Will Bitcoin Survive?

Dear Reader,

The Bank of International Settlements, the central bank of central banks, came out with a paper questioning the added value of cryptocurrencies.

Behind the scenes, there seems to be building a consensus to either regulate or ban cryptocurrencies. Global leading central banks and their respective governments seem reluctant to relinquish the power they have over money creation, even small portion of it.

However, governments need tax revenue and Bitcoin and other cryptocurrencies' ancillary business will provide just that and in large  amounts.

The battle will develop, but for now I am of the opinion that technology innovation will win out in the end.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Tesla, Elon Musk and Bitcoin. A Valuation of Narrative Assets

Dear Reader,

Elon Musk is often active on Twitter and in media commenting on Bitcoin's and other cryptocurrency prospects. His electric vehicle manufacturer Tesla is accepting payments in Bitcoin. Bitcoin's price recently crashed from above 50 000 USD to close to 30 000 USD.

How to value assets which have little revenue and no or small profits compared to their seemingly excessive current market valuation or capitalization?

Key is to imagine the size of the market correctly. Internet stocks with no revenue during the dot-com bubble were valued at stratospheric levels. Amazon had revenue, but back then it also seemed grossly overvalued. The internet, however, proved revolutionary, profoundly changed our world and the market size currently is estimated at 6 trillion USD. And Amazon is valued at 1.72 trillion USD currently.

Bitcoin is currently revolutionizing finance. And finance is the infrastructure of our world. The banking industry market size is estimated at 3 trillion USD by some analysts. And the blockchain technology backing Bitcoin could change many other sectors of the economy.

Narrative stocks' valuation hinges on correctly estimating the future potential of the market and choosing correctly the first mover advantage leaders there.

Tesla is a case in point. If it succeeds to monopolize the car industry with electric vehicles it can grow into part of its current valuation. If it is to fully substantiate the current pricing of its stock. Tesla has to open up and dominate other markets.

Bitcoin's market size, on the other hand, is huge. I would estimate the market size for which Bitcoin is competing is above 10 trillion USD and that is finance connected only.

A narrative stock's intrinsic value is based on the optionality of the market size and the management fluctuations of the respective company in its fight to dominate the market.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Palantir's Stock Potential

Dear Reader,

Palantir Technologies, the big data analytics technology company, is valued at 47.61 billion USD by public markets currently.

I estimate Palantir's market capitalization has the potential to reach 500 billion USD in the next 7 years.

Palantir is basically an artificial intelligence application company which uses statistics or machine learning as now the modern term is to build software that analyzes big data and draws conclusions for future actions.

Palantir is currently the leading global, if not the only, scalable artificial intelligence software product of decent size. If management continues executing the company founders' vision well as of late, Palantir market value could rise to staggering size.

Palantir has the edge and first mover advantage to ride the artificial intelligence revolution we are currently living through.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Tesla Value Drivers

Dear Reader,

Tesla Inc, the electric vehicle manufacturer, is currently worth 600.47 billion USD or more than all the leading top 10 automobile manufacturers in the world.

What are the value drivers that could substantiate such a valuation?

Firstly, it seems that investors forecast that Tesla could become  a quasi monopolist on the automobile market, or turn into oligopoly, at least, which will allow Tesla to raise prices, achieve much higher net profit margins that are typical for the car industry at present and thus substantiate its higher valuation.

Secondly, investors are may be thinking that Tesla will successfully break into other industries like solar energy production or battery production in which Tesla will again become the market leader.

Thirdly, investors are perhaps thinking that the hype around Tesla will create much higher demand for automobiles, that is Tesla's very existence will widen the car market.

All in all, all three assumptions could come to fruition, but with very low probability.

I estimate Tesla is worth around 120 billion USD. Tesla is a classic case of a narrative, story stock. One significant impediment to the story told is that the automobile market size is known and Tesla's current market capitalization is already excessively high.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

3M Company Valuation

Dear Reader,

3M Company, or simply 3M, the US based industrial, health care and consumer goods conglomerate, is valued at 111.07 billion USD on public markets.

I estimate that 3M's intrinsic value is 131 billion USD or 3M is around 20 % undervalued by investors currently.

3M has a quite high dividend yield of 3.09 %, net profit margin of regularly around 16 % which are both very attractive for institutional fund managers. In short, 3M has the proverbial moat or durable competitive advantage in the words of Warren Buffett. A problem is the low growth rate of 3M's revenue at around 1.5% a year and in recent years there have even been small single digits declines in revenue.

3M is trading at a Price/Earnings ratio of 19.56 which is high for slow growing industrial company, but due to 3M's business safety and high dividend this does not seem too excessive. 3M is actually quite similar to a government bond with its business diversification mix, stable net cash flows and low risk, but secure line of trade.

In short, I believe 3M is 20% undervalued, because more and more institutional investors will be attracted to staid, high-dividend yield, low risk, highly profitable businesses like 3M when the stock market bubble in technology stocks bursts, which I forecast could happen in the next 3 to 4 years on overvaluation and Federal Reserve raising interest rates levels scared off by rising inflation.

Even currently value stocks like 3M have been outperforming technology growth stocks. I forecast this trend to continue for the next 3 to 4 years.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Is Bitcoin Suitable as a Long-Term Investment?

Dear Reader,

Bitcoin especially, but also other cryptocurrencies have become a legitimate and popular investment vehicles for many private investors and institutions even.

How suitable is Bitcoin for a long-term investment, which I would define as an investment with a holding period of more than 2 years?

I think if one uses the buy and hold strategy for Bitcoin one has to be prepared to live through significant volatility or downside risk. Only recently, in the space of two months Bitcoin's price fell approximately 50 % from its recent peak.

In the long run, two years from now, however, Bitcoin prospects seem very bright. Bitcoin saves people time, effort and money by facilitating currency remittances, storing and increasing value and providing a unit of account for wealth. If governments do not outlaw Bitcoin due to some reason, Bitcoin's utility seems destined to make the cryptocurrency ubiquitous.

If one buys and holds Bitcoin for longer periods of time active risk management is key. Bitcoin is quite volatile. And yes, Bitcoin does hold intrinsic value and this value is due to the fact that it is used a means of payment and payments infrastructure.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Is Palantir Stock Currently Undervalued?

Dear Reader,

Palantir Technologies or simply Palantir, the big data analytics company, is valued at 46.62 billion USD currently.

In my opinion for the next 2 years Palantir is fairly valued.

In the long run, however, 5 to 10 years from now Palantir could be worth 300 billion USD or significantly more, barring an unexpected event, bad management decisions or government intervention.

So in the long run Palantir is undervalued.

Palantir's business is based on artificial intelligence and it essentially produces artificial intelligence algorithms, which is basically the future or information(technology) and thus the future of the world.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Is Bitcoin Currently Undervalued?

Dear Reader,

Bitcoin is currently trading approximately  at 35 900 USD according to various sources.

Yes, I think Bitcoin, the leading cryptocurrency, is undervalued. I forecast Bitcoin's price in USD could reach 100 000 USD in 5 years time, barring a globally coordinated effort of governments of the largest countries to outlaw Bitcoin. Much the same way, the G7 countries are trying to impose a minimum corporate tax of 15 % all over the world.

Although the above Black Swan event for Bitcoin is not impossible, I think global governments just have too much use from Bitcoin. Governments all over the world are heavily indebted due to the coronavirus pandemic induced economic crisis and they need the additional financial revenue the new business of Bitcoin provides.

What is more, Bitcoin saves people time, money and effort, so most likely people will continue to use, trade and invest in Bitcoins. The novelty of Bitcoin as a new asset class additionally provides for Bitcoin to further entrench itself into the global financial system.

I forecast Bitcoin's price could reach 70 000 USD three years from now and even surpass 100 000 USD 5 years from now.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Didi Chuxing IPO Valuation

Dear Reader,

DiDi Chuxing, or simply DiDi, the Chinese based ride-hailing mobility platform, has filed an IPO porspectus.

I estimate DiDi  is worth around 120 billion USD. 

DiDii made 21.633 billion USD in revenues in 2020, according to the table below from its IPO prospectus:

The following table presents our summary consolidated statements of comprehensive income (loss) for the periods indicated.

			For the Years Ended December 31,												For the Three Months Ended March 31,
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
			2018			2019			2020						2020			2021
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
			RMB			RMB			RMB			US$			RMB			RMB			US$
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
			(amounts in millions, except for share and per share data)
Summary Consolidated Statements of Comprehensive Income (Loss)
Revenues
China Mobility			133,207			147,940			133,645			20,398			18,945			39,235			5,988
International			411			1,975			2,333			356			767			804			123
Other Initiatives			1,670			4,871			5,758			879			760			2,124			324
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total revenues			135,288			154,786			141,736			21,633			20,472			42,163			6,435
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Costs and expenses
Cost of revenues			(127,842	)		(139,665	)		(125,824	)		(19,205	)		(17,354	)		(37,597	)		(5,738	)
Operations and support			(3,665	)		(4,078	)		(4,696	)		(717	)		(897	)		(2,149	)		(328	)
Sales and marketing			(7,604	)		(7,495	)		(11,136	)		(1,700	)		(1,769	)		(5,107	)		(779	)
Research and development			(4,378	)		(5,347	)		(6,317	)		(964	)		(1,478	)		(1,862	)		(284	)
General and administrative			(4,242	)		(6,214	)		(7,551	)		(1,152	)		(2,296	)		(2,102	)		(322	)
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total costs and expenses			(147,731	)		(162,799	)		(155,524	)		(23,738	)		(23,794	)		(48,817	)		(7,451	)
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Loss from operations			(12,443	)		(8,013	)		(13,788	)		(2,105	)		(3,322	)		(6,654	)		(1,016	)
Interest income			1,458			1,361			1,229			188			337			187			29
Interest expenses			(44	)		(70	)		(136	)		(21	)		(19	)		(61	)		(9	)
Investment income (loss), net			(817	)		(476	)		2,833			432			(462	)		12,361			1,887
Impairment loss for equity investments accounted for using cost method/Measurement Alternative			(2,541	)		(1,451	)		(1,022	)		(156	)		—			—			—
Loss from equity method investments, net			(768	)		(979	)		(1,058	)		(161	)		(195	)		(45	)		(7	)
Other income (loss), net			(337	)		(453	)		1,031			158			(490	)		(384	)		(59	)
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Income (loss) before income taxes			(15,492	)		(10,081	)		(10,911	)		(1,665	)		(4,151	)		5,404			825
Income tax benefits			513			348			303			46			179			79			12
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net income (loss)			(14,979	)		(9,733	)		(10,608	)		(1,619	)		(3,972	)		5,483			837
Less: Net loss attributable to non-controlling interest shareholders			(1	)		(5	)		(94	)		(14	)		(10	)		(2	)		(0	)
Net income (loss) attributable to Xiaoju Kuaizhi Inc.			(14,978	)		(9,728	)		(10,514	)		(1,605	)		(3,962	)		5,485			837
Accretion of convertible redeemable non-controlling interests to redemption value			—			—			(165	)		(25	)		(20	)		(90	)		(14	)
Deemed dividends to preferred shareholders upon repurchases of convertible preferred shares			(664	)		—			(1	)		—			—			—			—
Income allocation to participating preferred shares			—			—			—			—			—			(5,199	)		(793	)
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net income (loss) attributable to ordinary shareholders of Xiaoju Kuaizhi Inc.			(15,642	)		(9,728	)		(10,680	)		(1,630	)		(3,982	)		196			30
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​

DiDi's revenue for the first three months of 2021 grew briskly year on year, which shows the company is recovering from the coronavirus pandemic shock.

Uber and Lyft, the US based ride-hailing giants are trading at Price/Sales ratios on 2020 figures of 9 and 8 respectively which means that if DiDi goes public at 120 billion USD market capitalization, Didi would actually be relatively undervalued compared to Uber and Lyft.

Stopping a regular, non-taxi driver and paying him to take you somewhere or ride-hailing is actually at the moment a price dumping business with much lower prices than regular taxi licensed carriers. Apparently, the goal of Uber, Lyft and DiDi is to conquer the market, annihilate the competition by making them loose money and later when they have oligopoly power on the market they will raise prices like Ryanair, EasyJet and Airbnb have done.

And DiDi made 30 million USD of profit in the first quarter of 2021, even. All this is very well thought out. However, it depends on the both private and public investors providing money for the growth of currently a loss making business on an yearly basis like DiDi. As long as central banks keep supporting the economy by creating monetary reserves, or simply said printing money, to buy up mainly government and mortgage bonds, but also corporate bonds, the market will continue supporting money loosing businesses like Tesla, for example.

All in all, DiDi's intrinsic value is 120 billion USD at the moment. Ride-hailing is here to stay as it saves people money by deregulating the transporting industry. Regulation destroys investment and provides for inefficiencies. DiDi, however, must become profitable to substantiate a valuation above 50 billion USD in the long run.

Will DiDi become profitable. Yes, I believe DiDi could achieve a net profit margin of around 5% to 10% in the long run.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich