Posted August 27, 2021
By Aaron Gentzler
Bitcoin or Gold?
A longtime reader wrote to us last week, “Propaganda must be repeated over and over to get it to stick. That is the reason we hear ‘transitory’ as much as we do.”
This week we’ve looked at supply chain problems, the semiconductor shortage, labor market issues, local prices where you live…
And we’ve come up with more angles to the problem, the problem being inflationary pressures all around us…
… Instead of landing on solutions.
In our experience, when you examine a problem and come up with more facets to it instead of “easy win” solutions, that means the problem is real and requires deeper thought.
If this seems obvious to you, check Fed Chair Jerome Powell’s inflation comments later this morning against the BS detector of your choice.
In anticipation of an outlook better served for economic conditions on Pluto, we’re going to reiterate Zach Scheidt’s guidance in these pages from last week.
You protect your purchasing power in inflationary times with metals, smart real estate holdings and blue chip stocks. Strictly speaking, the blue chips are more useful if they pay a dividend.
To Zach’s foundational guidance we’d like to add a wrinkle, however.
What if you were to take a small portion of your metals allocation and buy Bitcoin or Ethereum — a top five crypto, not an alt-coin or a joke-coin?
Have you done this? Say what you will, it’s a possible solution to a complicated problem.
There’s chatter out there Bitcoin’s next stop is $90,000. And then “sentiment” and round-number mentality takes it to $100,000.
Tell us what you think. Write to us right here: TheRundownFeedback@StPaulResearch.com
Your Rundown for Friday, Aug. 27, 2021...
Peloton, We Have a Problem
In one way of looking at the market, you could argue the “lockdown” stocks from last year — Peloton (NASDAQ: PTON), Clorox (NYSE: CLX) and others — were living on borrowed time.
Similarly, you could also argue the “reopening” stocks from earlier this year — Airbnb (NASDAQ: ABNB), Southwest Airlines (NYSE: LUV) and others — were/are overhyped.
Especially as the Delta variant uncertainty rose nationwide in the past two months.
But here’s the thing. Forget the theme, the bucket, the narrative. Is the stock actually good?
Six months from now… most folks you’d ask would probably be OK holding LUV or CLX or ABNB… lockdown stocks, reopening stocks, theme doesn’t matter.
Now ask yourself… six months from now, where is PTON?
Far off the pack and nursing an injury on the side of the road is our guess.
PTON reported suboptimal fiscal Q4 earnings data yesterday, and the stock cratered. It’s down over 9% again this morning.
Barron’s says, “The stay-at-home trend is definitely over.” Strike one.
The Wall Street Journal says “price cuts” are in the cards for the entry-level PTON bike. Strike two.
Reuters reports federal regulators are probing the causes of injuries sustained while using PTON equipment. Call that a foul ball for now, see what happens.
And for dessert, Investor’s Business Daily says PTON’s fiscal Q1 guidance is weak on the back of the poor Q4 data. Strike three.
PTON was part of a trend. It fit for a time in a hot thematic bucket. Now it’s becoming clear this probably isn’t a name you want to own over the long haul.
Now let’s check in on the markets this morning...
Market Rundown for Friday, Aug. 27, 2021
The S&P 500’s at 4,482 right now, up 0.27%.
Oil’s at $68.79, up 2%.
Gold goes for $1,792.
A Bitcoin will set you back $47,207. The road to $100,000?
Have a great weekend. We’ll talk more on Monday.
Send your thoughts and ideas to TheRundownFeedback@StPaulResearch.com
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Editor, The Rundown