Bitcoin, Tesla, IBM and Palantir

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Dipping a toe in Bitcoin, Tesla (TSLA), IBM (IBM) and Palantir (PLTR) are all discussed.

Bitcoin, Tesla, IBM and Palantir


Podcast Transcript

This is Jeffrey with another edition of Stock Smart, February 9th, 2021 edition. Hope everyone is doing well. I want to talk about some news, the market is down today and having reviewed the S&P 500 oscillator, we’re slightly overbought and so that’s an indicator of how much purchasing is going on in stocks within the S&P 500. We’re at a level right now slightly overbought. So today the market being flat, we’re down a little bit. It’s not a surprise, the oscillator measures how much buying is going on and generally to hit this level,

We’re slightly higher it will have a tendency to kind of unwind as the market takes a breather and then resets so don’t be surprised we’ve had about seven up days in a row, so don’t be surprised if we get a couple two or three down days as it unwinds, one thing I’m noticing now, professionals who are in this industry, either financial advisors or wealth managers, like myself. I think they’re going to enjoy the new presidency because of the lack of the volatility that’s created by the administration, when Trump was in office you had constant volatility, especially in the first two years. Most advisors or wealth managers had a hard time reacting, engaging the seriousness of the Trump tweets and Trump would come out and talk about China, he talked about the steel industry.

He would talk about Tik Tok and then Oracle and it would greatly affect the stocks and or the companies that he would tweet about and that became a real nightmare for the market as you would see massive declines or massive bumps up creating a lot of volatility. So, I think as an advisor  where you can go back to a normal presidency where you know, when Obama was in office he rarely ever spoke of stock market and I think Biden will maintain a discipline like that. So not to be the last one at the party but I did invest a little bit in Bitcoin and because I wanted to watch it and I wanted to learn even more about it. So far my investment, I did not buy a full Bitcoin, but I did buy a little bit because I wanted to test it.

It’s already up about 8% I purchased it and I purchased it because I really did want to see what I’ve noticed is that Elon Musk is somebody, he can move stocks. He’s proven over the last year when he tweets about a company or company related to Tesla or put anything out there that joke was the Dogecoin that he made fun of in a way, Tesla’s entry buying 1.5 billion of Bitcoin makes it sort of legitimate and I think other companies now, will have to look at probably getting into Bitcoin in some respects and there’s rumblings about Apple making a similar investment at some point and reports of other companies may start to look into investments into Bitcoin.

It remains to be seen though the price of you know when a company has money, so what Tesla was doing is essentially they have cash reserves. And most companies do not want to have such a volatile investment as a cash reserve because when they need it, it may not be there. And Bitcoin, we know has a tendency to go from 30,000 to 27,000 to 27,000 to 40,000 its very volatile. So it remains to be seen if many companies will actually get involved with Bitcoin because it is a very big risk to cash reserves.

So we’ll see and we’re going to talk a little bit more about Bitcoin later and in future shows because I am getting a lot of questions about it and I’ll update you on my purchase and how it’s going


So let’s talk about a stock that I’m looking at. IBM and Palantir. Actually going to talk about two stocks. So IBM is the waste basket of tech companies. Now, it really is, was so far behind in terms of getting into the cloud, having any kind of products to anyone who would build applications and I’ve been in the application world for years and rarely did we ever use an IBM product. I would remember back 25 years ago when we use IBM Db2, but other than that, I can’t think of a single IBM product and I built custom web applications and database applications for years.

I haven’t used a product of theirs in years. And so IBM has been way way behind. Its stock price resembles that, the only thing that has going for investors really is the dividend at 5.2%. But if you’re losing 8% every year your dividend is worthless, it’s a negative 2.8%. So how good is that dividend been? It hasn’t been good. I did list it as a dividend Aristocrat this year because I do believe that they are making moves towards improving and getting more relevant in the cloud space. They did purchase six different software and fintech type companies in the last year and they recently now have partnered with Palantir who is a data analytics security and software company and Palantir is going to be licensing their products on the IBM platform, which is Red Hat.

This makes it very interesting Palantir, especially because Palantir only has a Salesforce of like 30-35 people they’re going for large institutional clients right now, but this will open up Palantir to a sales force with IBM of nearly 2,000 or 3,000 people. So Palantir has a great chance to grow here with IBM and it makes IBM look hip and IBM does not look hip it’s the old guys in the blue suit with a tie. That’s what the IBM you know, idea is, you know, the old saying was you don’t get fired for hiring IBM, well you know, now you would because people don’t care about IBM anymore and it’s not really relevant in the cloud space. So their red Hat acquisition that they made a year plus ago,

Which they paid a lot of money for, got them on to the relevant platforms of Linux and all these servers that they’re now able to access, but they don’t have products so what they need to do is they need to have their products sitting on that desktop. Well, that’s why buying or partnering I should say with Palantir is such a huge thing for IBM. So I would watch hand-in-hand IBM and Palantir. IBM price has gone down. It had really bad earnings at the beginning of the year. You know, they’re at 121. it fell off a cliff. It was a high of about 151. So it’s in a good buying zone. I would probably recommend dollar cost averaging into it because it could still remain volatile but it’s very inexpensive right now.

So that combined with the dividend make it interesting and this Palantir business relationship because when we’re talking about these software companies and applications we’re talking about entrenchment and that you’re not going to see this gigantic swoop of growth for IBM, like hockey stick or something on the chart, but what you’re going to see is a gradual growth of entrenched clients that will have created Revenue to their bottom line. So I do like IBM in the future. I think it is inexpensive, I think it’s been beaten down pretty hard and I think the dividend is worth looking at Palantir, same thing.

They are growing, this gives them huge salesforce to put all their products in the cloud with IBM which gives them access to millions of servers now, so I’d watch for that and that’s what stocks were looking at.


So, question for the day is from Michelle. And she wants to know, why does Bitcoin have value? Bitcoin has value because of course, it’s a stored-value I should say when we think about stored-value we think about things like gold or precious metals and they maintain their value because they pretty much stay the same over long periods of time, gold is heavy. It’s hard to store. It’s expensive to store, but Bitcoin that lives essentially in the cloud space, in the blockchain if you were, has value because it’s limited in the amounts that are actually created.

There’s only, according to the Satoshi, who was the creator, they agreed that there would only be 21 million Bitcoins ever created. Bitcoin has a currency value that’s based on exchange rates based on supply and demand. Currently the price of Bitcoin is in the 46,000 range. Bitcoin has gone all the way from few hundred dollars to 10,000 down to 3000 all over the map since it’s been in existence, which is over 10 years. Right now, it’s gotten extremely hot. If you look at the move on Bitcoin since January when Elon Musk started buying it, it’s gone increasingly hot and the reason it has, is because it has a limited supply. It is a limited resource, currently of the 21 million that will ever be created there are only 18.6 million in existence right now.

So it does have value because others find it to have value as a store of value and it is limited. So that’s the reason that people are getting involved in it. When it maxes out and hits 21 million there’ll never be another created. So it will continue to gain value and it’s unlike the dollar and this is sort of like a move against the dollar. We’re printing money like no one’s business and the dollar continues to go down in value and when we get inflation, the dollar will continue to go down in value. So your dollar will have less purchasing power with your dollar, but Bitcoin on the other hand since it’s trading more like gold, will actually continue to go up when we get inflation. Now, what’s interesting though is people always talk about Bitcoin

as being a Haven meaning when the stock market went bad, you’d run into Bitcoin. It’s actually not really true because the correlation now is that and it makes you think that regular investors meaning people who are investing in markets are also investing in Bitcoin, but you’ll see now that it’s correlated. If you look at the price of like the SPY if we look at the S&P 500 over the price of Bitcoin, you’ll notice that it’s fluctuating and moving in the same kind of pattern now, so that means it’s correlated. So when we had talked about, I’ve written articles about inversely correlated positions or negatively correlated, meaning when one thing goes up another thing goes down and that’s what good portfolio management is about, but with Bitcoin, you seeing now that it’s actually trending what the normal S&P 500 market does, so, that’ll do it for today.

There’s a lot to talk about Bitcoin going to talk about it more in future episodes. This is Jeffrey. Again, you can reach me at We’re getting 15, 20, 25 questions a day. I try to answer them via email if I don’t get them on the show. I appreciate the questions. We’re continuing to grow you have a great day. Talk to you soon. Bye

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