Crypto Investing For Seniors

Cryptocurrency burst into the mainstream in 2021 as Millennial and Gen-Z investors bid prices of digital currencies to stratospheric levels. Led by Bitcoin, the granddaddy of all crypto, fortunes were made overnight as the thought of get rich quick schemes invaded the consciousness and sensibilities of young investors worldwide. That euphoria lasted a scant year as prices plummeted when Sam Bankman-Fried was arrested for fraud and his cryptocurrency exchange FTX declared bankruptcy. This caused a run on the exchange which in turn ignited a cascading downturn in crypto prices globally. It was like the 2000's DOTCOM implosion redux and spawned a "crypto winter" where prices have languished the past few years for the majority of digital assets. 

So why should you have any interest in crypto, either as general knowledge or as an investment? Because blockchain, the underlying technology of crypto, has ushered in a new generation of the Internet known as Web 3.0. The first generation of the World Wide Web was stagnant consisting of text, hypertext links and photos. The second iteration of cyberspace included social media, video, and online shopping and banking. Web 3.0 is decentralized, eliminating the middleman with machine learning and smart contracts on a blockchain platform. Blockchain technology is running in the background, so you don't know it's there, but it's here already and it's here to stay. 

As an example, California's Department of Motor Vehicles recently put 42 million car titles on a blockchain to fight fraud. In addition, the banking industry is beginning to tokenize assets. Tokenization is when you digitize sensitive information such as social security numbers and account information to be placed on a blockchain. Lastly is the porn industry which now accepts crypto payments. Finance and pornography are usually ahead of the curve in adopting new technologies. Mainstream adoption is soon to follow.

So what is this blockchain? Blockchain is a decentralized, distributed database that is used to record transactions in an immutable, transparent fashion. Immutable means that it can't be changed over time without alerting the network which makes it more secure and eliminates fraud. The two largest Blockchains by market cap are Bitcoin and Ethereum. Bitcoin can be described as a commodity much like digital gold, an innovative payment network without the intermediary of a bank. Ethereum is a blockchain used for Decentralized Applications and Smart Contracts. Decentralized Applications run on a peer-to-peer network which is what blockchain is, as opposed to a single computer. Smart Contracts are digital covenants that execute on the blockchain when predetermined conditions are met. 

As an end user, you may not care about the technological minutia of this next generation Internet, but as an investor, the consensus fifty percent compound annual growth rate for blockchain until 2032 will get your attention. Programmers are flocking to blockchain  to try and cash in on the rush to become the next crypto multimillionaire. There are about 9,000 crypto "projects" that you can invest in if you belong to a crypto exchange. Except for a handful of companies, the majority of these bootstrap projects are speculative at best. 

I tend to be a conservative investor, especially at an advanced age, and primarily invest in S&P 500 index funds. That said, I relegate a small percentage of my portfolio to riskier assets and am a former account holder at Coinbase, a major crypto exchange. I do not recommend using a crypto exchange unless you understand you are not investing, but gambling when you buy small cap crypto. 

If you're considering an exchange, here are some of the shortcomings. First, they're not easy to use. Coinbase is the most user-friendly of the exchanges and it's far from plug-n-play. Secondly, crypto on an exchange is not insured such as FDIC with a bank account or SIPC with a stock broker. Third, Customer Service is notoriously bad if it even exists. Lastly, you have to worry about getting hacked. I'm a Reddit enthusiast and have read countless posts of people losing their crypto through hacking or being lost in transfer. Although I stored my crypto in a secured digital vault on Coinbase, the thought of losing everything from hacking was always in the back of my mind. Not conducive for a good night's sleep. 

Although investing with an exchange is difficult and dangerous, the Securities and Exchange Commission has recently approved new financial products that make investing in some cryptocurrencies safe and easy. Gary Gensler, Chairperson of the SEC and former professor of blockchain and digital currencies at MIT, ushered in a new era for crypto investors with the approval of spot price exchange traded funds for both Bitcoin and Ethereum. 

These new financial instruments are  held in a stock brokerage account and protected by SIPC. Although these ETFs trade only during market hours, plus the pre and post market, their net asset values increase and decrease 24/7 with the correlated crypto.. If Bitcoin goes up 5% during a 24 hour period, the corresponding ETF will also rise the same amount and this holds true for the downside, too. They don't necessarily go lock step with each other during trading hours, but they're very close. If the New York Stock Exchange begins trading nights and weekends, you'll be able to liquidate your positions or purchase more shares just as if you were on a crypto exchange. In any event, your assets are much more protected with these instruments and you're also only investing in crypto "blue chips". 

Many companies have issued spot price ETFs for Bitcoin and Ethereum, but there are only two I feel comfortable investing with, Blackrock with their iShare funds and Fidelity. These two White Shoe firms have long track records of excellence. There are a few companies with similar offerings with lower expense ratios, but they aren't as established as Blackrock and Fidelity. Both organizations spot price instruments have expense ratios of about 0.25%, or twenty-five basis points. This means for every $10,000 invested, you'll be charged $25 per year. Very reasonable. The Blackrock products are iShares Bitcoin Trust (IBIT) and iShares Ethereum Trust (ETHA). Fidelity has Fidelity Wise Bitcoin Fund (FBTC) and Fidelity Ethereum Fund (FETH). If you can stomach the volatility of the crypto market, these ETFs are the way to go.

If you wish to dabble in crypto other than Bitcoin or Ethereum, you're very limited unless you go with a crypto exchange. One alternative option is to open a Robinhood account. The fairly new discount broker enables users to invest in fifteen popular cryptocurrencies such as Avalanche, Chainlink and Dogecoin along with Bitcoin and Ethereum. Although Robinhood was instrumental in ushering in  the commission-free phenomenon in discount brokerage houses, it's still a young company with growing pains. Buyer beware. Another option tentative crypto investors have is to utilize Exchange Traded Notes which Grayscale Investments sells. I don't endorse these either. Although Exchange Traded Notes trade much the same as Exchange Traded  Funds, they're not spot priced, they trade based on futures contracts, otherwise known as derivatives. Warren Buffett famously said derivatives are weapons of mass destruction. That's good enough advice for me. I'd stay away. 

I'm a firm believer that whatever the administration is in the White House next year, government policies about cryptocurrency will be much more favorable for the industry. Additional spot price ETFs will be introduced in the not so distant future if my hunch is right. We're in the beginning stages of a new technology era. It's like back in the day when we were listening to Lynyrd Skynyrd and Steely Dan and then Blondie and the B52's erupted onto the scene. A new generation ensued. We're at that juncture now. Invest carefully and always use limit orders.

 

Pluto TV: It's Out Of This World

Caleb Williams paints his fingernails with nail polish. He's the 2024 overall number one NFL draft pick, now the starting quarterback for the Chicago Bears. Triston Casas, the first baseman for the Boston Red Sox, does the same thing. Chart topping singer-songwriters Post Malone and Jelly Roll have jailhouse facial tattoos. Gillette INTIMATE is a men's pubic hair trimmer popular in the current youth movement. Things aren't what they used to be. Sometimes I just want to get away from it all and go retro. That's where Pluto TV comes into play, A free ad-supported streaming television service, Pluto TV can take you back to yesteryear, much the way Nick-at-Night and TBS did in the early 1990's, broadcasting classic television shows. The difference with Pluto TV is that it's not linear, it streams and is on demand.

Pluto TV launched in 2014 as a private enterprise. Paramount Global, the parent company of CBS, bought the company in 2019. As of April 2023, it has 80 million monthly active users. With tens of millions of viewers, you're probably already using the app or have heard about it. After all, movie streaming has been around since 2007 when Netflix transitioned from a mail-order DVD company to a streaming service.  Now, everybody is in on the action. 

The service can be accessed through a variety of devices: gaming consoles, smartphones, tablets, Web browsers and most importantly, Smart TV's. I watch Pluto TV with my TCL Smart TV with the built-in Roku operating system. If you own another brand of Smart TV such as a Samsung or Panasonic, the principal is the same. You download the Pluto TV app, you access it, and you begin watching over 250 channels and thousands of movies for free. When you originally boot up the app, there are two options to gain entry. The first one suggests you sign up for an account. I don't know about you, but I've got enough passwords to manage, and, don't want to be bombarded with emails. I always select the second option that says "NOT NOW". Enough said. 

Once you get in, you're presented with a vast menu of grids separating the broadcast productions that go back at least seventy years. It's an intuitive interface. Everything from Perry Mason and Rawhide to more modern shows such as CSI , Blue Bloods. and NCIS. Plus, all the spin-offs. Examples include CSI: Miami and CSI:NY. The movie section consists of all sorts of subgenres: comedy, rom-com, action, drama, horror, and sci-fi - the list goes on and on. If you're interested in live TV, Pluto has that, too. Not only is Bloomberg Television broadcast in real-time, but so is CBS Sports HQ and the CBS News Channel. In addition, every CBS News affiliate in major cities coast-to-coast transmits local news for their particular municipality. 

The diversity of options provided in classic television is mind boggling. The Game Show section has reruns of Hollywood Squares and Let's Make a Deal. You can binge old Soap Operas. The entire Star Trek family of franchises can be watched, everything from the original series to Star Trek:Voyager to Star Trek:The Next Generation to Star Trek:Deep Space Nine. Beam me up. There's a large offering of music videos from the 1970's to the current era, too. The whole concept of Pluto TV embodies escapism. The caveat with the service is you have to sit through the ads. Except for Turner Classic Movies and premium television channels, I've sat through advertisements for decades, so it's not that big of a deal for me.

Although there's a bevy of award winning sitcoms in the Beverly Hillbillies and Green Acres mold, I tend to skip those from oversaturation during primetime and from syndication when they topped the Nielsen Ratings back in the day. What I'm most fixated on is the Classic Television Drama category. Most notably Star Trek, Perry Mason, Kojak, the original Hawaii 5-0, and The Twilight Zone. It's been so long since I've seen these shows, it's like I've never watched them before. The plots are tight, the acting is great and the stories can be compelling. What's old is new again. I think they hold up, but I'm in my sixties, so my point of reference is subjective. Some shows don't age as well. Ironside and The Wild Wild West come to mind. Rawhide and The Outer Limits. I'll take them anytime. 

Way back when, The Minutemen sang "There Ain't Shit on T.V. Tonight". That went out the window when HBO ushered in The Second Golden Age of Television in 1999 with the introduction of The Sopranos. Although the traditional broadcast networks have decent primetime programming, it's the premium channels that really shine now. Amazon Prime, Apple TV+, HBO and Netflix all have excellent shows and miniseries'. That said, with the abundance of creative content, there's also a lot of mediocre programming, too. At least to me. The ten episode miniseries that should have been condensed into a movie, documentaries on arcane subjects and just plain old flops are common. It's tough to wade through everything offered, especially when media critics can be Gen-Z and Millennials. Although I can agree with some of their recommendations, their vantage point is much different than mine. 

Jelly Roll is now a pitchman for Amazon Web Services. The Gillette INTIMATE men's pubic hair trimmer commercial is in heavy rotation. Caleb Williams does thirty seconds spots for Dr. Pepper and Nissan. Sometimes I just want to watch a Western. Same as it ever was.

Fear and Loathing on Wall Street

Financial Television personality "Downtown" Josh Brown is a frequent panelist on CNBC's Halftime Report, as well as a highly regarded money manager as CEO of Ritholtz Wealth Management. He recently published You Weren't Supposed To See That: Secrets Every Investor Should Know. From 2008-2023 Josh wrote the pioneering financial blog The Reformed Broker which catapulted him into the limelight. In his new book, he reprints select blog posts at the beginning of each chapter, then follows up with current day assessments with updated analysis. His on-air persona likes to poke the bear, stirring up the powers that be on Wall Street with his shoot from the hip controversial commentary. The book does much the same. 

For an investing book, You Weren't Supposed To See That is unorthodox in its writing style. Most notably is Josh Brown's sense of humor which is uncommon in this publishing niche. He's like John Bogle with a joy-buzzer. At the beginning of the first chapter he posts excerpts from Kurt Vonnegut's speculative fiction novel Player Piano. Player Piano is a dystopian story depicting a time when machines take over, and, only the engineering and managerial class has any semblance of a life. Sound familiar? The chapter is about not fighting the robots or algos, but investing in them. He believes you should invest in the Magnificent Seven stocks, the large cap technology companies that dominate our world. Apple, Amazon,  Alphabet, Meta, Nvidia, Tesla, and Microsoft are all mentioned. The Orwellian oligopoly that dominates modern times. 

Brown cautions readers about the Wall Street sales machine and the hucksters on YouTube, X, and TikTok touting short term trading strategies. He emphasizes investing instead of trading and pays no mind to Wall Street's embrace of earnings whispers and quarter to quarter earnings statements. As Brown says, "Trading in stocks is mostly an exercise in bull**itting ourselves into the idea that we can reliably and repeatedly outsmart all of the other bull**itters each day.". He emphasizes that during the last decade, brokers have primarily morphed into asset managers which are fee based as opposed to commission  based. They make their money by increasing their clients' assets instead of commission fees, and as a result, index ETFs and mutual funds are a preferred way to invest because it's difficult to beat the S&P 500. Diversification is a  theme that resonates throughout the book.

Each chapter reads like an essay. Although the writing is smooth, it's also very dense, chock full of economic and financial history, pop culture criticism and lessons on life. Although there's good advice for individual investors, a lot of the commentary is meant for industry insiders. The jokes can go right over your head if you're not well versed in the monetary-industrial complex. Brown name drops some of the more prominent hedge fund managers of this generation such as Carl Ichan, Chamath Palihapitiya, Lee Cooperman, David Tepper, Cathie Wood and Bill Ackman, and warns about the hot hand because they don't stay hot for very long. At least not in the computerized trading era. The one that was left unscathed is Tepper because he got out while he was on top. 

Manias, crashes and scams have permeated stock markets from time immemorial to the present. Brown touts diversification and staying long the market to build wealth with a 60/40 portfolio which is 60% stocks and 40% bonds. Investors that can't stomach the market volatility tend to keep their money in a bank account or annuity which pay much less annually on average than a traditional equity portfolio. No risk, no reward. He advises that investors protect themselves from selling in panic during corrections. There's a herd mentality where some financial professionals copycat each other during times of crisis. They can lose clients money by impulse selling during market downturns with flavor of the month investing strategies. He quotes the most renown trader in history, Jesse Livermore: "There is nothing new in Wall Street. There can't be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.". 

Brown built his reputation for saying the things industry insiders are thinking but won't say out loud. He covers a lot of subjects in the book. The zero interest rate environment of the pre-pandemic decade is talked about in length. A chapter is dedicated to the aforementioned Jesse Livermore, too. Plus, Technical Analysis vs. Fundamental Analysis is mentioned a few times. But what the book really comes down to is you and your money and how to navigate through the murk of the financial industry. Beware of investment professionals trying to sell you the sizzle, not the steak. There's a great quote in the book by J.P. Morgan and this about sums up Josh's investing philosophy: "The man who is a bear on the future of the United States will always go broke.". Stay long and good reading.  

For God, Family, and Football (Not Necessarily In That Order)

Armen Keteyian and John Talty have teamed up to write The Price: What It Takes to Win in College Football's Era of Chaos. Keteyian may be familiar to readers as an Emmy Award-winning journalist on HBO's Real Sports with Bryant Gumbel. Talty is the national college football writer for CBS Sports and 247Sports. Impressive credentials and it shows as they take readers through a turbulent few years in the extremely popular sport of college football. NIL (Name, Image, and Likeness), the Transfer Portal and conference realignment are all discussed in great detail in a manner that entertains and informs. I've been a fervent follower of football, professional, collegiate, and high school, since the 1960's and can't recall a sports book that taught me so much. I couldn't put it down.

Although well written, it's not a breezy read in parts. Some of the chapters include portions of legal briefs and transcripts from Congressional Hearings and NCAA sanctions against coaches such as Jim Harbaugh, formerly of Michigan. It wasn't legalese, but you couldn't wade through the text. Perhaps it's just a reflection on society as a whole that lawyers are an integral part of the modern world. That said, these sections of the book are important in weaving a story that's turned the student-athlete into an employee of the athletic-industrial complex. 

Television networks and Power 4 conferences are in bed with each other. It's a hundreds of millions of dollars business. ESPN has the SEC and ACC. FOX has the Big 10 and Big 12. Don't forget NBC and CBS, too. Saturday afternoon college football programming dominates the airwaves. Since NIL became legal in July of 2021, players are getting a piece of the action. Endorsement deals and pay-for-play schemes offer collegiate athletes life changing money. Quarterbacks entering the transfer portal can fetch anywhere between a million and eight million dollars. Position players can receive $150,000 or more in the mega conferences. The days when the student-athlete only receives tuition, room, board, and a small stipend are long gone. At least in big time college football. Previously, deep pocketed boosters would grease the palms of prized recruits or even provide them with a car with a wink and a nod. Now it's right out in the open. 

The book goes into great detail about the premier coaches of this era: Nick Saban, Jim Harbaugh and Kirby Smart. In addition, some of the also rans at the smaller school such as Arizona and Maryland are discussed with the difficulties of having their players poached in the transfer portal. These schools with the smaller booster base don't have a chance. Financial consortiums called "Collectives" where booster money is pooled have sprung up and replaced the lone wolf super booster. Everyone wants a piece of the pie, from the starters to the scrubs. Even second and third team players at schools such as Alabama will enter the transfer portal for greener pastures if their financial demands are not met. Young athletes want instant gratification. It's a sign of the times. Plus, the schools with the bigger fan bases get more money because they have more boosters. The rich keep getting richer. 

I'm not pining for the good old days. The system wasn't fair to the athletes. But as one source was quoted, and I paraphrase, we closed one Pandora's Box only to open four or five others. Now we have the advent of super-agents to the coaches such as Jimmy Sexton pulling the strings behind the scenes. Plus, benchwarmers are going hat in hand to coaches wanting to be paid, or, will transfer if their demands aren't met. Money talks. If you want to preserve the sanctity of college athletics, don't hold your breath. Those days are gone. This book is an eye opener and can jade you if you aren't open to change. I thoroughly enjoyed it and I think you will, too.