- Equity Mates
- Posts
- 📈 JP Morgan's note of caution | An advisor on crypto
📈 JP Morgan's note of caution | An advisor on crypto
Here's what we've been learning over the past week
Equity Mates
April 17, 2024
This week on Equity Mates
Hey there Equity Mate,
A very interesting phenomenon is unfolding with the wealthiest people in the world and it seems it is going to effect us here in Australia.
The children of the wealthiest tech billionaires are coming of age and making their mark on the world.
David Ellison, the son of Oracle co-founder and world’s 5th richest person Larry Ellison, is making a move to buy film and TV giant Paramount Global. It just so happens that Paramount owns Australia’s Channel 10.
We imagine in the coming years as the Zuckerbergs, Musks and Arnaults come of age, we will see this story emerge more. We have had children of billionaires for generations, but the children of centi-billionaires ($100 billion) have a completely different ability to impose themselves upon the world.
Depending on their success, we may be armed with a whole new argument for a wealth or inheritance tax on the ultra-, ultra-, ultra-high net worth’s.
Surely we can agree no child on earth needs to inherit $1 billion.
Anyway, before we get too far down that rabbit hole, you can hear us discuss this phenomenon more on today’s episode of Equity Mates Investing. And that is just one of 5 episodes we released this week.
Monday - Australia's Dividend Darlings, don't expect rate cuts soon & where we find information
Tuesday - Live: Ask an Advisor with Glen Hare - Property, Superannuation, Brokers, Insurance & more
Thursday - Adam Dawes joins for Pimp my Portfolio, TikTok's worst investors pt.2 & meet Channel 10's new (potential) owner
Friday - Uncovered: Hazer Group - A new way to create clean hydrogen
Tuesday - We’re tracking our spending - here’s what we found | PocketSmith
Your questions, answered
Stephen asked via Instagram:
‘What are your thoughts on cryptocurrency as an investment?’
We put Stephen’s question to Luke Laretive, CEO & Portfolio Manager Seneca Financial Solutions.
Book a call with Luke for professional investment advice.
Ignoring the fundamental principles of investing (i.e. you value something different to the prevailing market prices), crypto appears to be neither of the things it purports to be - an effective hedge against inflation or traditional stock or bond market returns (in fact, crypto has been highly correlated with traditional asset classes.)
From what I can tell, it's a leveraged exposure to declines in risk aversion, rooted in speculation, potentially fuelled by criminality and money laundering.
If you have a question you’d like answered, hit us up at [email protected]
This email is thanks to PocketSmith
Ren’s had a general frustration for a while with spend trackers - most have predefined categories, annoying automation that miscategorise transactions and no distinction between spending and investing.
So when we were asked to give PocketSmith a go, we were skeptical.
But we’ve been pleasantly surprised - finally a budget tool that has the flexibility and detail to give you true insight into your spending habits.
PocketSmith is Australia’s leading personal finance management tool. You can find out anything you need about your money: track progress, identify trends, spot issues, run reports, and plan ahead. You can also connect with Sharesight and your superannuation provider to track your overall net wealth.
If you’d like to manage your money like a pro, PocketSmith has a special deal for the Equity Mates community. Get 50% off your first two months of PocketSmith’s Foundation plan.
What we’ve been reading
Jamie Dimon says don't be surprised if the economy hits a wall
Jamie Dimon, CEO of JP Morgan Chase, is one of the most respected voices on Wall Street. So much so, that there is a small but vocal movement pushing him to run for President.
After reporting another bumper quarter for the investment bank, surpassing Wall Street’s expectations, Dimon used the opportunity to sound a note of caution on the economy. He’s not convinced we’re out of the woods yet.
In a recent letter to shareholders, he explained that JP Morgan was prepared for a wide range of interest rate scenarios “from 2% to 8% or even more”. How many of us in our personal finances have modelled what an 8% cash rate from the RBA would look like?
Dimon pointed to three uncertain forces that were keeping him concerned about the economy:
The ongoing geopolitical crises in the Middle-East and Eastern Europe
Persistent inflationary pressures from certain spending categories
The fact we have never felt the effect of quantitive tightening on this scale
This isn’t a cause for panic, but rather call to be cautious. We can all hope that the worst is behind us but we should prepare like there is more trouble ahead. Ensure we are building a cash buffer in case of emergencies and ensure any borrowing is stress tested at higher rates so we know we can manage if interest rates do go higher.
Why are so many young people getting cancer?
Globally there has been a notable rise in cancers of the gastrointestinal system - colorectal, kidney and pancreatic cancer - in people under the age of 50. What is concerning for doctors is that under 50 is usually considered early-onset for gastrointestinal cancer.
Today, one-in-five new colorectal cancer patients in the United States are under the age of 55. That is almost twice the rate in 1995.
This article from Vox asks why this trend is emerging. It covers a joint research project of the US National Cancer Institute, Cancer Research UK, Bowelbabe Fund for Cancer Research UK, and the French National Cancer Institute that will be collecting evidence from patients across US, Mexico, UK, France, Italy, and India. This truly is a global trend.
Beyond the gastrointestinal cancers, there is an emerging trend of more early-onset cancer.
The increase in early-onset cancers has become undeniable, replicated in study after study. A BMJ article published last year found that the early onset of 29 different cancers, including breast, stomach, and colorectal, had risen nearly 80 percent between 1990 and 2019 worldwide. Another study published in JAMA Network Open last August found that the occurrence of a wide range of cancers among people under 50 had increased between 2010 to 2019 among American adults, particularly among women.
This is a worrying trend for all of us, and here’s hoping this global research process can identify some specific environmental or lifestyle factors that are driving this trend. Until then, it appears many of the cancer society’s recommendations are simple: eat healthy, exercise, get enough sleep and avoid environmental contaminants like microplastics, air pollutions and toxins in everyday goods.
`