Author: Matt Thalman

The Anti-ARK (or Anti-Cathie Woods) ETF

Posted on by Matt Thalman

Over the past few years, Cathie Woods has made a name for herself. It started with her ARK Invest flagship Exchange Traded Fund the ARK Innovation ETF (ARKK), which returned an astonishing 45% annually for five years straight. Her other Ark Invest funds had similar success, and regularly these funds would rank in the top 10 of the best performing non-leveraged equity ETFs investors could buy.

Cathie became more of a household name when she not only went on CNBC years ago and said she thought Tesla was a $2,000 stock (this was prior to Tesla splitting), and she was proven correct. When she made this claim, her Ark funds were doing well, but most investment insiders thought she was crazy and that her prediction for Tesla would never come true. So, when she was proven correct, everyone started watching what she was doing and either trying to copy her or attempting to bet against her.

Copying what she was doing was and still is easy since her fund publishes the daily trades they made during the previous session. Not only do they publish the stocks they sold and bought, but how many shares of each company they traded. For a time, the morning show on CNBC would review her previous days' trades and discuss whether or not they agreed with what her funds were buying and selling.

Some would say that Cathie's luck has now run out because while for years she had some of the top-performing ETFs, 2021 has not been so kind to her. Continue reading "The Anti-ARK (or Anti-Cathie Woods) ETF" →

Should The Omicron Variant Be A Concern For Investors?

Posted on by Matt Thalman

While Americans were celebrating the Thanksgiving Holiday, the rest of the world dealt with the newest Covid-19 variant. The Omicron variant of coronavirus, first identified in South Africa, has been reportedly spreading in parts of Europe for days before it was identified in southern Africa.

On December 1st, the first confirmed US case of Omicron coronavirus variant was detected in California. In a White House news briefing, Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said the case was in an individual who traveled from South Africa on November 22 and tested positive for Covid-19 on November 29.

As of the end of November, the variant was already found in 20 countries, and governments around the world were already implementing lockdowns and travel restrictions.

These decisions where being driven by the fact that the Omicron variant was substantially different. With about 50 mutations from the original coronavirus, which started the pandemic, and about 30 mutations compared to even the highly contagious delta variant that has swept around the world. However, scientists don't know if the variant is actually more contagious or more deadly than any previous variants.

Many have been calling this an overaction, while others say the lockdowns and travel restrictions are adequate steps to protect others. Regardless these are difficult decisions for the politicians, and there will inevitably be those talking heads on the T.V. bashing the leaders regardless of their decisions. Part of this circus helps build fear and anxiety in most people, leading to fear and anxiety within the stock market.

The worst single day for the U.S. stock market in 2021 was Friday, November 25, the day following Thanksgiving, a shortened trading day, and of course, the day after the world found out about the new Omicron variant. The following few trading days were similarly volatile, with the market bouncing higher and then lower, despite any new real tangible information about the true nature and danger of the Omicron variant being known.

So, should this new variant be a real concern to investors? Continue reading "Should The Omicron Variant Be A Concern For Investors?" →

Are You Concerned About Inflation?

Posted on by Matt Thalman

Twitter and Square CEO Jack Dorsey is the most vocal and alarming figure in the finance world who is not just raising the alarms on the potential coming inflation issues but is banging bells and yelling from the towers about the possible coming problem.

Dorsey said in a tweet, "Hyperinflation is going to change everything. It's happening." When replying to another tweet about inflation, he went further to say, "It will happen in the U.S. soon, and so the world."

While there have been other big-name investors, bank c-suite members, Federal Reserve members, and even the Treasury Secretary indicate that inflation will happen. Some have even said it is a little higher than what they expected. However, not many have said Hyperinflation was coming and would happen soon in the U.S. and then the world.

While some have and will continue to dismiss Dorsey's claims, we all need to remember that he is the CEO of Square, the payment company. So theoretically, Dorsey has access to information that others may not have, which could give him a better insight into how fast prices are increasing and what products are seeing big increases, which would undoubtedly help guide the thinking that higher than expected inflation is on its way. (Just a thought). Continue reading "Are You Concerned About Inflation?" →

ETF Investors Should Know Their Tesla Exposure

Posted on by Matt Thalman

Shares of the electric car manufacturer Tesla (TSLA) have undergone a meteoritical rise over the past few years, a move that very few investors have ever seen or experienced. Since late October 2019, Tesla has been up more than 1,680%, compared to the Vanguard S&P 500 ETF (VOO), which is up just 59% over the same timeframe. The move Tesla has made is nothing but incredible, and congratulations to all those investors who had the foresight and fortune to have owned Tesla stock, either directly or through, and some sort of fund and have benefited from the move.

However, as with all investments, what goes up, can come down. And Tesla has undoubtedly seen this story play out over time as a publicly-traded company. Several times throughout its time, including this week, it has seen massive pullbacks and corrections, of course only to go even higher longer term. But that doesn't mean another move lower, like the 36% drop during a six-week period earlier in 2021, should be dismissed by investors.

Both long and short-term focused investors need to understand that stocks of even the best companies move higher and then lower, only to move higher again. And understanding this movement and knowing what the risk of an investment is and the potential return an investment has, is extremely important can help you invest smarter. Continue reading "ETF Investors Should Know Their Tesla Exposure" →

Bitcoin ETFs Aren't Going To Produce Same Returns As Bitcoin

Posted on by Matt Thalman

Bitcoin and other cryptocurrencies have once again hit new all-time highs over the past few weeks; many believe this was largely due to the hype surrounding the inception of the first Bitcoin Exchange Traded Funds in the United States.

The hype around the Bitcoin ETFs, like the ProShares Bitcoin Strategy ETF (BITO), was largely due to the idea that now the average investor or fund manager can easily garner access to Bitcoin through their standard investment platforms. The ETF would allow them to invest in Bitcoin without relying on the Coinbase's of the world or setting up a digital wallet and transferring funds into those accounts. It may sound like a small thing, but most investors prefer all their investments in one clean place.

The Grayscale Bitcoin Trust (GBTC), which many considered the first fund that gave the average investor access to Bitcoin in an easily tradable way and is a fund that actually holds bitcoins. BITO and the other newer Bitcoin ETFs, hold ‘futures’ contracts on Bitcoin, not the actual asset itself and this causes some issues with these new ETFs accurately tracking the price movements of Bitcoin. That is not to say that BGTC tracks Bitcoin price movements perfectly either, but it doesn’t have to deal with the same issues the newer ETFs will be facing. *(see footnote)

This type of investing is different from actually holding the asset itself because, in order to gain exposure to the asset through futures contracts, you spend more money to gain that exposure. Plus, you spend it each and every month when you'll roll' from one month's futures contracts into the next. Continue reading "Bitcoin ETFs Aren't Going To Produce Same Returns As Bitcoin" →