Random Readings

Bitcoin blows up, putwrite ETFs and the open road!

Bitcoin has blown up...sort of. It is down dramatically in the last few days of course but it is back to where it was in November. For the last year it is still up 986%. I've written a few posts before about Bitcoin, you can look in the Macro Room on my page here at TheMaven and scroll down to see my posts. My take has been and continues to be that the ideas underpinning cryptocurrencies, faster and safer transactions, make sense and are going to happen but we're not at faster and safer yet and when we get there, it won't have to be with Bitcoin, as I have said a few times, the internet is alive and well without Netscape and AOL.

I disclosed what turned out to be a short term trade in Grayscale Bitcoin Trust (GBTC) back in November. Over the course of a couple of weeks I bought it at $909, it went up much faster than I thought it could and I sold it very early at $1309. I then went much much higher and split 91-1. In the last three days, GBTC is down just over 30%. GBTC is a flawed access for being able to trade at a premium to NAV like a closed end fund. Grayscale provides information as of yesterday's close and if you click through on February 1st when I am writing this, it shows the premium at about 50%, yesterday it was more like 70%.

I mentioned when I sold, that I thought I would have a chance to get back in and while I think that is the case, it is still in falling knife mode, I thought about scaling in and I might do that but the premium is still astronomical and I don't think this price point is one that is causing genuine despair...maybe it is, but I'm not a buyer for now.

Different item, WisdomTree launched a new putwrite ETF. I wrote about its existing S&P 500 Putwrite ETF (PUTW) a few weeks ago. The new fund is the WisdomTree CBOE Russell 2000 Putwrite Strategy ETF (RPUT). Click through to the older post to learn the mechanics of putwriting.

Every time I hear the word putwrite I think of the following;

I would repeat the message from that post about PUTW, the time for this strategy is when you're questioning why you even own stocks, bargaining with yourself to just get back to even, not 1.7% from an all time high in the S&P 500.

Here's a fun read about the community of people living the van lifestyle. The people are a mix of young people who've given up on the American dream, people who are a little older who have had to overcome financial adversity and a few others. What makes the article fun is that these folks have figured out how to be comfortable in their own skin and seem to generally be happy.

The downside relates to whether they have figured out what might come next. Someone who is 50 or 60 who sets out on the open road might have a little cushion, but not in all cases, to make it easy to pay for basic expenses. I think of this sort of thing for that age group as potentially being a sabbatical of sorts. Someone who is much younger and doing this needs, in my opinion, to make sure they don't wake up one day to find themselves middle-aged, unemployable with only $700 in the bank (or hidden somewhere in their van).

The lifestyle is appealing on some level, personally I would enjoy hitting the road for 6-12 months and driving all over the Mountain Time Zone. There's no reason not to do some long term planning for, depending on the circumstance, what comes next, the state of your finances during this sort of adventure and what the state of finances would be after the adventure.

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