{"id":56808,"date":"2022-01-11T10:41:44","date_gmt":"2022-01-11T15:41:44","guid":{"rendered":"https:\/\/www.technologyinvestor.com\/?p=56808"},"modified":"2022-01-11T10:46:02","modified_gmt":"2022-01-11T15:46:02","slug":"stocks-that-pay-a-real-cash-dividend-have-charm-paul-krugman-explains-why-i-dont-like-bitcoin-autocrats-are-winning-saying-no-is-good","status":"publish","type":"post","link":"https:\/\/www.technologyinvestor.com\/?p=56808","title":{"rendered":"Stocks that pay a real, cash dividend have charm. Paul Krugman explains why I don’t like bitcoin. Autocrats are winning. Saying NO is good."},"content":{"rendered":"

I don’t know what happened. Yesterday, on open, it crashed. Then it bounced back — perhaps because people, like me, bought the dip.<\/p>\n

\"\"<\/p>\n

Now this morning, it opened down and it’s bouncing.<\/p>\n

I’ll buy some IBM, CVX, and maybe some more Ford (F).<\/p>\n

I’m nibbling.<\/p>\n

Top yielders in our portfolio<\/strong><\/span><\/p>\n

I like dividends. I read somewhere that 40% of the S&P return over the last 50 (or so) years was dividends. These are the top yielders in our portfolio. (See the list on the web site. I just updated it.)<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
ENB<\/span><\/td>\n\n
6.7%<\/span><\/div>\n<\/td>\n<\/tr>\n
GOOD<\/span><\/td>\n\n
6.1%<\/span><\/div>\n<\/td>\n<\/tr>\n
IBM<\/span><\/td>\n\n
4.9%<\/span><\/div>\n<\/td>\n<\/tr>\n
CVX<\/span><\/td>\n\n
4.3%<\/span><\/div>\n<\/td>\n<\/tr>\n
O<\/span><\/td>\n\n
4.1%<\/span><\/div>\n<\/td>\n<\/tr>\n
MRK<\/span><\/td>\n\n
3.4%<\/span><\/div>\n<\/td>\n<\/tr>\n
MS<\/span><\/td>\n\n
2.7%<\/span><\/div>\n<\/td>\n<\/tr>\n
TXN<\/span><\/td>\n\n
2.5%<\/span><\/div>\n<\/td>\n<\/tr>\n
JNJ<\/span><\/td>\n\n
2.5%<\/span><\/div>\n<\/td>\n<\/tr>\n
OTTR<\/span><\/td>\n\n
2.4%<\/span><\/div>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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 <\/p>\n

Where to bitcoin?<\/strong><\/span><\/p>\n

Bitcoin has dropped 40% from its November high.\u00a0 Why? Mining it is now illegal in China and\u00a0 mining is now ultra-difficult in Kazakhstan. (What a charming place.) New regulations on crypto are being created by our own wonderful Washington bureaucrats. Remember what they say: Washington is eight square miles surrounded by reality!<\/p>\n

Bitcoin’s halcyon days are, I suspect, behind it.<\/p>\n

Shucks. I missed out on buying the farm Cramer bought. (But then I never was Farmer Harry.)<\/p>\n

Crypto is antique cars, fancy art, old coins, stamps from non-existent places … a million things that don’t generate income but have value the cognoscenti.<\/p>\n

To understand them you need to be intimate with them, understand them, live with them and gain heavy-duty knowledge that will (perhaps) give you an advantage. I can’t get motivated to immerse myself in crypto or most other non-earning stuff. I’m better at learning the dynamics of business and real estate.<\/p>\n

Yesterday Paul Krugman, who won a Nobel prize in Economics, wrote this piece in the New York Times. It tells you all you ever didn’t<\/strong> want to know about crypto:<\/p>\n

\"\"<\/p>\n

Josh Mandel, a Trump disciple seeking the Republican Senate nomination in Ohio, recently\u00a0tweeted out<\/a>\u00a0what he stands for: \u201cOhio must be a pro-God, pro-family, pro-Bitcoin state.\u201d Indeed, there has long been a strong connection between support for Bitcoin and right-wing extremism \u2014 like the traditional association between conservatism and an obsession with gold, only more so.<\/p>\n

So what\u2019s that about?<\/p>\n

Now, the fact that many Bitcoin enthusiasts say bizarre things does not, in itself, mean that cryptocurrencies are a bad idea. People can support the right things for the wrong reasons. I\u2019m sure, for example, that many people accept the scientific consensus on, say, vaccine effectiveness not because they value peer-reviewed research but because they are impressed by people in lab coats who use big words.<\/p>\n

Still, it does seem important to understand the cultish aspects of the cryptocurrency movement.<\/p>\n

First, however, a bit (ahem) about the economics.<\/p>\n

I still sometimes encounter people who say that we live in a digital age, so we should be using digital money. But we already do! Like many people, I pay for most things by clicking a mouse, tapping my debit card or pressing a button on my phone. I used to keep singles in my wallet to buy fruit and vegetables from New York\u2019s ubiquitous sidewalk stands, but these days even they often accept Venmo.<\/p>\n

All of these payments, however, depend on trusting a third party: People accept debit cards, Apple Pay, Venmo and so on because they\u2019re linked to a bank account. Bitcoin\u2019s whole purpose, as laid out in its original 2008\u00a0white paper<\/a>, was to remove the need for that kind of trust: It would validate payments using methods related to cryptography \u2014 coded communication. The goal was to create a \u201cpeer-to-peer\u201d system of payments independent of financial institutions.<\/p>\n

But why do this? Are banks that untrustworthy? I\u2019ve been in many meetings in which crypto skeptics ask, as respectfully as they can, for simple examples of things you can do better or more cheaply with cryptocurrency than via other forms of payment. I still haven\u2019t heard a clear example that didn\u2019t involve illegal activity \u2014 which may, to be fair, be easier to hide if you use crypto.<\/p>\n

And the truth is that although Bitcoin has been around a long time by internet standards \u2014 13 years! \u2014 it and other cryptocurrencies have made hardly any inroads into the traditional role of money, as a medium of exchange used to purchase goods and services. Hard numbers are scarce, but it looks as if a\u00a0vast majority<\/a>\u00a0of cryptocurrency transactions involve market speculation rather than the ordinary business of life.<\/p>\n

Yet Bitcoin and its rivals now have a combined\u00a0market valuation<\/a>\u00a0of more than $1 trillion. What do investors think they\u2019re buying?<\/p>\n

One answer is protection against the perennial fear that governments will inflate away all your wealth \u2014 as a recent\u00a0Bloomberg article<\/a>\u00a0put it, some billionaires are buying crypto in case money \u201cgoes to hell.\u201d Indeed, there have been\u00a057 hyperinflations<\/a>\u00a0in the world that we know about. However, they all took place amid political and social chaos; do you really think that in such an environment you\u2019d be able to get online and cash in your Bitcoins?<\/p>\n

There\u2019s also FOMO \u2014 fear of missing out. Bitcoin has hit a sort of marketing sweet spot: It sounds high-tech and futuristic while also playing to political paranoia. The resulting capital gains have led many apolitical investors to feel that they need to get in on the game, while also probably inducing public figures like Eric Adams, New York\u2019s new mayor, to\u00a0talk up Bitcoin<\/a>\u00a0because they imagine it makes them appear forward-looking.<\/p>\n

But do the confused rationales for Bitcoin mean that it\u2019s destined to implode? Not necessarily. After all, gold stopped functioning as a medium of exchange generations ago, yet its value hasn\u2019t collapsed. And we shouldn\u2019t discount the importance of illegal activity. There\u2019s about\u00a0$1.6 trillion<\/a>\u00a0worth of $100 bills in circulation \u2014\u00a080 percent<\/a>\u00a0of all U.S. currency \u2014 even though large-denomination bills are very hard for ordinary consumers to spend. What do you think people are doing with all those Benjamins?<\/p>\n

But let\u2019s leave market predictions aside and ask what\u2019s with the deepening alliance between Bitcoin and MAGA?<\/p>\n

The answer, I\u2019d argue, is that Bitcoin was supposed to create a monetary system that functions without trust \u2014 and the modern right is all about fostering distrust. Covid is a hoax; the election was stolen; California\u2019s forest fires had nothing to do with climate change, they were started by\u00a0Rothschild-controlled space lasers<\/a>.<\/p>\n

In this context it\u2019s perfectly natural for MAGAesque politicians to demand an end to a monetary system that runs through banks \u2014 we know who controls\u00a0them<\/em>, right? \u2014 and rests on a currency that\u2019s managed by government-appointed officials. There\u2019s no evidence of widespread monetary abuse, but that doesn\u2019t matter on the extreme right.<\/p>\n

The point, then, is that while there are real economic issues associated with cryptocurrencies, their rise has a lot to do with the broader political madness that has American democracy on the brink.<\/p>\n

Want to read more on this? Peter Coy did an excellent piece on “Can We Trust What’s Happening to Money?”<\/em> Click here.<\/strong><\/a><\/span><\/p>\n

The world’s autocrats\u00a0are winning<\/strong><\/span><\/p>\n

Whether they’re Putin in Russia or Xi in China, or\u00a0Min Aung Hlaing in Burma, or\u00a0Lukashenko of Belarus, or MBS of Saudi, or Maduro of Venezuela, or\u00a0 Erdo\u011fan of Turkey or Khamenei\u00a0of Iran …they all share one goal — to stay in power. With power comes money and a lifestyle that would make our billionaires envious. Allegedly, Putin is\u00a0 worth well over $200 billion. He is reputed to be the world’s richest fellow.<\/p>\n

They all share one weapon — the military. It keeps them in power.<\/p>\n

Give thanks we live in a country which keep its military separate and out of reach.<\/p>\n

What blew me away as I wrote that list of tyrants, I thought how they’ve all managed to squash entrepreneurial creativity in their own countries. Excepting China, there’s nothing I buy from any of them. And China is well on the way to squashing and stifling its entrepreneurs.<\/p>\n

When I was in Russia, I asked several people about starting a business there. I got eye-rolling and mumbling about months to get all the permissions to start a business and the bribes at each permissions place that you had to pay.<\/p>\n

This was the lead\u00a0illustration on an Atlantic piece. Five autocrats:<\/p>\n

\"\"<\/p>\n

It began:<\/p>\n

THE BAD GUYS ARE WINNING<\/strong>
\nIf the 20th century was the story of slow, uneven progress toward the victory of liberal democracy over other ideologies\u2014communism, fascism, virulent nationalism\u2014the 21st century is, so far, a story of the reverse.<\/p>\n

Read the Atlantic article here.<\/strong><\/a><\/span><\/p>\n

Though I’ve been to most of their countries, I’m so pleased that I never invested in any of them. Not one.<\/p>\n

Another reason “Saying NO” <\/strong>should be an important part of everyone’s investment strategy.<\/p>\n

Lockdown finally ends. First day at school<\/strong><\/span><\/p>\n

\"\"<\/p>\n

Be careful of cold and ice<\/strong><\/span><\/p>\n

Our pathway is lethal. Sheet ice.<\/p>\n

Our weather is\u00a0\"\"Not a good day for playing tennis outside.<\/p>\n

Not funny. I’m betting another two weeks before my busted shoulder signals “all clear” and I can hit a forehand again.<\/p>\n

MainCare just filled our propane tank with 704 gallons at $2.399 a gallon — for a total of $1,689.<\/p>\n

See you tomorrow. — Harry Newton<\/em><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

I don’t know what happened. Yesterday, on open, it crashed. Then it bounced back — perhaps because people, like me, bought the dip. Now this morning, it opened down and it’s bouncing. I’ll buy some IBM, CVX, and maybe some more Ford (F). I’m nibbling. Top yielders in our portfolio I like dividends. I read […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-56808","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/posts\/56808","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=56808"}],"version-history":[{"count":16,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/posts\/56808\/revisions"}],"predecessor-version":[{"id":56834,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/posts\/56808\/revisions\/56834"}],"wp:attachment":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=56808"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=56808"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=56808"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}