Google just banned cryptocurrency ads. I want you to think of this action, not in a simplified, superficial manner, but as a sophisticated, prudent investor and speculator.
For the world’s No.1 advertiser, that’s a big move and seems counterproductive, unless you consider the alternatives.
Other clients, such as big banks, are pressuring Google to stop cryptocurrencies from getting bigger because they’re seriously scared of mass adoption.
Personally, I am taking a serious look at what’s going to happen next, before making a move, but this signals to me that Wall Street interests are becoming dead-serious about cryptocurrencies.
We must be able to outsmart the consensus in order to outperform in 2018 and beyond.
All investors can’t beat the market because they are the market.
The No.1 reason most investors fail is because they hold onto perfectly-good investments for longer than 6-9 months, on average.
This is preposterous; since for a company like Sysco, it takes much more than that to double, but it does so with far less risk than an average food distributor.
Sysco is a great business, but at this price, it is not a great investment.
Here’s one of the best examples, though:
This is a chart comparing the S&P 500, which anyone can buy and forget all about beating the market, since it is literally “the market,” and see that over the past 10 years, Cardinal Health (NYSE: CAH), one of my biggest positions, has underperformed dramatically.
Investors are worried about the opioids pandemic and its negative effect on this top drug distributor, so they are selling their shares.
That’s the consensus. Now, a critical thinker starts to raise 4-5 questions to begin with, which help him understand what to do next. First of all, (1) will the opioids problem stay in the news forever or will it go away, (2) has the company’s competitive advantage been hurt, (3) are they doing anything about it, and (4) how cheap is it, (5) compared with its historical averages?
You see, to achieve superior results at investing or with anything you put your mind to, there must be independent thinking carried out.
None of us can do it on a world-class level with all of our responsibilities, so we should and indeed strive to, put capable people in charge of tasks, which divert our attention from focusing on the highest-priority tasks, since that’s where our expertise gives us an off-the-chart return on investment (ROI).
A great Hollywood actor, for example, can’t worry about finding a capable costume designer himself or make-up specialist on his own, when he should concentrate all his energy on embodying his character.
He leaves all of the elements, which will surely impact his overall performance, but are not within his sphere of competence, to others.
You must do the same.
There’s a niche out there, in which you can excel and are better equipped, intellectually, physically or otherwise, than most of the population. Your best chance of becoming wealthy is to find it.
The same goes for your portfolio. My specialty, I’ve found, is patience. I’m able to sit and wait for investments to mature for far longer durations than most.
Take a look at this chart now:
Over the past 40 years, Cardinal Health, the company, which in the previous chart above has been lagging for 10 years, has been more than 100% better than the market.
If you’ve done nothing but hold it, instead of tracking the index, your results would have been twice as good, and as the chart shows, right now would be a buying opportunity, not a selling panic.
As you can see, since 1991 up until 2007, Cardinal Health has been a much better investment than even Stanley Black & Decker (NYSE: SWK), a phenomenal business in itself.
Patience, not anything that is outside the skill set of anyone, has made all the difference.
Cardinal Health is used as an example, but I personally am an investor for a number of months, between $61-$66.
Now, cryptocurrencies are definitely not long-term, stable, mature, and profitable assets. They’re a short-term, unstable, immature, and non-profitable speculation, which is why most investors will never touch them.
That’s part of what made Bitcoin explode in 2017. For the 1st time, individuals, who weren’t die-hard anarchists or tech-junkies, saw the value of a decentralized currency technology.
Right now, investors are loving the U.S. and feel that with the tax cuts and the deregulations, all of America’s problems are behind it, so they are willing to pay hefty premiums for U.S. businesses, while discarding emerging markets altogether.
I’m looking at opportunities in South America, specifically Brazil and Argentina, because no one else is.
In the U.S., not even one institution is interested in cannabis, yet this is the fastest growing segment of the economy, so that’s where my eyes are focused.
Remember, patience rewards long-term investors of the best businesses in the world, and in the short-term, the stock market rewards pioneer contrarians, who are able to capitalize on opportunities at the beginning and stay LONG for a few short years.
Major updates coming next week – it’s going to be a tumultuous 2018, and your emotional discipline will be tested many times – flex your mental muscles because we’ll go through several jaw-dropping moments this year.