Mechelany Advisors’ Investment Ideas are here to make our readers make profitable investments over different time-horizons. Our value oriented investment management style and research focuses on cheap companies with great and solid businesses to be held as core holdings in portfolios. We provide individual Investment ideas based on our multi-layered screening and valuation process combining structural, top-down macro, sectoral analysis, bottom-up stock selection and valuation analysis. Our Investment Ideas may be included in our Model Portfolio while some may not be included if they do not fit the global risk profile and asset allocation chosen at the time of selection.
That is it !
We have reached the stage where we are comfortable SHORTING BITCOINS again.
As our readers know, we have traded cryptocurrencies quite accurately over the past few years even if we have taken our profits too early in 2020 on our last long position, still making 283 % profits on our long position.
We first shorted Bitcoins on Dec 19 2017 at 19’000, the very day the future contract started trading in Chicago. We bought back our shorts over 2018 at between 7’000 and 3’500.
We then went back into Cryptocurrencies in May June 2020 at prices between 7’000 and 10’000 using the Grayscale Bitcoin Trust GBTC US. We took our profits in the third quarter of 2020 as the cryptocurrency traded at 20’000, but the Grayscale Trusts had actually gone to a 200 % premium to NAV because of massive inflows as investors were pouring in.
Bitcoins then kept on rising and peaked at 58’350 last month.
As we all know, a massive speculative bubble is in full swing in many segments of the financial markets fuelled by the unprecedented amount of liquidity engineered by central banks and helicopter money issued by the US Government to Americans punting the markets through online trading platforms and options.
Bitcoins has NO intrinsic value…
and that cannot be used as a payment method because of its huge volatility.
It is just a piece of code that has limited supply and potentially unlimited demand, explaining its outsized volatility.
But when everybody is long and positive on the crypto, then they become dangerous because when they turn, there are tons of sellers and no buyers…
And they are now turning…
So today, we have decided to SHORT BITCOINS in our MODEL PORTFOLIO through the Future Contract at 50’090
Transaction List 4th March 2021
Today, Besides initiating a 5 % SHORT Position in Bitcoins in our MODEL PORTFOLIO, we took a lot of profits on our Short positions in US technology equities, tactically.
We remain extremely worried about a major correction coming in the next few weeks, and structurally bearish US TECH for the log term but our Model Portfolio is up almost 26 % since the beginning of 2021, so we decided to lock in our profits on shorts like TESLA, APPLE, the RUSSELL 2000 and AMD.
We have also covered our Short positions in Europe and added positions in Gold and Silver and in the Chinese CSI 300 ETF as the most important session of the National Congress of the Communist Party starts its meetings tomorrow.
We expect the markets to bottom tactically next week, for a short and very small rally in April and will take that as an opportunity to re-instate our short positions.
Equally, we stand ready to re-instate our shorts on a downside break.
New Asset Allocation
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