M&M update (Jan 2018)

1200px-Plain-M&Ms-Pile

To us M&M’s are a real pain in the butt – and we are referring to macro & market questions not the chocolate snacks leading to adorable love handles. We get asked M&M questions all the time but have never come across a coherent framework that would really allow anybody to make reliable predictions. Here are a couple of conclusions that we are quite certain of when it comes to M&M forecasts. First, they have as much predictive power as a coin toss. Second, they do not make a material difference to long-term, secular investment themes that we are focused on. Finally, most investors, i.e. Mr Market, still pay attention.

The latter fact should not even come as surprise when we remind ourselves that Mr Market is not an imaginary higher being but humans (mostly institutional investors) like you and me, who have to answer to their bosses. And many bosses like to ask questions that come up on the short-term horizon… impact of Brexit… timing of QE tapering and rate increases… Trump… NAFTA and the wall… China hard-landing. We don’t agree that time is well spent trying to quantify the short-term impact of those events, but we can relate to the dilemma faced by all the market lemmings out there.

Hence a honest disclaimer: By disregarding our M&M updates, you will not miss out on any useful insights for being a high-conviction, long-term investor. But we’ll nevertheless put in some work to provide you with our thoughts on an ongoing basis. Continue reading “M&M update (Jan 2018)”

The REAL disruptor: Blockchain, not Bitcoin.

Blockchain

One of the hottest topics these days are cryptocurrencies (“cryptos”), such as Bitcoin. The noise created by cryptos is unfortunately currently stealing the thunder of its underlying technology, the so called blockchain.

Cryptos are one of many applications that can run on Blockchain technology. Put simplistically Bitcoin is to Blockchain what Email used to be to the Internet. Which means cryptos are one of many viable and useful applications on the Blockchain but not necessarily the most impactful nor commercially meaningful one, although the jury is still out on this.

Moreover, we believe that Cryptos are potentially close to peaking in terms of the “hype-cycle”. However, we are only at the beginning of grasping the wide-ranging potential of the underlying blockchain technology.

While this notion of “Cryptos: not so sure” vs. “Blockchain: disruptive” has already become somewhat of a consensus view amongst many academics, tech-entrepreneurs and venture capitalists, we’d like to share a couple of simple insights into the discussion.

Continue reading “The REAL disruptor: Blockchain, not Bitcoin.”

The Debate on Bitcoin and Cryptocurrencies

Bitcoin bubbleBitcoin, Ethereum and other cryptocurrencies have seen an astronomical ascent in the last years, culminating in an extraordinary rise in 2017. As to the reasons behind this unprecedented rise, they actually seem far less nebulous than the identity of Bitcoin founder Satoshi Nakamoto: good old ANIMAL SPIRITS. However, the sustainability of the rise remains one of the most hotly debated topics of the year.

All this has many people asking us to opine on the whole cryptocurrency landscape and determine whether or not we are just in a bubble here – and this is something that we here at Blackbird Capital have debated vigorously as this isn’t an easy topic to come to a landing on. So to put simply, let’s start by breaking down the arguments for and against bitcoin…

Continue reading “The Debate on Bitcoin and Cryptocurrencies”