Topic: [2017-01-06]Barry Silbert has decided to go into 2017 with no shares (Read 423 times)

You are right when you say that bonds are more overvalued than stocks. Bonds are in the biggest bubble of all time. It's also true that stocks can generally be classified as a productive asset and that overall they will offer some protection against price inflation.

However, considering historical averages, stocks trade at very high valuations as indicated by the price/earnings relation. So stocks may absorb a portion of the coming price inflation, further rising nominally. But they won't absorb the whole inflationary effect.

Not all stocks are created equal of course. Companies in the service sector will perform worse than companies in the raw materials and manufacturing sectors.

I've been hearing stock-market bears saying that corporate stocks are overvalued for years now, and I've been thinking for some time that their (the bears) assessment is not altogether consistent, and that however much stocks are overvalued, it's possibly not as much as they continue to say. Let me explain.

The basis of the "overbought stocks" argument is that it's funded by cheap money from the Central Banks. And that doesn't make sense, precisely because the market increase has been funded by money printing, not with pre-existing investment capital. They're still probably overpriced, but the bearish argument tends to imply that every extra fiat currency unit printed is a dollar over fair value, and that isn't necessarily so.

Because the massive expansion in the money supply has been largely sequestered in the stock market (as only large financial firms have access to Central Bank borrowing facilities), that means the real economy has not seen the amount of price inflation that stocks have. But that does not mean that the money in stocks will not eventually seep out into the real economy, and when that does happen (i.e. when the stock market corrects itself and stockholders sell equity for assets in the real economy) the price inflation that has so far been fenced-in to the stock market will suddenly spread into the real economy too.

And the fact is that while bonds are seriously overvalued (as the negative yields and the huge unservicable debts they constitute make them entirely non-productive assets, just false safe haven assets that only central banks either buy or hold these days), stocks in aggregate are a functional, productive asset, as they represent real business interests making real profits from real economic activity. So, once the real economy has absorbed the price inflation it has been sheltered from these past 8 years, stocks could make a considerable come-back from where they were talked down to (in this near-term scenario).

Of course it's marketing for his financial group, but overall it's clearly a wise decision. Stocks and bonds are overvalued, while safe haven investments are undervalued in comparison.

However I don't know why he invests in altcoins. I'm sure that a Bitcoin-only investment will have much better performance. Altcoins are very speculative. The network effect of Bitcoin attracts the best developers and ensures constant progress, while altcoins even struggle to be accepted in the real world (besides Bitcoin/altcoin-exchange).

Chief of Digital Currency Group

Barry Silbert, Chief of Digital Currency Group, said he would abandon shares in 2017. Instead, in order to preclude global financial crisis plus economic unsteadiness, he is going to concentrate on digital coins: Bitcoin, Ethereum Classic, and ZCash.

Bitcoin’s rally above $ 1,000 has significantly changed the outlook of large investors and concerns. The recognition of the digital coin as a worldwide value amid growing Fed indexes and compressing government rules on conventional assets is pushing the price up..https://bit.news/eng/barry-silbert-decided-go-2017-no-shares/