Friday File: Interest Rates, REITs, Bitcoin and Berkshire
by Travis Johnson, Stock Gumshoe | May 26, 2017 4:37 pm
Big picture thoughts about Bitcoin and REITs, plus updates on PCSB, NODK, WATT, MKL, and even a little marijuana stock...
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Source URL: https://www.stockgumshoe.com/2017/05/friday-file-interest-rates-reits-bitcoin-and-berkshire/
Thanks for the interesting piece Travis. I don’ t think I own any of these issues, but I would love to hear whether there is finally some reasonable way to gain direct short exposure to bitcoin and other cryptocurrencies.
Thanks for the balanced view on cryptos Travis. Just a few points though… you can actually use bitcoin to pay taxes in Japan, now that they have legalized it as an official payment method. Some believe Russia will soon follow. It also has utility in a few ways… reducing transaction costs vs. using banks/credit cards and the ability to transfer wealth around the globe instantly and free of charge. Not to metnion, it has the potential to disrupt many multi-billion dollar industries via cutting out the middlemen and improving process efficiencies. That being said, prices have become frothy and a deeper pullback seems likely. We first mentioned bitcoin in our newsletter when it was around $100 and have been covering cryptocurrencies extensively, in addition to precious metals, for the past 12 months. We have around 12% of the GSB portfolio in cryptos and recently took some profits off the table via using bitcoin to purchase gold and silver bullion online. This can be done with no conversion to bankster fiat or utilizing the legacy banking system on our end. I view bitcoin and gold as complementary assets. goldstockbull.com
Regarding REITs, I would be interested in other opinions on the three that I own. All have been very good investments thus far for me. APTS, purchased in November/2014 at $8.73 has more than doubled with dividends reinvested (current YOC is 10.2%). NRZ, purchased in March/2016 at $11.90 is up 63% with dividends reinvested (YOC is 16.13%( REM, purchased 9 days ago at $44.95 is already up 3% with the first dividend I’ll receive due on June 24 that will be a YOC of 9.5%. Any and all opinions would be welcome.
One reit that I own and have been reinvesting in is EVA pays a great dividend and they constantly raise it .It is almost a monopoly the T are the largest producers of wood chips interesting play
I’d want to make sure their exposure to clothing and other hurting retail sectors is limited. Not everyone can be selective about their real estate holdings, so some of these firms will be stuck holding the only thing worse than a Sears store: a closed one.
Unless they can be really creative with reinventing those spaces, which requires special managerial talent with a vision.
I like the historical comparison of REIT vs. BB junk bond yields. I’ve gravitated to both in my HSA in order to gain some income on funds that need to be invested conservatively. Used to have a preferred stock fund, but realized there could be a lot of interest rate risk there since most preferred stock is perpetual so payouts would take a long time to adjust when rates rise.
That said, as Buffett also hinted during the Berkshire meeting, there’s a decent chance we go into a Japan scenario where interest rates remain near zero for many years.
“and China, if it wished, could effectively shut down bitcoin trading for their residents tomorrow”
This is something that’s been puzzling to me. I live in China and got to wanting to buy some bitcoin about a yr ago. Just before it started soaring like a rocket. I was unable to buy any. Even with a VPN connected to servers in America. I wasn’t able to buy. Tried everything I could think of, with no luck. You can imagine my frustration! I’ve missed out on some enormous gains here. I often here how the Chinese buying is a large part of why it’s been surging. Well, if that’s true, I’d really love to know just how in the heck they’re pulling it off!!?? Of course don’t know if I’d still want to buy today even if I figured out how to.
Interesting, I didn’t know it was at all blocked currently.
LostOkie – BTCC maybe worth a look. They have a separate site for China residents – (btcchina available in English, priced in RMB) and one out of HKG for International users (US$ & RMB). See if you qualify for an international account. Surprised to hear that they’ve effectively blocked access to overseas exchanges even via VPN. For the China Domestic buyer, I wonder if BTCChina allows the account holders to withdraw their Coins to any sort of independent offline wallet? If so, nothing preventing the coins from re-surfacing (via transfer) in any overseas account. It may be that BTCC China is just a buy/sell site, with no coin withdrawals permitted…. by the way, June 5th 2017 (WSJ article) the Chinese govt lifted a 3 month moratorium on Coin Withdrawals.
Re below – saw the moratorium on withdrawals was so that all local China based exchanges could certify that they had systems to track PBOC annual cap of US$50K/person in withdrawals and Anti Money Laund. regulations. If you open an account & withdrawals permitted – strongly recommend familiarizing yourself with moving your coins to an offline wallet. Never know when they decide to freeze again & for how long… best of luck.
misterio, I know it’s been a long time but I’ve just now seen your suggestion. Thanks! I’ll look into this.
Travis – how did you buy bitcoins?
I use Coinbase, mostly because I’m lazy and like the convenience and security of a US-based wallet provider and simplified trading platform that’s quite user-friendly.
Travis it was your initial write up last year about Etherium, that prompted me to exchage bitcoin for ETH. 1800% gain before moving to US dollars. Looking to buy back and I opened a small litecoin position. Major run up on my account value. I do wonder about taxes, and trading out of the currency. Thanks
You can import your holdings on Coinbase as well as other exchanges on the website Bitcoin.tax and it will calculate your tax liability.
Call me old and low tech but I am still baffled as to how Bitcoin can be allowed to exist by the various countries as it seems like counterfeiting to me. Gold is heavily manipulated down in price by US Gov to prop USD up so why would we let a fake, computerized digital currency be acceptable??? I do have an opinion on this odd situation. It is no secret to many who study macro economics that that the fiat monetary system is in trouble and has never lasted more than an average of 27 years or so despite our “faith based US dollar” being approx 45 years old. With so much world wide debt that is beyond repayment I believe we will see a total “rewrite” of monetary policy and guessing Gov’s would love to go “cashless” but realize that many would recoil. So, what better way to experiment to see how the public would react than to just allow Bitcoin to exist as an “experiment” to see if indeed the world’s Gov’s could get away with going totally digital and have a cashless society? (FEDCOIN?)
India seems to be heading in that direction with their recent outlawing of higher denomination bills. Certainly we have Apple Pay and others already in use…………….not a big leap to push us all into a fully digital monetary system. Sounds nice and convenient until you understand they’d only do it using BlockChain technology which means we have lost the last bit of our privacy that FaceBook has not already taken away!! Other than a USD, I’d only take gold or silver as money. Personally I have invested heavily in gold mining stocks in anticipation of upcoming economic collapse and lack of faith in paper monies. If markets crash and someone owes you money, you going to take a gold coin or a “Bitcoin”? Guessing most will take the few thousand year old proven wealth preserver GOLD payment.
Bitcoin is in itself a “store of value”. The number of Bitcoins is limited to 26 Million. Fiat currencies are printed out of nothing in the Trillions!! Backed by DEBT. Bitcoins one have to pay for (store of value). Bitcoins are backed by CREDIT. So all the fear mongering is stupid. People are not going to sell all at once (They paid for it remember). It will become an accepted currency worldwide (US and Europe last because they will collapse without the ponzi money printing scheme). They will try to criminalize bitcoin, mark my words. But Bitcoin and Ethereum will be there to stay for a long time and further increase massively in value (against paper fiat). Use the dip to BUY!!!
Another great article that has gotten my wheels going and ,that is Cryptic/digital currency. Not being a “legal” tender as in being virtual currency. Here are 3 links I have been searching to get a better grasp on the growing interest in cryptic digital / block chain etc. virtual money.- here are the links as follows- https://www.blockchain.com – https://cointelegraph.com — https://www.ethereum.org
I am wondering, due to the current ongoing issues with ransomware, and since the criminals running these scams are opting for payment in currently untraceable cryptocurrencies , if that may lead to a ban on them, or possible elimination of the anonymity.
There is criminal activities everywhere and that’s the stigma about crypto currencies but represent only a very small percentage of the trading. What people fails to recognize is the Blockchain technology behind it that will change the Internet.
Hi Travis,
If I may, I would like to weigh in on the crypto conversation with the hopes of clearing some things up.
Semantics. Unfortunately the word ‘cryptocurrency’ is universally being used, even when there is no actual currency involved. I wish the world at large would start saying ‘block chain technology’ to describe these ‘coins’. Bitcoin is considered to be a currency. Litecoin is not. Storjcoin X is not. The distinction is super important as most of the block chain programming is NOT a currency, but rather more like an Ap that is using the block chain technology.
An example might be Peerplays coin. It is an online gambling and gaming platform using the block chain technology that will effectively eliminate the manipulation and cheating that is rife in the online gambling scene now. The coins can be bought and sold. Definitely not a currency.
Antshares coin is a platform that the China government is endorsing for, amongst other things, tracking internal government money transactions (sending money to provinces) so that graft will be eliminated. If successful, this block chain Ap will be the platform for many, many Aps yet to be created in China for the Chinese. But, not a currency.
The vast majority of these new coins are in fact Aps that are using a specific block chain technology. Registering property titles so that corrupt third world government officials just can’t come and take ownership? An Ap is on its way. Home Security wanting a better way to prevent the drug cartels from hacking into their drone system? An Ap is on its way. (This Ap development is actually being partially paid by Homeland Security.) And again, not a currency.
In many ways, coins are simply ‘shares’ in the companies that are developing these Aps. IPOs anybody? Nope. They are called ICOs. Initial Coin Offerings.
Someone somewhere mentioned that where we are at now with block chain technology is like where we were at in the late 80s and early 90s with the internet technology. It is clumsy as hell trying to buy, sell, track and store these coins right now. But guess what? Fidelity is right now working on being the first mainstream broker to include a trading platform for ‘cryptocurrencies/block chain Ap Coins’. And when trading these Ap Coins become mainstream, watch out! Then we might be able to have a ‘bubble’ conversation.
(I bought Ethereum (Ether) at 16 back in Sept. It is now 169. Can any one imagine it going to what Bitcoin is today? $2,150. Plenty of people can and what scary heights could it go if a true bubble emerged? I shudder to think, though the shuddering is my giddiness and blatant greed.)
So Travis, to say that you have concerns that these cryptocurrencies only have value based on mere consensus is not quite true. Yes, there has to be a buyer for each seller, but there is marketable value behind the coins. Some will never be successful. But I truly believe that some will dominate our world in a very short time because of this remarkable technology.
Personally, I am cautiously, and painfully, learning what I can and am putting some small amounts into the coins/Aps that make sense to me.
I hope this explanation helps in some way.
Steve B
I have something better. It is called JoeCoins. It is neither a cryptocurrency or block chain technology. I can’t guarantee your purchase and there is no implied warranty that you won”t lose everything. However, it may make you rich, or not. Just send me your money, and I’ll figure out all the details after I come back from vacation.
I know for a example. If you go to JMBullion.com and look to buy some coins. Say $5.00 gold eagles 1/10 oz. You click on compare details. Your taken to a menu with 1-99/ $142.00 ea. using payment types – wired, Check, Bitcoin Below this list another listing. 1-99 $146.00 ea. credit card, Debit. And I can use several examples from other sellers selling other things. The word cryptic is slang. And you can purchase with it. And sell with it. And it is used as a currency for lesser of a better word. The prices above are examples only.
Example — (off of my cuff earlier today)
1 – 49
50 – 99
100 – 499
500+
$146.29
$145.29
$144.29
$143.29
Credit Card / PayPal
1 – 49
50 – 99
100 – 499
500+
$152.39
$151.34
$150.30
$149.26
Payment Method Selected in Cart
JMbullion.com
2017 1/10 oz American Gold Eagle Coin (BU) -In Stock
Ships within 1 business day of cleared payment.
Price Chart for date–05/26/2007
Gold Ask: $ 1,270.64
Payment Method 2017 1/10 oz American Gold Eagle Coin (BU)
Wire / Check / *BTC
1 – 49 $144.25
50 – 99 $143.25
100 – 499 $142.00
500+ $141.25
Prices with –Credit Card / PayPal
1 – 49 $150.26
50 – 99 $149.22
100 – 499 $147.92
500+ $147.14
*Bitcoin
Speaking of REITs… CoreSite just announced a surprise rise in the dividend today, from 80 cents to 90 cents for the second quarter. They generally have been raising the dividend just once per year, in the Winter, and more dividend raises are certainly baked into the price here, but I don’t really understand why they’re hiking now unless they’re specifically trying to protect the share price (which might mean that they’re close to doing another equity offering to fund more expansion, though I have no actual news of that — just a possibility).
So now… the annual expected dividend is $3.60, which means a yield of about 3.5% at the current $103.
May 31,2017 Bicoin (GBTC) open $426.50 close $484.05 +13.43% 4:00PM. ET +$57.05 Fidelily
The Bitcoin Investment Trust is an open-ended grantor trust based in the U.S., sponsored by Grayscale Investments. It is invested exclusively in bitcoin and derives its value solely from the price of bitcoin. The Trust’s objective is for the NAV per share to track bitcoin’s market price.
Address
Grayscale Investments
636 Avenue of the Americas Suite 3
Suite 300
New York, NY 10011
Phone
T: 212-668-3911 The Post I posted first seemed to be low from fedility home page so I googled it and found this and a bunch of more information. All I can say is Travis help. Get that thinkalator and see what sense you make of the Trust and regular Bitcoin sellers. I glanced at it and just wanted to point out how I came up with the symbol which is GBTC- Bitcoin Investment Trust.
CR
Only four out of the more than 10,000 mutual funds based in the United States have bitcoin as part of their portfolios. Of those four, three are from the same New York-based firm, which collectively manages $1.2billion in total assets. The value of bitcoin has more than doubled this year in volatile trading as retail investors in Japan and South Korea have piled into the digital currency. Bitcoin has also been increasingly used in so-called ransomware attacks because of its untraceable nature. The price par of a single bitcoin peaked at $2,760.10 on the Bitstamp exchange on Thursday, but has since fallen to $2,292.53. Any U.S.-based mutual funds that do have exposure to bitcoin own it through shares of the Bitcoin Investment Trust, a $797 million closed-end fund sponsored by New York-based Grayscale Investments that trades in the lightly-regulated over the counter market. Each share of the fund owns approximately a tenth of a bitcoin. The lack of availability of the shares have pushed their prices well above the underlying price of bitcoin itself. Shares of the closed-end fund are up 77.1 percent over the last 5 days, according while bitcoin itself is down 2.9 percent. Those wild swings and lack of clear prices make bitcoin “uninvestable” right now, said one mutal Fund manager. I have read that Symbol- GBTC which can be looked up on Fidelity. One share of MBTC is ONE/TENTH of a whole Bitcoin. FYI.
I wanted to share some news about Northern Dynasty Minerals (NAK/NYSE) that I saw in an article today with an initial Buy recommendation. Target is $3.75 (closed today at 1.79). I know that Travis has discussed NAK recently.
New to crypto currencies but my simple understanding in this mania is 2fold. First crypto currency and its advantages: Internet virtual money.
Second and most important , the Blockchain technology behind it. BItcoin is a pure play crypto currency.
Ethereum is a currency and a platform to build upon new application that is a disruptor in the market place. Thousands of new economies /applications will be running on the platform.
Now to participate in this new economy , an investor must convert its fiat currency into Bitcoins, Ethereum or Litecoin to invest into those new crypto businesses therefore assuring a demand for crypto currencies in the first place.
The way I understand it , setting aside the volatility, the crypto currencies Bitcoin and Ethereum are here to stay and will be part of our future and means to pay for products in a near future near you. Appreciate feed backs
When reading your thoughtful analysis of Bitcom, I was reminded of the classic “Extraordinary Popular Delusions and the Madness of Crowds” by Macklay. This delightful book should be in every serious investor’s library.