Although you find it difficult to see things close up, your vision of things further away seems to improve significantly.
Last week, I went to Lisbon to enjoy some valuable face-to-face time with a few old friends. I do not have the opportunity to do this as much as I would like, but it is a great way to re-charge the batteries and have a proper discussion/debate about what is going on in various areas.
Despite how some perceive my ramblings, I enjoy being with optimistic people, and few are more eternally optimistic than my good mate at JPFS, Peter Kristensen. He has some exciting products in the pipeline, which I will discuss in future reports.
We had different views on a few things, but as a couple of Old Farts, we both agreed that the speed at which the financial world is changing was really awe-inspiring.
There are a lot of threats to the crypto industry, and it is a challenge to assess what the sector will look like in 12-months, let alone longer. But the investment tools we have today are vastly superior to what we have had in the past, so the outlook remains highly positive for everyone currently involved in the business.
However, it appears we might be in for a rough ride in the near term. At the time of writing, many markets look like they are hanging on by their fingernails.
My overview of the changing geopolitical situation has not changed much in the past 6-months: since I first mentioned preparing ourselves for an economic decline.
Many then considered my outbursts pessimistic because they went against the prevailing "gung-ho" positive view that everybody enjoyed. However, I have traded all types of assets through both boom-and-bust periods, and I know that opportunity doesn't disappear when times are tough. You just have to be more flexible and take more measured decisions concerning risk exposure.
Crypto provides a massive opportunity to succeed, and there are multiple routes to achieving success.
Those who will be the most successful put their own money on the line, take huge speculative risks and fund the development of new products.
However, what is exciting about cryptocurrencies, is that little guys can find themselves a small niche, and if they put in the effort and things go well, they can make a hell of a lot of money relatively quickly.
A booming economy is an ideal environment to succeed, but that doesn't mean there is no opportunity when conditions are not perfect.
One of the best bits of speculation advice I have ever received is, "you are not married to your position. If the situation changes, reassess your position and change it if necessary".
Speculation doesn't need to stop just because the markets or the economy is declining. You make money by being on the right side of a price movement. And that movement can be up or down.
Some assets are difficult or dangerous to short, but you can opt to reduce your exposure or use other instruments to hedge your risk when this becomes the situation.
In my first report for JPFS, I explained that I started investigating Cryptocurrencies because they looked from the outside like an asset class to use as a hedge against an economic decline or the continual depreciation of FIAT.
Since I started this journey, we've seen many changes, so my initial views have changed. I am still not entirely convinced about using crypto to hedge against an economic decline. I'd love a bit more historical data than is currently available.
However, because I am now much more optimistic about how important cryptocurrencies will become in all future financial transactions, I need to discover ways to offset any decline in the value of the coins I may hold. Before Christmas, I moved some assets into gold, oil, and other commodities, which seems the right thing to have done. But then again, I have a good understanding of commodity trading.
We discussed this whilst I was in Lisbon.
I am not qualified to give recommendations - not that you need qualifications when using social media. However, because a picture is worth a thousand words, I will start issuing a few technical observations just for educational purposes.
Instead of once a week, I will try and do these in real-time.
The observations do not promote speculative activity: I am not a broker. The aim is to promote thought and debate and provide insight into many different areas. In the days of brokers, old guys would help new traders learn the basics, but today, such interactions are very costly, and it's all about flow and turnover.
I’ve got a bit of time to answer a few questions at my age, so feel free to comment on anything I issue.
I am looking forward to a bit more dialogue, and you never know; it could prove a little helpful to you.
So, until next time.