position. This is insane.
Ian: They’re different. Different doesn’t appeal on Wall Street. Everyone wants to think the same way, be safe, not get fired for liking some company that everyone else hates.
Paul: They talk about Tesla stock owners and car owners being a cult, but the people who hate Tesla are also a cult.
Ian: Pretty much. They do have a lot of haters — millions.
Paul: They do. I always keep my Sentry Mode on when I drive my car because I don’t want to run across someone who wants to do something to my car. We like Tesla at Bold Profits. You can also see we had a Tesla at our last franchise meeting and it was a super big hit. Amber gunned it and she loved it. We’re trying to persuade everyone to get one.
We’ve done Bitcoin, we’ve done Tesla, what about pot? I was on last week and the stocks all sold off. Then, boom.
Ian: They’re back. It’s going to be a ride, for sure. That’s how bottoms are. It goes up and down fast. Some of these stocks in the pot sector doubled from their bottom and went up 100% in a couple days. You don’t see that when there’s not some big buyer looming in the background.
There’s going to be buying in these stocks. They are bottoming out right now and they’re going to come back up. It’s going to be great. The market is so bearish on these stocks right now because they’ve gone down so much for months. It’s the classic selloff we’ve seen where the end is the worst part. It’s like that with anything in the stock market.
Paul: This is so true, Ian. You are absolutely right. Most people — I’m included in this, I’ve never had perfect timing — start buying probably a month too early. Then they underestimate how much that last drop is going to be. That’s where they get shaken out and they sell.
It’s also where they get emotionally blown out. They are not going to come back. Then they end up missing it.
Ian: They are the ones who push it up at the end toward the bubble phase.
Paul: That’s right. Then they come at the end and signal the very top. I’m going to guess just by the sharpness of the move in the ETF MJ, Canopy, Cronos and Aurora, that there’s a combination of short covering as well as actual long buying going on.
Ian: Yes. Some of these went up 100% in a couple days and a lot of them went up at least 40% in the first initial bounce.
Paul: In my experience, when you have the sharp, off-the-bottom jump of 40-50% it means there’s actually a big buyer. A strong hands buyer that is going to own and is signaling they are going to buy more. This is why market makers keep lifting the price up to find sellers who are willing to sell.
In my experience that’s a good sign. We’re bullish on pot and we have it across a ton of our services. Did you end up putting on that trade for the pot company?
Ian: We did. In Rebound Profit Trader we have a pot trade. We’re probably going to do another one very soon. We’re bullish on that. In Rebound Profit Trader the goal is to get stocks at the bottom and buy call options on them, which go up faster than the stock. You can make hundreds of percent in just a few days by doing that if you time it right.
Here at the bottom of the pot crash we think it’s a really good time to buy calls on these beaten down pot companies.
Paul: We were chatting before on Slack and you said we had eight 60% winners in Rebound Profit Trader? I forget the numbers.
Ian: We’ve had 10 winners in the past month.
Paul: 40%, 60%, something in that range?
Ian: Yes, a lot of them are more than 40%. Biotech has been very strong. We just closed our fourth biotech gain of more than 50% — all four have come within the past week. It’s been a good run. Biotech is looking like a good place to be too.
In our other options service — Rapid Profit Trader — we just closed a biotech gain of about 45%. We only held it for three days. You can make money really fast when you’re in the right place in the market.
Paul: They say biotech is the poor man’s lottery. It’s been true. I have traded a ton of biotech in my life because you can have incredible, fast gains. You put options on top of that and we’re talking about a 12-engine rocket that can zoom up instantly. 45% in three days is just wow.
If you’re interested in any of Ian’s services, he runs two phenomenal options services: Rebound Profit Trader and Rapid Profit Trader. They have slightly different strategies but they have a common goal to make you money really fast. Check into the description below.
A little market update. What are we seeing?
Ian: We’re recording this Monday. Today the market is making all-time highs. I saw the ETF we track for biotech — XBI — is up 4% today. Biotech is still moving higher. S&P 500 is making all-time highs. The Russell 2000, which is the small- and mid-cap stocks is breaking out. It’s at a 52-week high as well.
It’s looking really good right now. It’s looking really good to close the year out.
Paul: Remember, the way we look at the world 52-week highs are important because it shows confidence, it shows people are pushing money in and they’re willing to pay higher prices for it.
If you like the content you are seeing here on the Iancast, subscribe to the channel, give this video a thumbs up, share it with your friends and comment below on what you’ve been experiencing during this bull market. You can also follow me on Twitter @MampillyGuru.
What’s your Twitter, Ian?
Ian: It’s @IanDyerGuru. Give me a follow.
Paul: That’s what we have for this Iancast for today. Ian, we’ll have another one next week.
Ian: Yeah. See everyone next week. Have a great weekend and hope you had a good Thanksgiving.
Paul: Same here. This is Paul saying bye.
Today, I’m giving one away free!
