New pod w/ on crypto's crash and 3 big stock market myths
open.spotify.com/episode/4hYBOf
1) Bitcoin is digital gold—a hedge against inflation and equities
2) 10% market corrections are rare phenomena
3) COVID was a boon for pandemic darlings like Peloton and Zoom
Conversation
Replying to
1) "Think of Bitcoin like digital gold"
This is almost a double-negative myth. Bitcoin has been an awful hedge; it's down more than the Nasdaq, making it more like a tech stock on steroids.
But as says, gold is historically a terrible inflation hedge, too!
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So in a way, you could say that Bitcoin really *is* like digital gold—just not for the reasons that its advocates claim.
Both Bitcoin and gold are volatile assets that people claim as a useful hedge even though their long-term histories suggest the opposite.
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2) Myth: 10% market corrections are rare and prove that winter is coming for stocks
Reality: Pullbacks of ~10% or more have occurred 8 times in the last 14 years.
The last seven times it happened, stocks finished up for the year.
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3) Myth: COVID was a boon for pandemic darlings like Peloton
Reality: By pulling forward demand and pushing up administration costs, the pandemic took Peloton's (and other pandemic stocks') janky unit economics and made them utterly disastrous.
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In 2020 and 2021, economic media ppl talked a lot about how the pandemic was ACCELERATING tech trends.
But for companies like Peloton, it accelerated doom by pulling forward demand to the point of exhaustion while pushing up cost structures to the point of unsustainability.
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Oh, and most gym businesses work one of two ways:
1. Fantastic money laundering vehicles.
2. Personal training revenue that’s never actually redeemed and goes straight to the bottom line.
The equipment is a conduit to these two things.
Great episode, most shocking thing: GameStop run was a year ago?! It feels like two years ago, somehow.
