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No.
As far as I am concerned, we are witnessing a bear market rally. In tech stocks is the greatest magnitude.
I think the Nasdaq Composite could go down to 8000 points or lower or circa 50 % fall from its peak in November 2021.
The Federal Reserve will go on raising rates and this will stifle the capital technology companies need and make other sector like commodities and industrials more attractive.
Even now, technology stocks are grossly overvalued, I estimate.
Money has three main characteristics: 1) Sore of Value, 2) Unit of Account, 3) Means of exchange.
Bitcoin fulfils only partially the three main features of money.
Store of value does not function 100 % for Bitcoin, because of Bitcoin's price volatility or risk.
Stable-coins are a partial soltution of this problem.
In my opinion, what is needed for Bitcoin's price risk to subside is for both the market authorities and cryptocurrencies market participants in some sort of way to help, nudge the cryptocurrency community to self police better and to build more stable crypto exchanges.
Once the Bitcoin and cryptocurrency infrastructure is in place, more and more institutional investors like hedge funds, asset managers and even pension funds and endowments will enter the cryptocurrencies market.
This will take more time than in the past with stocks for example, since the main advantage of the Bitcoin and cryptocurrencies market is that it is free, unregulated and otherwise untempered by governments and regulators.
GitLab, the online code repository akin to GitHub is the current rage in software development.
GitLab's strategy seems simple: using open source code base to attract the most forward looking techies, who would use GitLab's platform to create huge amounts of code and thus slowly attract large, blue chip corporations.
Actually, GitLab does have a fresh, new look and the open source alternative does appeal to the brightest minds of today's technology world as evidenced by the long list of not only technology startups, but also many established corporations clientele of GitLab.
GitLab's current market capitlalization is 7.75 billion USD and this compares to the 7.5 billion USD Microsoft paid to acquire GitHub.
Actually, the cloud infrastructure as a service market, IAAS of which online, cloud repositories like GitLab and GitHub are a part of could exceed 300 billion USD in annual revenue 5 years from now.
That is why, I think GitLab is worth 25 billion USD and this value could be unlocked in the next 7 to 10 years.
Easy come, easy go. Easy come again?
This, as evidenced by the graph below could be, perhaps the best description of Tesla's stock price:
Statistical arbitrage at its purest form: the stocks which prices go down the most, go up the most during the next upturn.
I still think, however, Tesla Inc. is worth 120 billion USD. If you take out subsidies, Tesla is still unprofitable. And forgive me for asking, but isn't capitalism about making profits? Increasing wealth by creating value, not blowing bubbles?
Anyhow, the Internet took 60 years to commercialise and birth Alphabet, Amazon, Meta. Elon Musk's bet is long-term. If the world's richest man up until two months ago and the brilliant engineers Tesla employs manage to achieve a technological breakthrough, which allows Tesla to produce electric vehicles profitably, despite the high usage of base, ferrous metals, which make the latter impossible as of today, this could make Tesla worth, not only 1.24 trillion USD again, but even more than 2 trillion USD.
Simply because the electric vehicle technology edge production and know-how Tesla possesses, would make it quasi oligopolist, if not monopolist on the electric cars market.
Hence, the logical hedging by Volkswagen, Toyota, Ford etc., which are all entering electric vehicle production, even though they realise that in the short term, they are going to loose billions of USD.
Feb 02/09/2022US:TSLA$310.6667
Currently, the prices of Bitcoin and other cryptocurrencies have been rising in the past month driven by lower inflation, which improves stock market sentiment. In short, risk taking is back on.
The most obvious selection of companies that stand to possibly benefit from the current risk taking environment in Bitcoin, crypto and stocks' prices are Coinbase and Robinhood.
Coinbase is practically a Bitcoin and crypto bourse that collects fees as a middleman from participants in Bitcoin and cryptocurrencies investments. Robinhood Markets is a stock and crypto brokerage company, the main business of which comes from relatively young retail investors, many of them technologists and financiers, but also from many other professions.
As far as I am concerned, Coinbase's market cap can rise 7 times from its current level in the next 7 years, while Robinhood's market capitalisation can rise also 7 times from its current levels in the next 7 years.
The 4x7 numbers are coincidence. Really. 😀
I think Bitcoin and cryptocurrencies are not only a large part of the future of finance, financial intermediation and financial markets, but also a huge driver for the future success of humanity via the blockchain algorithm, that underlies Bitcoin and thus creates the cryptocurrencies asset class.
Simply because the hashing tree blockchain adapts, changes that is.
As fas as I am concerned the top 5 global technologies companies Apple, Microsoft, Amazon, Alphabet, formerly Google and Meta, formerly Facebook are overvalued.
Microsoft's financial results for 4Q2022 reported yesterday confirm this, I think. Microsoft reported only 2 % sales growth in 4Q2022 year on year. Most intriguing were the quite weak results in the cloud computing business of Microsoft.
Actually, cloud computing underpinned by artificial intelligence, AI is what most technologists consider the main growth driver for both the technology sector and the global economy.
In view of the above, according to my opinion:
1) Apple is 50 % overvalued
2) Microsoft is 40 % overvalaued
3) Amazon is 57 % overvalued
3) Alphabet is 30 % overvalued
4) Meta is more or less fairly valued, after the recent stock price fall, interestingly enough
According to my estimates, Moderna Inc, the mRNA COVID 19 and other vaccines producer has an intrinsic worth of 370 billion USD.
My estimate of Moderna's value is predicated on two factors:
1) Current factor: Moderna's COVID 19 coronavirus vaccine is arguably the best coronavirus vaccine on the market. With it, Moderna is getting currently more than 20 billion USD in revenue a year.
Actually, COVID 19 is proving remarkably adaptive, resilient and able to change in many new and sometimes more precarious variants. Witness the coronavirus situation in China currently.
That is why I think COVID 19 is definitely not over.
2) The future factor: Moderna is the pioneer in messenger RNA, mRNA technology. And mRNA is according to many analysts, medical doctors, medical professors, etc, the future of medicine.
One reason is because mRNA can adapt, evolve, wrap around human DNA and thus provide more efficient treatment for some the leading diseases, medical conditions of our time.
Moderna Inc, already has patented some mRNA vaccines for today's leading medical conditions.
All in all, Moderna seems to be the cutting edge of contemporary medicine.
The strategy for coping with the newest, perhaps riskiest financial asset class, namely Bitcoin seems to be curiously enough the classic value, Warren Buffett like holding a long-term view.
Actually, Warren Buffett, although he talks against Bitcoin and crypto, has invested more than 1 billion USD in Nubank, a Brazilian Neo, crypto bank.
Yes, Bitcoin's price has fallen a lot from its peak of around 70 000 USD, but the blockchain underlying Bitcoin remains a versatile, jump modelling value creation tool, which is going to transform the way we live, work and play.
Bitcoin, due to its nascency and lack of regulation is bound to be risky and volatile.
But the huge value creation potential is there for most to see, as far as I am concerned.
Spotify's intrinsic worth is 140 billion USD, according to my calculations and opinion.
The current market capitalisation of Spotify is 18.9 billion USD.
Spotify's revenue is growing by an average of around 22 % year on year on for the last four running quarters, which compared to the slowing down of revenue growth or in some cases even falling revenue year on year of many of the largest, midsize and small size technology companies is a remarkable achievement.
Apparently, music is still consumed in droves, even during recessionary economic periods.
One explanation is that music brings happiness in a way and thus helps people cope with the current economic hardships.
While other technology goods like iPhones, Macs, other smartphones, computers etc. are considered discretionary, luxury goods and their sales are falling in economic slumps.
Spotify exhibits net profit margin of around 5 % in just one of the last four running reported quarters, while the other two are with negative profitability for Spotify.
So the scant profitability lowers the eventual valuation multiples of Spotify.
All in all, it will be interesting to observe how big in terms of market value company, Spotify will become.
Since Spotify is basically the only large scale listed music streaming company.
We are watching a rare, live experiment in history.
All in all, cloud computing is the future of computing.
Simply because you pay as you go. Especially now that the computing requirements associated with big data analysis, Bitcoin production and supercomputer power are rising exponentially.
Yes, trust is difficult to gain. That is why back in the past many companies had at first their own electricity generators and were reluctant initially to rely wholly on the electric power grid. Slowly, but surely large corporations started relying almost solely on main grid electricity power plants for electricity production.
They still keep their own mini power plants on premise though.
With cloud computing, the case seems to be similar. Snapchat and Spotify, for example rely on Amazon Web Services, the cloud computing business of Amazon for their large part of their computations.
That said, though, both Snapchat and Spotify have significant computer resources in house.
Basically, it seems computing today is an exercise in information risk management for both people and corporations.
Bitcoin is positively correlated with equities.
Bitcoin is something like enhanced technology stocks in terms of price moves.
But, yes, I think Bitcoin could be effective investments diversifier for a stocks + bonds + commodities portfolio.
Bitcoin and cryptocurrencies positive correlation with equities will help hedge the bond part of the portfolio.
Since Bitcoin and crypto are a new and erratic in terms of price moves asset class, its jump processes can also prove a very moderately effective hedge diversifies for the equities part of the portfolio.
All in all, Bitcoin and cryptocurrencies' price moves in the future will be a very interesting stochastic phenomenon to observe.
Apple's intrinsic worth is 1.1 trillion USD, according to my opinion and thinking.
Currently, Apple is valued at 2.15 trillion USD on the Nasdaq bourse.
Potential conflict between China and Taiwan, falling smartphone sales, technology sector overvaluation and rising interest rates levels are all factors putting downward pressure on Apple's value.
Regarding strategy the new cloud App Store services fees revenue strategy is great and very profitable, but still the core of Apple is hardware and Apple's hardware IT products are expensive, discretionary goods, which become a real luxury in war times.
All in all, however, Apple retains its durable competitive advantage.
Minted by the people for the people via the blockchain algorithm.
The blockchain algorithm is essentially a hashing, tree algorithm which models nonlinearly the surrounding environment.
Translation: blockchain adapts constantly to the world.
-> That is why, Bitcoin will prove very resilient, as far as I am concerned.
If China invades Taiwan, the most immediate effect on the stock market will be that technology stocks, led by Apple Inc will be basically almost annihilated in the space of several weeks.
The bedrock of information technology -> computer chips are more than 50 % produced in Taiwan.
All information technology services are basically a leveraged play on the computer chips industry.
Actually, inflation will shoot up again since computer chips ares used in cars, TV sets, washing machines, climate control units etc.
Alternative production venues will be found though, in 3 to 5 years.
In my opinion, Bitcoin's price could surpass 35 000 USD in 3 months time on the current bear market rally of EUR/USD and equities.
Bitcoin is currently the most volatile, high beta, translation -> riskiest asset class available on public markets that is not levered.
Usually, the riskiest asset classes go up in value the most when the general market sentiment turns up again, even be it as a part of a relatively large bear market rally, which is exactly what we are witnessing now, according to my humble opinion.
I estimate the intrinsic worth of Moderna, the COVID 19 vaccine producer at 340 billion USD.
The main reason for my opinion for the high probable future Moderna market capitalisation is the current coronavirus situation in China, which can be likened to a full blown crisis.
With so many infections reported by authorities in China, some medical doctors think and forecast the COVID 19 coronavirus could form a new COVID19 coronavirus mutation strain, which could be much more dangerous and more infectious than the existing COVID19 variants.
There are media reports that the COVID 19 coronavirus vaccines produced by Chinsese pharmaceutical biotechnology firms are not as effective as Moderna or Pfizer BioNTech's COVID19 vaccine shots.
Which naturally leads to the supposition that the demand for Moderna's COVID19 vaccine could increase exponentially in the midterm.
The major bulge bracket Wall Street Banks Goldman Sachs, JPMorgan, Morgan Stanley, Bank of America, Citi are overvalued by more than 25 % each, as far as I am concerned.
The main reason, according to my view is that there is a pending deep economic recession and the big five Wall Street banks hold large portfolios of risky assets, predominantly FX swaps and real estate off their balance sheet, which the Federal Reserve sooner rather than later will force them to report on balance and hence the losses for Goldman Sachs, JPMorgan, Morgan Staley, Bank of America, Citi will pile up significantly.
What is more, Goldman Sachs, JPMorgan, Morgan Stanley, Bank of America, Citi all have large exposures to the information technology sector, which has been leading the US and global economy since 2009.
Now the technology companies are shedding hundreds of thousands of jobs, suffering declining revenues and profits. Naturally, the big Wall Street banks will suffer a lot.
Goldman is 30 % overvalued, JP Morgan by 35 %, Morgan Stanley by 50 %, Bank of America by 40 % and Citi by 25 % approximately, in my view.
The overvaluation for Citibank is the smallest since Citigroup due to various mishaps and scandals has been trading at low multiples, deep into value territory.
Soon many companies will start to again issue cryptocurrencies to fund themselves.
For one reason or another the process slowed down in the recent years, but cryptocurrencies issuance fills an untaken niche in funding. It is usually much larger than angel investing without the strings attached, bigger than seed, A and sometimes even B rounds. Again with much less obligations.
And minimum oversight.
Wall Street investment banks and venture capital funds, based in Sandhill Road are arrogantly underestimating the new cryptocurrencies competitors, I think.
Bitcoin is currently negatively correlated with EUR/USD.
When the USD appreciates, Bitcoin's price usually appreciates.
However, I expect this correlation to break down, similar to oil USD correlation.
Since oil and Bitcoin actually replace USD.
Bitcoin seems to more or less fulfil money's three main qualities: unit of account, store of wealth and means of exchange.
So far, because of Bitcoin's price volatility, the main cryptocurrency has not functioned very well as a transfer of wealth.
One simply is not quite sure what will one Bitcoin be worth in 1 month time.
However, as more and more institutional money managers like hedge funds, asset management companies, pension companies, insurance companies and endowments invest in Bitcoin, the volatile of Bitcoin will decline as the market for Bitcoin broadens, Bitcoin and crypto become more liquid financial instruments.
Bitcoin's volatility in 7 years time should resemble the volatility of a mid capitalisation technology stock for a tech company with value of let's say 10 billion USD.
Possessing Bitcoins is actually investing in financial technology.
Money is the edifice, bedrock of finance. And Bitcoin is electronic money.
By having Bitcoins one actually invests in the store and transfer of wealth, financial technology, which is actually investing.
Add to that innovation and Bitcoin and crypto could explode in value in the future, I think.
Gitlab's current market capitalization is 5.8 billion USD.
GitLab is GitHub type cloud based code repository, which makes it cost efficient for firms to collaborate on software applications production.
Since software code is the bedrock of our modern society, GitLab should prove very valuable long-term.
I estimate GitLab has an intrinsic worth of 20 billion USD. GitHub was sold for 7.5 billion USD to Microsoft.
PayPal's current market capitalisation is 87.20 billion USD at 20 billion USD revenue and 4.71 USD net profit for 2021.
In my view, PayPal's intrinsic worth is 320 billion USD in the long-term.
Not only is PayPal a dominant payments provider, but PayPal is also very profitable as well, which for a technology company, especially fin-tech company is not very common.
PayPal's usage numbers tell vividly PayPal's success story.
The computer power needs to produce Bitcoin are well known as quite high.
So, when Bitcoin mining explodes again, the stocks of computer processing chips manufacturers like NVIDIA, AMD, Intel, Qualcomm, etc. could rise significantly, I think.
NVIDIA Inc, has currently a market capitalisation of 365.53 billion USD.
According to my estimates, NVIDIA's intrinsic worth is 210 billion USD.
NVIDIA's current market capitalisation is pricing too high a sales revenue and ultimately profit from its graphic processing units given the current state of the economy.
I think, after the coming China COVID 19 economic crisis, the world economy will dive into a deep recession.
And consumer discretionary goods like computer chips will not be so sought after.
Yes, NVIDIA is the leader in Artificial Intelligence and AI is tomorrow's computing, but NVIDIA Inc is simply overvalued, in my opinion.