Dennis Lewis 0:02
Hello, everybody, welcome. Hi, I am Dennis Lewis. This is crypto trader news. And for the second week in a row now we I am really thrilled we’re have Stuart Pritchard from Blockman Capital on. He’s the expert. I’m the the silly guy asking questions that, you know, hopefully I can stand in for some of you guys, I know that most of you out there are going to ask a lot better questions than me. So if anybody has any questions, be sure you know we’re live so you can put them on the YouTube comments or you can put them on the LinkedIn comments.
And we can pull the car questions up here at live onto the live stream and answer them. But yeah, I’m really thrilled to get this collaboration going. It was all over the news wires today. In fact that CTN is collaborating with black men capital. They bring the brains we bring a bit of the reach in and the audience And, Stuart, welcome one more time.
Stuart Pritchard 1:03
Thank you very much indeed, Dennis. Pleasure to be here. So looking forward to this.
Dennis Lewis 1:07
So yeah, so my idea with these is we’re going to and this is an experiment like everything. So these things can change over time. But we’re going to try and give these live streams a bit of a structure so that they’re not completely all over the place. And the first order of business is should be just let’s talk about the markets a little bit. What are they? How was this last week? You know, what’s, what’s going on in the crypto world with trading and and, you know, tell me has everything gone down into the tubes are we about to take off and hit the moon? I don’t know. You’re the guy who knows.
Stuart Pritchard 1:42
Okay, so it’s been, I think, to coin a phrase from the sporting world, a game of two halves over the past few days. And even if we look at June as a whole, I’ll just share my screen here. If you’re able to share that Then step four, will be great. What what I’m looking at here I’ll narrow the range in to begin with. What I’m looking at here is a chart of the price of bitcoin, looking at a 15 minute chart, and we’re looking at one of the major exchanges by Nance, which is fairly typical for trading Bitcoin. And what we can see is, here’s the start of the month here beginning of June, the price was trading at around about 9450 bucks. We’re currently trading at about 9450 bucks.
So we got off to a fairly strong start on the second of June. We can see here that the price escalated very quickly. We’ve got the volume here on the x axis, and we can see the price really got off to the races. Jumping up here as high as sort of 10,400 bucks before pitcher lating on the very same day, coming right back there. And so a bit of froth came to the top of the coffee and it was immediately swept away in the afternoon. And really since then it’s kind of been a similar story. The price has tried to gain a bit of traction running up nicely.
And it looks as though it’s into a nice upward trend, then gave it up again, back down here and, and then over the past couple of days really Monday morning in particular, what we’re looking at here is the early hours of Monday morning here in the UK, the price really gave it up and dropped down as low as sort of eight nine before finding a bit of support and recovering back up to this infamous 9450 as it stands now So the reality is this. It appears that there’s something to have a go out here you know, if the price has jumped up like this, is that a chance to make profit if the markets running up nicely. Is there a chance to make profit? The answer is obviously Yes.
But But the reality is, most trading takes place with momentum. So if the markets are moving in a particular direction over a period of time, it tends to make for slightly easier trading circumstances then perhaps this sideways movement punctuated by volatility. So, there’s opportunity there, but it’s really not as as simple as you might expect. So that’s kind of been the story of June so far, as I say, a bit of a game of two halves the upside the downside, and we’re actually sat somewhere in the middle. So not an awful lot to learn an awful lot to report at this stage, unfortunately. But normal screener.
Dennis Lewis 4:50
Yeah, okay, so was the, the drop a few days ago that kind of coincided with the equities market did not really so
Stuart Pritchard 4:58
so there’s such a degree of correlation now. Okay, so so there is a degree of correlation. And there’s also an inverse correlation. So what we’re seeing is trigger events. So global markets on Monday morning had a bit of a reality check. You know, just before the weekend, you’ve got the UK releasing 20.4% down GDP in April. You know, Mark, it’s kind of just took a bit of a stock check and went, Oh, my goodness, yeah, we’re not out of the woods here. So everybody’s kind of coming out of lockdown in Europe, to varying degrees at varying speeds. But the reality is that it’s fair to say that we’re not out of the woods. And I think Monday was a real reality check.
It was just a guy’s you know, the, the economic downturn here may not even be realized. And it kind of harkens back to the credit crunch time Joe 2008 2009 times when it felt like oh, we played it out. Now. You know, The markets giving it up when it’s going to give it up and we’re in this recession and you know, yada yada. And then it kept on going down and kept on going now. So it had that kind of feeling Monday morning it triggered Bitcoin to drop down global markets, as well as the crypto markets have recovered back up and stabilized footsie up about six to 1650 something like this after dropping back below the 6000 sort of support line, what was a pre resistance line? So overall, there is some correlation, but what we normally find is after the trigger event, which will be Monday, they then tend to go their own direction. So Bitcoin kind of play its own game now, compared to global markets, in my opinion. So
Dennis Lewis 6:44
yeah, I kind of felt like that as well. That it’s whenever something whenever there’s a big noise, you know, a big crash, that kind of a boom, then everything kind of does the same thing. But but the echoes of that boom, aren’t The same it’s not like you know it, you know, we hear boom and we all run for the hills. But then the people that have bitcoins and Ethereum in their pockets, they say, well, well wait, I don’t have to go quite so far into the hills or, you know, maybe I’m, I’m better off, you know, and that’s going to kind of segue into our topic for today. I mean,
Stuart Pritchard 7:21
that’s a great analogy that I love that that the the sort of ripples the Yeah, the the sort of Aftershock tends to not be quite as great in the crypto market because you know, as we’ve touched on I think last week, you know, you’ve got global markets have exposure to everything, you know, to oil to airline stocks, travel stocks, hospitality, you know, everything that’s been hugely affected by by the current situation and Bitcoin simply doesn’t have that exposure you know, kryptos don’t have that exposure. So it’s it’s there’s always going to be knee jerk reaction I was fearful oh my goodness, you know, markets taking the downturn, back to cash, everybody hitting stop losses, getting out of trades, this type of thing, but you’re 100% right that then everybody in Bitcoin or in crypto kind of goes, and we don’t really get exposure here to these issues, life can return back to normal and that kind of happens.
Dennis Lewis 8:12
So this is a great way to segue into today’s main topic and the main topic today is it. I was reading Business Insider the other day and I sent Stuart this article and it’s a guy named john Hussman, who is a hedge fund guy, I guess, or something like that, you know, he’s moving a bunch of money and the title of it was, there’s no natural limit to the stupidity of Wall Street. And notorious market bear breaks down why we’re not witnessing a recovery and warns that extreme valuations suggest a 66% drop.
Okay, now, maybe that is a I mean, you know, it’s Business Insider, they weren’t, they want to get clicks, they got my click Okay, so so I’ll take my hat off to them for that they did a good job on their clickbait there. But then, you know, he goes into quite a, you know, an argument and analysis of, of you know why he sees this possible real, you know, another 60% you know, drop in equities markets just around the corner, and you read a little bit in his history isn’t so bad. I mean, he, he’s, he found a few of them in the past, but and he was right. So that was the, you know, that kind of got me thinking, Well, you know, maybe equities and stocks are riskier investment right now then crypto and, you know, what do you think stored? Is it? Could there be something to that?
Stuart Pritchard 9:42
Yeah, I mean, you know, I think as you mentioned, he’s got a previous track record that can’t be ignored. You know, he so bears notoriously after the event or, you know, look like heroes because you know, that they’re kind of calling the crowd Beforehand, then it happens for long periods of time, they tend to be sort of talking a little bit into the wind or touch until the event happens. And history cyclical history will dictate that all markets have corrections, they have the boom and bust that they’re cyclical. So if you if you are a constant bearish commentator, at some point, it’s going to come true. That’s the initial view. But however, this guy is very credible.
This guy really has made the calls and importantly, he’s made the calls it he’s actually put a value to those calls that are pretty much borne out so he knows what he’s on about. What he’s also done is he’s got proprietary calculations that he’s formulated for himself about things like market capitalization, this type of thing, and just from his opinion, and you can kind of understand where he’s coming from when you start looking at the numbers. He believes that, particularly US stocks, the s&p 500 are particularly overvalued at the moment. And outside of the correction that we’re seeing due to the Coronavirus outbreak that they argue a correction anyway, that also is supported by the idea of We Are we were on a very extended cycle now, you know, typical financial cycle is eight to 10 years, between sort of the trough and the peak, the next sort of started the collapse.
And we’re now sort of, you know, getting close to 1112 years now. So, it’s, it’s, there’s a couple of things in in his favor there. One of them is the cycle. And the other one is that they do, you know, pretty much overvalued. So, coming back to the point you made are stocks and shares riskier than crypto currencies, and that they’re actually two answers to that. In all fairness, Dennis, the first answer is By the inherent nature, stocks and shares are their exchange driven they are very heavily regulated and therefore there is a degree of safety because of that regulation you know nothing could really be done behind closed doors or are out in what’s called over the counter transactions
Dennis Lewis 12:23
Do you see a famous Pink Sheets and all of that yeah
Stuart Pritchard 12:26
all that type of thing you know dark pools and you know, yada yada again but but but
Stuart Pritchard 12:30
the reality is for Joe Bloggs, you and I go in and buying shares, it’s a heavily regulated environment. And everything’s You know, there’s a lot of Counterparty there’s no counterparty risk from our side. If we want to go and buy, let’s say, Barclays shares, we’re able to do so very readily, and in a precise way, when we talk about cryptocurrencies, what’s very attractive about cryptocurrencies is also the thing that you could perceive to create to have 100 level of risk. And that’s the fact that they’re decentralized. And they’re largely, if not totally unregulated. So, therefore there is, I guess, an inherent risk. But I believe that that’s very different to investment risk, and then some which comes to the second part of the answer, which is investment risk.
For my for my mind, there’s absolutely no difference between trading stocks and shares and trading cryptocurrencies. Though there’s another part to that there’s a volatility side of things. And if you’re trading stocks and shares now keep talking about Barkers. I’ll explain why in a minute. Because it’s a bread and butter. We know who Barclays are. They might move by half a percent quarter of a percent per day. In extreme circumstances, as we’ve seen over the past couple of months, they may move by five up to 10% a day but very, very, very unlikely. And there’s also breaks a differential exchanges when when they hit certain move, they get suspended from trading 15 minutes to the order book sort of played off and things resumed.
So there’s there’s a lot of controls in trading stocks and shares, especially liquid and the Dow the footsie 100 in the s&p 500. However, volatility aside, that’s where they differ. If we look at risk, there is very, very little difference. And I’ll explain why. So, I’m just going to share my screen again here, Dennis, if that’s okay. Hopefully everybody can see the same chart that we had before, which is the price of bitcoin.
Is that okay for everybody? Yep. Yes. Good. Cool. Cool. So what we’re seeing here is effectively a two hour chart now, and what we’re looking at is 2020. So basically what’s happened this year, we can see the price of bitcoin running to the upside to begin with catching a cold here about mid February dropping away pretty sharp until around about sort of mid to end of March and then recovering up quite nicely. So what we see here is a reaction to the Coronavirus outbreak and the recovery backup afterwards. And in between times pretty choppy. This is the volatility. This is prices going up or down in a fairly fairly quick order. What I’m going to do now is compare this to Barclays shares.
We’ve just been talking about them. And it just it’s fairly easy then to just have a bit of an idea as to what’s going on. So this is the same timeframe. The orange line is the Barclays share price and the other line is is the bitcoin price. What we can see is a bit of correlation around about here, the middle of February prices drop away and then subsequently a bit of a recovery back up important A vast, vast difference on outcome from the start of the year, if you put all your eggs in one basket, which we would never advise, but if you had, and you just put it in Bitcoin, by now, you’d be up around about 29%. So you put 10,000 bucks in Europe, you know, 2930 bucks great over the course of the first six months of the year, if you done the same with Barclays shares, you put 10,000 bucks in, you’d be down 32 and a half percent by now.
So, if we’re talking about risk investment risk at this stage is just as a snapshot for 2022. Very, very different outcomes. And you could conceivably suggest that for 2020. Barclays has been a much greater risk than Bitcoin to actually trade. Now in between times, the movement in Barclays we can see here, besides these sort of strong moves down as the Coronavirus outbreak kicks in, have been relatively modest, very, very small moves, little bounces up and down. Where’s Bitcoin you can’t deny it, you know, it jumps by five to 10% per day regularly. There’s very few days go past the Bitcoin doesn’t make between three and 5% as a move, it’s fairly typical.
So if you’re trading and that’s what we do here at brotman you have to be nimble, you have to have very stringent risk management and you have to be on your toes watching the markets 24 seven, if you’re investing looks great, doesn’t it? You know, nice overall long term uptrend up 30% 25 No, 29 and a half percent for the year so far.
Stuart Pritchard 17:44
So going back in it in a couple of that come back off that chart for now. But But yeah, go back to the original question, which is riskier. Well for 2020 buckets simples up.
Dennis Lewis 17:57
Yeah. And if you take into account You know, Mr. What’s his name? Hussman here, who says there may be another 60% downside to the equities market then you start saying wow there you know there’s a you know, maybe maybe equities is a really bad thing and I should stay in cash. But then you say But wait a second hold on we have you know, Mr. Boris Johnson and Mr. Donald Trump and company and they’re just printing dollars and and pound sterling like, like all get out right? I mean, you know, they’ve gone hog hog wild crazy as they would say back in New Mexico where I was born.
Printing money You know, that’s not happening in Bitcoin that’s not happening in aetherium they’re actually making less Bitcoin right now the supplies going down. You know, you start adding these factors together, and you know, somebody could make a reasonable argument that, you know, while it’s true that you i’m not i’m not ever gonna To say that grandma should be putting her pension money into, you know, into into crypto.
But But she shouldn’t be putting it into the stock market either probably, you know, she should be, you know, putting our money into something that’s going to give her, you know, keep her alive and healthy for the rest of her days. Right. unless she’s got lots and lots, you know, unless maybe she’s the, you know, Queen Elizabeth, and she’s got plenty to play on the markets, right?
Stuart Pritchard 19:27
It’s for sure. I mean, the reality is that you’ve touched upon almost everything there that that’s, that’s correct. If you are investing, it’s about a balanced portfolio and that balanced portfolio should kind of reflect your attitude to investment risk. If you are, you know, more tolerant end of the risk matrix, then you do want to be looking at shares and you do want to be looking at cryptocurrencies to form a fairly substantial part of your overall investing. portfolio. I’ve touched on Barclays there, there are other shares that that are going to be performing very well during these times, you know, household goods, supermarkets, online, supermarkets accardo, this type of thing, and there are going to be shares that are in the doldrums, you know, for obvious reasons, airline stocks, etc. So, it’s about balance.
And if you’re at the tolerant end, absolutely cryptocurrencies, and stocks and shares should form the major part of your portfolio. If you’re at the slightly I think the example you gave was, what was the sort of morale of the elderly lady with perhaps a decent size? Perhaps a different attitude towards investment risk? Obviously, you would want to be in more sort of managed unit trusts, you’d want to be in cash instruments, you’d want to be in high interest accounts, this type of thing you know, you may still have a small proportion of your investment portfolio in shares and cryptocurrencies. But but it’s just about your risk profile and about your time horizon. If you’re looking for very short term liquidation of money, you know, you need to just be in a high interest account.
If you’re looking for a more mid term to long term play, then you can suffer a little bit more at the other end, you know that the investment risk going back to Barclays shares, I don’t want to belabor the point, but we saw the chart there, you know, that they got down as low as sort of 85 pence. Now, at 85 P, if your time horizon is two or three years that you don’t need the money by Barclays shares, you know, are they going to be at five a forever? Absolutely not. Could they still drop down to 50 p 60. p Absolutely.
But But you know, the longer term view of this, as has been seen time and time again, with market corrections, the price will come back. So if your time horizon is longer, two to three years plus, and you’ve got a tolerant attitude to risk that absolutely should be unstoppable. shares and you should be in cryptocurrencies. Cool.
Dennis Lewis 22:03
Well, and I’m not going to go any further on that because we’re foreshadowing a bit. I think next week, we’re going to have something really exciting to share with people that I know that Bachmann’s building where my team is helping out. And we’ll, we’ll probably be talking about that next week. So, you know, Stuart, any kind of recommendations on the short term right now, are there anything going on out there in the markets that you know, because you’ve talked about Bitcoin and we’ve talked about Barclays, but you know, crypto is a big is there’s an awful lot going going on, and there’s a lot out there anything any secret sauce or anything that you think that people could? now’s a good time to look at?
Stuart Pritchard 22:44
I think the the so the answer is as per the charts of Bitcoin, to make a call that something’s going to really accelerate and jump out of the out of the page right now. I think we’ll be wrong. I think it’s a Say, put your put your eggs in this basket would be wrong. I think the honest answer is, this is a great opportunity markets are moving a lot but you have to be nimble, you have to be very sort of you know the watching things you have to have stringent risk management and discipline. So the takeaway from this is not so much by Bitcoin because it’s the next big thing and it’s great.
I think that there’s a lot of opportunity on the downside still at the moment, I think Hussman is quite correct there that the you know that there is the scope there. So I think there’s opportunity I’ve identified a couple of levels there nine six as resistance or Bitcoin by the way I talk about Bitcoin because that’s what we trade you know, here a block on we’re cryptocurrency that that’s we’re about, and most people will be aware of Bitcoin. We’ve got a nice little range there at the moment. If it drops to about 899 thousand and holds there, you’d be buying in you know, you’d certainly be having a go at that stage.
Getting the limit set for nine, six. So you know there’s a potential nice uptick there really, you know, you’re talking about sort of seven and a half percent, seven, seven a half percent, fairly easy money to make. If we get a drop back down to 9000, if it breaches nine breaches the eight, nine, it could drop quite a bit further To be fair, but but I think if it dropped down there, and you had a buy order in place at nine, sell it back at nine, six, you’ve got a nice seven and a half percent there. So, so that’s what we’re thinking, you
Dennis Lewis 24:31
know, and you say that and, and and people that are in crypto, they just kind of take that kind of is, uh, yeah, that’s that’s kind of the way things go. Yeah, that’s, that’s a good idea, you know, and then it don’t even blink their eyes hardly. But I mean, you know, in the real world, I mean, you know, you say, Oh, yeah, you could do this and maybe make six 7% in a week or in five days or in a day, people would go crazy. I mean, you could just do it.
Stuart Pritchard 25:00
Every day, I think I think after. So my background for years and years was in traditional stocks and shares, footsie 100 chairs to be fair. And what was really exciting was how fast kryptos move. And that’s really what got me into it in the first place, because it’s great. But you are right, I probably got a bit busy myself that I met seven and a half percent, you know, I know, I know, seasoned investors, that would be incredibly overwhelmed, to hit 6% on an annual basis. And to hit that consistently, they’d be overwhelmed. Whereas we’re talking about doing it as you say, maybe four or five days. So that’s not to say that the other side doesn’t also hold true and I’m a great believer in balance and talking about risk.
No talking about it, definitely the price can go from nine six back down to 9000 just as quick as well. So it’s that that’s what I mean about risk management. So what a lot of people seem to miss in crypto currencies is trading Strategy a trading discipline and stop loss orders which are automatic sell orders if you’re long of the market so if you get in at nine and the price goes up to nine to put an automatic sell order by Nance or bit Mex or whichever exchange you use, let’s say 9000 bucks again, that way there’s no risk the price keeps it up and drops back down through you haven’t taken a loss on the trade and that’s what a lot of people miss. I know a lot of people buy bitcoin but not a lot of people seem to sell it or trade it they seem to buy it and just hope for the best they don’t seem to the sort of like
Stuart Pritchard 26:44
I’m sorry, man. You’re talking right to me, I’m guilty as charged, put it any particular ways guilty in reality, you know, we deal with so many people that have got exposure to to cryptocurrencies, and when the goings great, the goings great when the going is not so great which it can be equally They tend to just where all the pain rather go Do you know what I’ll get out of this I remember our own Bitcoin back on March the 12th. We were looking at the chart just now and the price gave it up from 8000 bucks down to four.
We got kicked out at seven eight. Okay, we’ve taken a small loss 200 bucks per coin loss but you just sat there them watching it drop and drop and you think well the lower it goes the more Bitcoin I can buy for my my buck. So but but it’s only if you’re out at seven eight, you know. So so he so key is the key is the takeaway, again, is discipline and have a strategy stick to it, get your risk in place and get your limit in place. Be happy with the profit you’ve taken and and give it a go. So yeah, it’s it’s an interesting markets and fun market.
Dennis Lewis 27:48
I totally agree. I think we’re really good for today then, Stuart. I think this went really well. We will have an exciting topic for next week as well. And Yeah, thank everybody for signing in. We haven’t had any live questions come up. But if anybody has questions for us, they want to, you know, they want to get Stuart’s expert opinion.
We could have mine too but don’t don’t trust it for anything by any means. Just if you want to talk marketing or business then maybe we could we could have a go if you want to talk trading and investing. Don’t listen to Dennis. Okay. You listen to Stuart. He’s the guy. And, yeah, we’ll be back next week, same time, same bat channel. And yeah, thank you, Stuart, for being on.
Stuart Pritchard 28:36
No problem at all. Dennis, thank you very much for having me. I really appreciate it.
Dennis Lewis 28:39
Thank you. So let’s talk to you next week. Okay, cheers, everybody. Cheers and
