Investing in Love

As a basic human need, investing in love seems like it would have great possibilities. No matter your age, gender or preferences everyone, at some point or another in their life (sometimes more than once) is “available’ and looking for love.  Technological advances make it so much easier now to meet people and avoid the “bar scene”., MTCH, is one of those that seems to have caught hold … well, at least the stock has.

Since its IPO in late 2015, MTCH is up more than 300%. As you can see in its chart below, it peaked in Sept of last year, fell more than 40% and has sense come roaring back. Most recent price action has seen the stock breakout from a cup and handle pattern, pointing to a much higher price target above.

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It would not be unexpected if MTCH were to back-test the breakout level (rim of the cup) before resuming its climb higher. Those that missed the breakout can look for a great, low risk entry if this were to occur as the risk could be $2 or less with an upside of more than $20, provide a fantastic 10:1 reward to risk opportunity.

Flip a Coin

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Below is great support for why investors should ignore predictions (especially) and follow only price..

There have been 469 recessions all around the world since 1988. The IMF economists (arguably the best in the world) were only able to see 17 of them coming the year before. Their accuracy, of course, gets better the closer they are to the actual recession. But they completely missed 159 (34%). I don’t need to say it but you are better off flipping a coin than listening to predictions about the future. To read the entire article …. …

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The Art of Knife Catching

Was talking to a great friend the other day and they asked if they should buy bitcoin. I said before you do let’s play a game. I will get on the roof, with you on the ground and I will throw some knives to you. Depending upon how many you catch will determine how much you buy. She laughed and got my point. I have nothing against bitcoin, in fact almost any vehicle is on the table as an investment but any purchase comes with a major condition, only buy if its price is rising. Let’s take a look at the bitcoin chart to see why I don’t believe now is the time to be acquiring this cryptocurrency.

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Long-term readers should easily recognize the ominous parabolic arc pattern. Parabolic Arc chart patterns are generated when steep rise in prices are caused by irrational buying and intense speculation. Parabolic Arcs are fairly rare but they are reliable that when they finally end, the result will be a steep and swift decline. The pattern typically terminates its uptrend and reverses direction upon a price break below the arc. If you are lucky enough to get in early, they are a way to immense riches … or devastation if you don’t have an investment plan (buy and hold)

As you can see after bitcoin broke the arc, it continued to fall, making lower highs and in the process forming a descending triangle pattern. These are typically continuation patterns, meaning there is a higher probability the break of the pattern will be in the direction of the prior trend (lower).  In this case, the break of the pattern that occurred 4 weeks ago points to a target in the area of $2900.  If that doesn’t hold, look out below as support doesn’t really show up until you get to $1000.

Because this is a logarithmic chart, it hides the magnitude of the decline. Put into perspective since peaking in December of last year, bitcoin has lost more than 80% of its value. Unfortunately for the millennials, they are the latest to be schooled by the markets and their early retirement dreams put on hold. It happens to everyone at some point which is being able to recognize irrational human behavior (parabolic arcs), confirmed by repeating patterns, helps to keep knowledgeable investors out of big trouble.

At some point BC will find a bottom and will be something worthy of your investment consideration. Until then, be happy you weren’t a part of the delusional crowd falling for the “hype” and “story” as they always precede parabolic arcs.