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SIX things you need to know this week in 60 seconds.
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*as of 4pm ET, 10/7/21
1. MACRO
Did anyone really think the U.S. debt ceiling wasn’t going to be raised?
Since 1960, the US debt ceiling has been raised or suspended by lawmakers nearly 80 times. Despite countless “but this time it’s different” articles, blogs, and videos that used a possible (but not really) U.S. default as clickbait, this time was, in fact, not different.
Yesterday, Republicans and Democrats reached an agreement to extend the debt ceiling through early December. This way the government can worry about a potential default in a few months, rather than wasting their time over it today like idiots!
GRIT’S TAKE: Buyers rushed the market on the news, lifting all 3 major U.S. indexes on the day. The strategy is paying off for dip buyers.
GRIT’S ACTION: Zoom out. BTFD.
Under the Radar
A 20+ YEAR OF DRONE INNOVATION: What kind of impact can a drone have on a business or government agency? If it’s a Draganfly, it can do a lot: mapping, surveying, data collection, temperature-sensitive deliveries, thermal, heart rate, and breathing rate scans…get the picture? Where can you find them? The NASDAQ ($DPRO)*!
*This is sponsored advertising content.
2. DEALS & IPOs
The uber-rich are looking for more ways to stay uber-rich
The appetite for risk is high, and investors are looking all over for even higher returns. Ordinary investors use companies like Robinhood and OpenSea to help find their way into things stocks, crypto, and NFTs.
Uber-rich investors, though, don’t use iPhone apps to find their alternative investments like peasants — they have teams built around their specific needs for that.
Private equity and asset management companies like KKR and Blackstone are rushing to assemble these teams to lure in whales for their private equity, real estate, and credit funds.
And demand is picking up: at KKR, these individuals already account for ~15% of AUM ($429B). At Blackstone, they makeup 20% of AUM ($649B) and are expected to eventually reach 50%.
GRIT’S TAKE: Who needs KKR or Blackstone when GRIT subscribers get exclusive access to Genevieve’s private deal-flow and a peek behind the curtains at “how the sausage is made”?
GRIT’S ACTION: Subscribe to my paid newsletter to see my deal flow.
3. STOCK MARKET
Insane inflow!
Over the last 25 years, global equities saw cumulative inflows of $727B. That’s roughly $29B per year.
Investors in 2021 looked at that number and said hold my beer, pouring $765B into global equities YTD! This comes out to ~3x the 25-year average…PER MONTH!
If the pace holds, total inflows into global equities will top $1T for the year.
GRIT’S TAKE: The stock market is still the best place for the best returns and high liquidity (see inflows figures).
GRIT’S ACTION: Own stocks and minimal cash.
4. COMMODITIES
Energy prices are in unchartered territory
The energy sector just did something that it’s never done before: over a 10 trading-day stretch it surged over 15% while the S&P 500 declined.
Last week we talked about the natural gas crisis (up 500% over 1 year in Europe) and how its effects are spreading. One of those effects is an increased demand for coal, which is a real bummer because coal is dirty and it also happens to be scarce at the moment (read: highest prices in a decade).
On the liquid gold side of things — brent crude oil futures hit a 3-year high on Tuesday. Meanwhile, the oil cartel (OPEC+) opted against increasing its planned output boosts, deciding instead to keep it at 400k barrels per day until at least April 2022.
GRIT’S TAKE: These shortages are really hampering international efforts to reduce carbon emissions, but this also means upward pressure on the demand for cleaner (carbon-neutral) energy in the future.
GRIT’S ACTION: Not chasing this trade. Already made +30% returns on energy this summer.
5. CRYPTO
Everything is right in the world: Bitcoin is above $50k & NFT sales are surging
On the lighter side of things, NFT sales numbers for Q3 are in and they are jaw-dropping: $10.87B in total volume! The craziest part is that the number of buyers is still relatively low: there were only 265k active wallets trading NFTs on the Ethereum blockchain last quarter.
Meanwhile, Bitcoin FINALLY made its way back above $50k this week (sarcasm — it took less than a month!) and the paper hands who sold at $30k are jumping back in at $55k!
I think we can all agree that the last month or so has been a bumpy stretch, but crypto has performed like a seasoned vet throughout:
S&P 500 = -2.53
Nasdaq = -4.14%
Ethereum = +3.97%
Bitcoin = +15.11%
Not a bad month for an asset class that got dumped by the world’s 2nd largest country a couple of weeks ago.
GRIT’S TAKE: We’re beginning to reach the intersection of “it’s still too early” and “too large to ignore”, which is what Bank of America analysts are now saying.
GRIT’S ACTION: Long Bitcoin & Ethereum.
6. ENTERTAINMENT
Grit goes Hollywood!
I’m happy to report that Grit will be making its big-screen debut soon! I’m currently out in LA filming Meme Economy: How the Internet is Changing Money!
It’s a documentary (directed by Chris Temple and Zach Ingrasci) that tells the story of the Reddit-fueled meme-stock trading frenzy that flipped the market on its head earlier this year.
It will feature a bunch of really cool people like Nathaniel Popper, NYT reporter, and Pro, the Dogecoin Millionaire, who holds $2.8M in Dogecoin and refuses to sell until he hits 10 million or goes broke!
GRIT’S ACTION: Come with me to the premier!
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