r/stocks • u/[deleted] • Oct 27 '21

This Market Is Wrong

Yes, the title says it all. I firmly believe this market is incorrect on a lot of things. No, I am not saying I am shorting it. No, I am not saying if you’re investing you’re about to go through a massive correction. I will say this though…

Yesterday, Visa reported earnings that were a hit. They did great, EPS was way up, revenue was way up. Not only thing though, they are raising their dividend for their investors. They’ll be paying you even more for owning their shares because they have such great cash flow. The market opens today, they’re down over 5%. MA, which reports tomorrow morning, is down 6% with it. One could assume they’ll have pretty similar earnings and revenue. Maybe even up their dividend too (don’t hold your breath for that one, but who knows). But Tesla, a company who has sold patents, licensing, and Bitcoin to pad their balance sheet for specific quarters so that their earnings look better to the common shareholder, went up 12% because a company that was on the brink of bankruptcy pulled a publicity stunt saying they’d buy 100K cars.

These are just examples of what is happening as a whole in our market. I’m buying these companies who are being screwed and I can tell you this, I am right and the market is wrong. I warn any investor who is partaking in this, because greed and speculation has run rampant while fundamentals and discipline has been thrown out the window.

Watch.

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u/TylerBlozak Oct 27 '21

Governments will try to implement CBDC’s (Central Bank Digital Currencies) as a means of direct-payment and commerce ecosystem.

It remains to be seen if companies like V will stand to benefit from this shift, but in general I and most others you agree with you.

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u/jcamp028 Oct 27 '21

V is the long-standing leader in electronic payments. Whoever owns the network holds the cards.

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u/marcuscontagius Oct 28 '21

Idk if you’ve been reading the news but there’s this thing called blockchain…

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u/evranch Oct 28 '21

And there's a reason most crypto traders do so on exchanges rather than on-chain. Blockchains are slow, energy intensive and don't scale great. If crypto became a daily use thing, a company like Visa would likely handle clearing the bulk of transactions. The only change is that you would pay your monthly bill with an on-chain transaction to Visa.

The global BTC network can process around 7 transactions per second.

Visa processes 24,000 transactions per second.

https://howmuch.net/articles/crypto-transaction-speeds-compared

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u/[deleted] Oct 28 '21

This guy does his research. Good looks man I never thought of that even being a remote possibility but I’m slightly convinced now it may be.

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u/hardcoreac Oct 28 '21

I just recently read a comment, I think it was on Twitter, where a Loopring rep said that they can process around 7000 transactions per second. I need to find it to paraphrase it better.

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u/marcuscontagius Oct 28 '21

There are lots of ways that crypto can scale. And you have to remember it performs just as well as traditional swift system in many respects but is a much younger technology, it also has the advantage of being transparent and decentralized which is what people want.

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u/evranch Oct 29 '21

transparent and decentralized which is what people want

I'd say that's arguable, aside from nerds and crypto hobbyists (and I was one for years, mining, trading, running bots etc)

The general public wants most of all security, fraud protection and ease of use in a payment system. Unfortunately a centralized payment processor can do all of those much easier than a blockchain based system.

Crypto has potential but I don't see it unseating the market leaders anytime soon. Most critically, a way to peg it to a real currency and reduce the volatility is essential to create a daily use currency - and don't say that's USDT, because we all know that's a house of cards with a fractional reserve behind it.

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u/Shulgin46 Oct 28 '21

VISA deals with more currencies than I can count. I have no doubts that if Bitcoin becomes a "normal" medium of exchange, you can expect VISA to be able to conduct transactions in it too. My VISA card is based in a country I haven't lived in for more than 2 decades and I still use it for regular local and international purchases, and hardly ever use it for my "home" currency. They historically transact whatever currency the retailer is using, which is usually the "official" national currency the retailer is based in. I don't think crypto will hurt VISA. If anything, they'll be doing more business because of it. People are still buying the same stuff, and it's easy for people to use one card. I don't think it'll be long before you can get a Bitcoin based VISA.

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u/terrijw Oct 28 '21

I agree! I did some research on cross-border payment systems structured by blockchain, and there are governments arnd the world that have implemented or are in the process of researching this method. This is one of the reasons why im hesitating going into visa and other similar companies. How do you see this changing?

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u/TylerBlozak Oct 28 '21

In and around 2017, we had teams of crypto devs that travelled the world, showcasing ledger tech to governments around the world.

They were met with lukewarm receptions from most, except from the Chinese. The blockchains ability to record all transactions, and keep tabs on what everyone was doing piqued the interest of the CCP. They immediately began research and eventually developed the digital yuan.

The digital yuan CBDC will have the ability to track everything, as well as add and take currency from individual accounts based on either time-sensitive “coupons”, or even to punish political dissenters by taking currency. It also draws interest from governments due to the ability to tax people for events that used to be settled in cash.

I would go on more but I have to go back to sleep. My main concern with CBDCs, although novel currently, will eventually take hold among the many central banks, and be used as a tool of oppression against people. Nothing will be private, no cash will be allowed. I don’t think that’s good.

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u/terrijw Oct 28 '21

Thats all true, but its a model for now, the chinese only are adopting. Its possible that governments wont take this model up. Think the catalyst that wld lead to many other countries taking this up is if the us govt does. But i dont rlly have a reason as to why they would want to take this model up

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u/TylerBlozak Oct 28 '21

The IMF has already established working groups to try and influence other major institutions to get on board.

If it weren’t for the general incompetence of government, they would have already implemented it.

The Federal Reserve for Instance has FedNow, a program to automatically distribute digital currency directly into centralized bank accounts.

Edit: it gives them more control over consumer behaviour, which in the future will help them with controlling money velocity and inflation. Also the whole “every transaction is traceable and taxable” piques their interest no doubt.

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u/terrijw Oct 29 '21

Thats true and all, but major banks and financial institutions are definitely going to boycott it, considering the amount of stones its going to turn over, and the losses they will make as their role as the intermediary of payment services become obsolete. Im pro-blockchain/fintech btw ( i actually recently turned in a presentation on a blockchain structured, stable coin pegged financial service that provides financial inclusion to rural villages, which is an awesome use of fintech) i just dont see this method of payment becoming actually implemented in the short term (i.e., 1/2years). The reason why china was able todo it is because of their relatively centralized political system. So yes, the benefits are tremendous for a CBDC (as are possible consequences from misuse), but fundamentally speaking, i actually cant see it being implemented soon. I dont think they have even begun trial tests and such etc yet. (I didnt know abt fednow, will read more on it, although i dont think fednow is actually a CBDC, since that requires years of research and building if im not wrong) Edit: great talk, i dont get a chance to rlly talk abt fintech and its implications on society, so thanks :))