👑 Gold Breaking To All-Time Highs, But Is It Losing Its Shine?

What’s on the Menu 🍴

As gold achieves unprecedented highs, questions arise regarding its enduring appeal amidst shifting market dynamics..

Similarly, tales of bankruptcy often serve as a precursor to inspiring comeback stories and in the pursuit of wealth, the concept of "having it all" gains prominence, emphasizing the importance of balanced financial strategies.

Let’s dive in..

  • Gold Breaking To All-Time Highs, But Is It Losing Its Shine? 👑

  • From Bankruptcy to Comeback Story? 📖

  • You Can “Have It All” When Building Wealth 💰

  • How To Retire Young, Afford Your DREAM Life,
    & NEVER Run Out Of Money 📺

Today’s newsletter is a 5 minute read.

Gold Breaking To All-Time Highs,
But Is It Losing Its Shine? 👑

Gold has been all the rage lately, but is it really that impressive?

Since its price is breaking out to new all-time highs, gold bugs around the world are rejoicing!

I built a position in gold from 2014 to 2019, but my returns have been pitiful compared to stocks, bitcoin, and real estate.

Sure, the chart looks impressive, but when you look at the returns going back 10 years from today, all that’s gold doesn’t exactly shine.

So what’s the 10 year compounded annual growth rate (CAGR)?

A measly 5.5% per year.

So, where gold might make sense as a hedge in a world where the internet disappears and we go back to the bartering system, it seems like bitcoin is taking over its roll as:

  1. an inflation hedge

  2. verifiably scarce money

  3. a store of wealth

After all, bitcoin’s been compounding at over 100% a year over the same 10 year period…

And the recent spot bitcoin ETFs are gaining capital flow, while money has been LEAVING gold ETFs.

But gold is still over 10X the value of bitcoin…

So, will generational changes cause bitcoin to remain the darling for Millennials and Gen Z, or will “boomer rocks” make a comeback and see better returns for the rest of the 2020’s?

For the time being, I’ve got a small 2% of my portfolio allocation in gold, with is dwarfed by my ever-increasing bitcoin position.

From Bankruptcy to Comeback Story? 📖

At the bottom of the last crypto bear market in late 2022, many Bitcoin mining companies found themselves in dire straits.

The highest volume producing miner at the time, Core Scientific, filed for bankruptcy in December 2022:

Bankruptcies are not always the end of the road however, as many companies use the legal process to restructure debt and re-emerge a leaner & healthier company.

Core Scientific did exactly that in 2023, and it didn’t hurt that Bitcoin surged over 150% as well.

In January this year, the restructured Core Scientific officially emerged from bankruptcy and began trading under the ticker symbol CORZ.

Previous debtholders received new debt claims plus a chunk of the company, and previous shareholders also retained some of the ownership in the company:

As far as bankruptcy restructurings go, this was a great outcome for most stakeholders.

But here’s where things get even more interesting…

CORZ is publicly traded again, in the midst of a raging crypto bull market. So how is it doing so far?

The answer might surprise you:

Since being re-listed, CORZ has dramatically underperformed peers as well as miner ETFs.

Bitcoin itself is up over 60% year-to-date, which directly improves CORZ’s revenues & profits.

Why is CORZ underperforming?

We think it could be due to some combination of:

  1. low investor awareness

  2. previous holders selling stock they received from the restructuring

  3. debtholders hedging by shorting stock

  4. a complicated capital structure that includes potentially dilutive warrants

The forced selling could be nearly finished after robust trading volumes in the past two months.

As far as the capital structure goes, the warrants do not convert to stock until the stock hits $6.81 and above, which is almost 100% higher than where the stock trades today.

In addition, the warrants will provide cash to the company which will help it pay down even more debt, so it actually would be beneficial in that regard.

CORZ produced more bitcoin than MARA in the past two months, yet MARA trades at a market cap of over $6 Billion versus $650 Million for CORZ today (excluding warrant dilution).

MARA does hold $1.2 Billion of BTC on its balance sheet, but that doesn’t come close to closing the valuation gap.

Insiders bought CORZ stock in March, so they seem to think the company is undervalued:

Now the big caveat here is that crypto mining is a very competitive industry, with thin margins, subject to crypto price volatility.

There’s also the halving event coming up in a month which will cut bitcoin mining rewards in half.

But to CORZ credit, they are attempting to diversify revenue sources.

CORZ recently landed a contract with CoreWeave, an AI cloud provider that is closely tied to Nvidia, which could deliver significant revenues from data center infrastructure:

Long term we still have questions about the viability of crypto mining businesses.

But for investors who are trading crypto miners during the current bull cycle, CORZ definitely seems like a potential relative value play!

You Can “Have It All” When Building Wealth 💰

“Don’t pick stocks”

“Don’t trade short term”

“Only invest in index funds”

“Investing in startups is too risky”

“Stay away from cryptocurrency”

“Only invest in real estate, it’s the best asset class”

These are all things we’ve heard as wealth builders before.

Social media is full of “maximalists” who only tout one thing as the best way to build wealth.

What is the truth? What assets and strategies should people actually be implementing?

The truth is: you can have it all. You can have a piece of multiple assets and investing strategies.

You just need to know yourself, have a sound financial plan, and be aware of a few caveats.

Ultimately, some asset classes and strategies can provide higher and quicker returns vs. others.

Many of the wealthiest people have gotten there from things like a concentrated stock position from stock based compensation paid by their employer (tech companies specifically).

Others have gotten there because they took a chance on Bitcoin years ago.

The richest people on earth are rich because they put everything into ONE company (Bezos, Musk, Zukerberg).

The hard truth is, big riches come from big risk.

Not everyone cares for big riches. They’re happy with their S&P 500 index fund and the normal annual return of the market. They’re not craving taking on big risk.

But, some people DO have a thirst for more risk. I don’t think shaming these people as many social media influencers do, is the right approach.

It’s in our faces everyday, examples of how taking a bigger risk can lead to insane reward.

Look at NVDA stock, or Bitcoin’s price. Take a peek at some of the best performing tech company IPOs over the years, or even real estate prices in some markets.

How can you tell these people “No- don’t pay any attention to THOSE gains, the odds of you winning there are so low”.

Instead, I love to encourage people to explore the ways to build wealth that interest them most, and encourage a SAFE and manageable way to take on bigger risk.

You can “have it all” with all asset classes and trading/investing strategies while managing position sizes, risk capacity (your ability to take on risk), and the life goals you’re trying to achieve.

Want to trade the markets short-term? Fine! Do it with an amount of capital you can afford to lose, because it is absolutely higher risk. Face that reality.

Want to hold a concentrated stock position in the company you work for? Great, let’s talk why the company feels promising to you and how we can have a larger position to allow for bigger returns, without being overly concentrated in relation to your net worth.

Want to invest in start ups but you were told it’s too risky? Well, it IS risky! But, let’s chat why you want to do that and what percentage of your portfolio feels right for this strategy to avoid regret.

“Having it all” is all about balance and managing having NO regrets with your decisions.

It may take some coaching or discussions to get there, but, it’s very possible to have it all in your portfolio.

Want to start having it all in your portfolio? We teach you how in our Wealth Building Community. You get access to premium course on building a wealth plan, researching and investing in individual stocks, crypto and more! You also get access to our 24/7 chat room to ask mentors questions.

Video of the Day:
How To Retire Young, Afford Your DREAM Life, & NEVER Run Out Of Money 📺 

In today’s video, let’s dive into the heart of what it truly means to retire not just early, but with the kind of wealth that fuels your wildest dreams.

In this no-fluff video, I'm pulling back the curtain on the elusive figure you need to hit to secure a life where work is optional and abundance is a given.

Forget the outdated FIRE movement; I'm talking about crafting an Escape Velocity Investment Portfolio that's designed not just to keep you afloat, but to propel you into a realm where your wealth multiplies effortlessly, supporting your ideal lifestyle and then some.

This is about redefining the very essence of financial independence, where your investments do the heavy lifting, allowing you to live life on your own terms.

Also, get my NO B.S. guide to retire young and afford your dream life...

Download my FREE "escape velocity portfolio", Wealth Machine Mindmap, and tutorial videos.

Food For Thought 🧠

“If you don't believe it or don't get it,
I don't have the time to try to convince you, sorry.”
- Satoshi Nakamoto

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DISCLAIMER: We are not investment advisors, and this content is for educational purposes only. We don’t offer financial, legal, or tax advice. Nothing we say is a recommendation to buy or sell any assets. Trading and investing are extremely risky, so please be careful and do your own research.