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23. Investing Outlook: Q2 2021


Hugh Sifu: [00:00:00] All right, guys, welcome back to Thoughts of a Random Citizen. I'm your host as always, Hugh Sifu. Today, we get to dive into what I love most, what gets my blood boiling and the opposite of that is investing. Pretty much just going to-- It won't be a super long episode. I'll touch a bit about what I discussed in the last version of the investing episode I released. I think I recorded it in January. It might have come out in February, but anyways, in where I see moving forward the rest of 2021 and beyond, and my strategies of where I'm allocated and how I'm operating. Still in arts factory, still birds and stuff around.

Actually, I was re-listening to a podcast just to make sure that they sound all right for everybody. I heard some birds in the background. It was cool. I'm digging it. Hopefully you guys are liking it as well, but without further ado, I will kick us off.

For the foreseeable future, the stock market is a bit crazy at the moment. it's going to be quite volatile as well. Value is obviously winning. In the last episode, I believe I was talking about how the overvalued stocks will obviously come back down to earth a bit and that money will transfer over to value stocks, which has held true up to this point, for sure. All of the growth stocks are in on us, which is great if you were ready, [00:02:00] but that also means that those growth stocks are back to those levels in which you might be able to snag up some for cheap again. That's what I'm looking to do.

I have most of-- Well, first off, I'll just caution. I'm not invested in anything at the moment that I am not willing to hold for the next five to 10 years. Everything that I have in investments at the moment, I do not plan on selling for the next five to 10 years. There's probably a few that I'm holding on for the next three years, but again, I'm expecting fully that the market is going to crash sometime, maybe not by the end of this year, but I just don't see how it continues the way that it has been.

With all of the retail investors out there, I just see a panic at some point in the future. With that being said, depending on the stocks, I would recommend ensuring, especially, especially if you are in stocks that are extremely overvalued, a hundred times price to earnings, 30 times price to book. That's just too much. Have short stops on them, make sure that you, they don't crash and you lose 90% of your money in those specific stocks. Besides that, I just, that's a word of caution. Just be smart with it. The whole I'm gonna throw money and then it's just going to go up thing is going to be a bit more difficult, especially when the market is valued the way that it is.

Again, I said that I see some opportunities in the growth side of the market because the growth side of the market will continue to grow, especially with all of the money being thrown in there. The only issue now is that the value side of the market has [00:04:00] caught up to those-- Not extreme valuations. I don't see them at that, that level yet, but they've caught up to where there is less undervalued stocks out there.

How I'm approaching this moving forward is a diversified, concentrated portfolio. I know that sounds weird because you have some people who like to have an extremely diversified portfolio. You have some people who just like the ETFs and then you have some people who run concentrated portfolios, but I like a bit of the in between.

I'm not a huge fan of ETFs because I'm just not I prefer to pick my stocks that I can see for myself that they are better value than somebody else doing that work for me because that's what I do full time. I am picking up quite a bit of undervalued growth stocks at the moment because growth, the growth side of the market has sold off quite exponentially. That doesn't mean that I don't have-- Majority of my portfolio right now, especially since it's been going up so much is value stocks. However, because the only places I see true value at the moment with the stocks that I'm looking at is on the growth side of things.

That whole concentrated, diversified aspect of it is there are a few stocks that I'm quite concentrated in with the majority of my stocks being diversified. I recommend that moving forward because I think that there is, especially if you're looking at the 5 to 10-year timeline, there is a lot of opportunity at the moment for newer companies, not brand new, but newer companies or some of my concentrated stocks are older companies that I see doing very well in the next five to 10 years and beyond to be honest.

[00:06:00] A strategy there that I just wanted to float out to people, there is no magic way to do it. If somebody says that they know a magic way to do it, they're lying to you because if we know one thing through all investing history is that people come up and make a lot of money doing something that's never been done before. People also make a lot of money doing things that have always been done before. There's no magic formula and don't let anyone tell you that there is because it's a game unlike any other. I guess a game's a bad way to put it, sorry, I just fell there. Game's a bad way to put it, but you just a be aware of that.

That's pretty much the way I see the market at the moment in just purely regards to value. I don't like diving into the nitty gritty numbers as much. I mean, I do dive into the nitty gritty numbers, but just talking about it, I mean, everyone should to do their own research. I'm not going to an abroad overview of the market dive into specific numbers.

Anyways, that's again, how I see the stock market side of things. I'm just not a fan of the bond market at the moment because I, there's not enough return. I can get more on most of my value stocks, which I typically have value dividend paying stocks lumped into one. I'm not really going to go for a value stock unless it's paying me a dividend, but that's goes hand in hand anyways.

I'm not a huge fan of the bond market. Especially considering, and I don't wanna say this, but especially considering the potential of the US losing its world reserve currency status. I'm not huge on the US dollar. I'm not huge on the US government and buying bonds from them [00:08:00] and that goes for really any governments out there. I'd rather buy private companies that even if shit does hit the fan, guess what? That company is more likely going to be around in the future. Not saying that the US government's not gonna be around in the future, but that company's gonna be paying me a higher dividend in the meantime to hold their stock.

There's the bond market. Finally, crypto, I do want to say that I was a bit incorrect on my initial statement especially in regards to GBTC, Grayscale Bitcoin Trust. I've sold over half of my position on that. The only things that I'm holding on that now is my IRAs. I still have some position, a very small position in my IRAs accounts. I'm cautious on GBTC. There is a potential, especially if they do convert to an ETF, which I was also down on for it to go back to the net asset value. It is at quite a bit of a discount right now.

I'm reevaluating whether I'd buy back in just a small amount, but I'm more so inclined to just hold actual Bitcoin on an exchange. it's going to be less safe, but with, if you can find the right exchanges again, do your research. I would just rather have thatt Bitcoin in an account in which isn't regulated. Essentially, the problem I find with Grayscale is that if you are trying to get out of it in which we just saw the other day, this is the 15th of May, which just saw the other day that it crashed [00:10:00] what 15% in a day? If that was on a Saturday, you can't get out of Grayscale if it crashes 50%.

I'm not one, I am long on Bitcoin, so I'm not trying to sell and buy and sell and buy. I'm not a day trader. That's not what I'm about, but at the same time with a volatility of Bitcoin, if it goes below certain markers that I have set, I'm going to want to get out because I see more downside in the near future. You don't really get that flexibility with Grayscale. I caution Grayscale in that regard. I'm not a huge fan of other cryptos. I have exposed myself to a bit more of Ethereum. I've changed a bit on that, but again, it's essentially switching decentralized.

Bitcoin so good because it's decentralized. That's what it is. It's a store of value. It's decentralized the government doesn't get to control it and print more of it or less of it. Ethereum is as well decentralized, but it's not run by the individuals, it's not run by me and you, who could be a part of the say of Bitcoin if we want it to be, we can all do that. Ethereum is essentially decentralized because it is not run by a government. However, it is run by practically a board of people.

What's the motive of them promoting the best interest, them meaning the board of Ethereum, as opposed to the government promoting the best interest? You're trading, the grass is always greener, I guess, but the reason I like Bitcoin is because it is an actual decentralized. [00:12:00] It doesn't have just a group of people dictating what to do with it, which is what Ethereum essentially is.

I mean, mostly I'm in it because it is instead of being that store of value, which is the big topic of Bitcoin and why it is so good, it enables secure records on a potential new base layer of a web, just google Web 3.0. It's essentially a more centralized and secure cloud-based internet. That's what Ethereum's main objective is to do. It's very in-depth and I'm not going to claim to know all the ins and outs of it, but if you are interested in any more of that, just google Web 3.0, and you'll understand a bit more of the importance and opportunity that Ethereum generates.

On top of that, it's also been beating bit Bitcoin this year. Obviously there are a lot of things that have been beating Bitcoin this year, but it's the one that has the most potential value.

If you go back way back into the early 2000s, and there were all these new dotcom bubble and all these new aspects, there was like two won, Amazon being one of and even as crazy high as it got, this goes for the stock market in general, as crazy high as it got it still crashed back down to $4, give or take at the end of the crash of the dotcom bubble. Even if, these at assets are going up, there's probably going to be some pullback and just be available for that pullback.

Back to Ethereum, at the end of the day, if a lot of the bear cases right now are saying that government regulation [00:14:00] will hurt the crypto market. While that is true in the near term, I believe that it will only strengthen it in the future, which I believe I said in the year opening, investment analysis. That's where I'm at on crypto. There is obviously money to be made. I am in a decent amount of crypto, but again, those are one of those things that it's just more of a gamble.

There's not, especially with all these fricking Shiba Coins and freaking Doge Coins. There they're nothing like what was a few years ago in 2017 or whatever. There was that one coin where the lady went around and it was a huge craze. Then she just literally disappeared and robbed people of billions and billions of dollars. Like, do you not see that exact scenario playing out with these Doge coins and these things? I mean, the crypto market is dangerous because it's Reddit on steroids and meaning you got one billionaire tweeting something, and then the market crashes.

I know China's regulations had a lot to do with that as well, but I mean, you don't have an educated stability behind the crypto market and meaning you don't have the people who actually understand finance, investing in crypto, as much as you have people who don't understand finance and just want to make that quick money. All the power to him, because a lot of people are doing that and good for you, but that's why I caution, caution, caution the crypto market. There is money to be made. I'm doing well in it knock on wood. I just knocked on wood. [00:16:00] You just got to be aware of that side of things.

That's pretty much it for the foreseeable future. I guess predictions, I guess I'll make up some predictions. If I still do see Bitcoin going up to a hundred thousand by the end of the year, whether I'm right or not. I don't know. I was listening to a podcast that I really like called InvestTalk, I'd recommend checking it out if you like strictly investing, investing, investing. One of the guys on there who is fantastic was saying that he sees Bitcoin dipping in the near future before possibly rising again towards the end of the year. Maybe you look for buying opportunity because I agree with that, but I do do still see it going up to the 100,000 mark.

I see opportunities in Ethereum as well, but again, I think that there is a chance that it still does outperform moving forward. But again, I think the main upside of that would be that Web 3.0. Go into that. You can look it up on your own if you really are interested.

For the stock market, I've already covered it, but for predictions, I think that the tech side of the market will come back down to earth as it has been. I think that will continue. I opposed to most people actually do think that growth will have a quicker kickback than we think. That doesn't mean that tech growth will come back, but I do think that growth will come back quicker than most people think.

I still think there is a lot of good play, just holding dividend value stocks as well. Just to throw out some of my favorite companies at the moment and moving in to throughout the year [00:18:00] and beyond, I really like Tilray, I absolutely love Desktop Metal, which is a 3D printing company.

Then rare mining, rare minerals, rare earth metals. I think that those companies are going to be on the up and up, especially if we get more regulation from China or against China, I guess if you will. I think that rare earth metals will be, especially outside of the Chinese companies, which have like a 90-some percent around the world of those, companies. Outside of those Chinese miners will be quite beneficial moving forward, but that's pretty, that's going to be difficult because of the upfront costs to get those mines going. Lastly, there's a few that I want to throw, but if I can just throw one more, you're probably too late on it, but Kansas City Southern Railways, I just have a sweet, a soft spot for that guy.

That's pretty much it though. Guys. I hopefully you enjoyed, it's a bit of a longer episode, but I could keep going for a while on investing. I do like talking about it, but hopefully you guys enjoyed as always feel free to check out I'm going to spend the next week updating a bit of that. But by this, by the time this episode comes out, it will already be updated for the most part. If you have a question that you won't played, you want to get in contact with me, that's the way to do it,

Also, I'm quite excited that we finally have our first interview coming out with an excellent Bear Grills-Esque [00:20:00] gentleman that I've met here in Australia, Cockatoo Paul. He will be sitting down with me this week and we should get that episode out for you guys a week after this one airs, maybe even earlier, because I think this one might be a few days behind, but that should be coming out.

He's got quite a bit of a personality, so it should be pretty fun and interesting if you like a conversation that can go anywhere. This is the one that you're going to want to tune in for. He's pretty much I'll live my dream life, which is doing whatever the hell these wanted since he was like 18. It'll be a really good conversation for those who don't necessarily just want to walk the path that is placed in front of them. It's an alternative view to a success. Hopefully you guys can tune in for that and I will talk to you guys next week on Thoughts of a Random Citizen. Have a good one.

[00:21:07] [END OF AUDIO]

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