🚀 Recession Canceled & Ripple's Not a Security?

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What’s on the Menu 🍴 

It’s no surprise that bears have gotten demolished the past couple of months…

And with inflation falling like a rock, investors are asking - “Is the recession canceled… or just delayed?”

Also, we zone in on two potential investment opportunities in today’s newsletter.

Here’s what’s cooking:

  • Ripple Is NOT a Security? 🙃

  • Panning for Profits with Bitcoin Miners ⛏️

  • Barbie Is Everything…And We’re Just Investors 👧

  • Recession Canceled? 🚀

  • Balancing Long and Short Game in Investing ⚖️

Today’s newsletter is a 6 minute read.

Ripple Is NOT a Security? 🙃

Yesterday, there were some massive judgements in the SEC’s lawsuit accusing Ripple of selling unregistered securities.

Here are some key takeaways:

  • The $728M in sales to institutions were securities

  • Programmatic sales (through exchanges) to anonymous buyers were NOT securities

  • Ripple paying people in XRP is NOT a security

  • The judge didn’t say if trades between users on exchanges are securities

So now we’re left wondering…

How can something be a security in one type of transaction, but not a security in another? 🙃

This is viewed as a win by the crypto community because it dealt a serious blow to the SEC’s enforcement strategy.

The news drove XRP’s price from around $.50 to the next major resistance level at $1 in just 4 hours.

And the TOTAL3 chart (non BTC and ETH crypto market capitalization) popped around 10%.

So, what’s next?

We expect the SEC to appeal the decision in the Second Circuit…

And the big question still remains: What’s to come of the $728 MILLION that was deemed an illegal token sale?

While this seems like a win for the crypto industry in the US, we think it’s still a little early to pop the champagne and claim victory.

There’s still a lot of unknowns around the Ripple case and several other looming SEC cases.

But, as traders & investors, we’re stoked to see all crypto markets getting some action!

Coinbase’s stock (COIN) was up 24%, breaking multi-month resistance on the news:

Could this be THE catalyst to kick off another altcoin season and crypto boom?

One thing’s for sure…

The Daily Dough team will be here every single day cooking up hot ways for you fill your appetite with the latest crypto news, tips, and investing ideas!

Panning for Profits with Bitcoin Miners⛏️

Let's crack open the crypto ecosystem…

We just might find treasure in an underappreciated area.

Despite Bitcoin's impressive 85% YTD ascent, many altcoins have failed to produce gains this year.

Even in the face of yesterday’s Ripple victory over the SEC, a lot of altcoins are still lagging.

So, how can we harness Bitcoin's momentum without getting entangled in the altcoin slow lane?

The answer might be less complex than you think - Bitcoin mining stocks.

Here's the catch: they usually outpace Bitcoin in bull markets, but during bear markets, they slump more drastically.

So, how do we play this?

Our strategy? Buy breakouts during bull markets.

Here’s a breakout example on CLSK that we sent in a watchlist to our Wealth Building Community.

It's about seizing the opportunity when it presents itself - and taking profit before the bear market goes into full swing.

The idea here is that traders and investors seeking exposure to Bitcoin will push miner stocks to new heights.

The key to this strategy is finding miners that have strong financials but still sport a relatively small market cap. This combination offers the potential for high returns in the next bull run.

By accepting the risk of not holding Bitcoin directly, you are gaining a form of leverage.

We have options here: either invest in a Bitcoin miner ETF like WGMI or go for individual mining companies.

WGMI holds many of the top mining stocks:

Looking for a quick roundup?

Here are the major players in the mining field: RIOT, MARA, CIFR, HUT, WULF, CLSK, HIVE, BITF, IREN, BTBT, DGHI.

Compared to Bitcoin’s 85% YTD gains, you can see the miners are already up significantly more.

Now, let's turn our focus towards Spring 2024 – the next Bitcoin block rewards halving.

In crypto lingo, a "halving" is when the reward for mining new blocks is halved, meaning miners receive 50% fewer bitcoins for verifying transactions.

Historically, these events have been associated with significant price rallies.

If Bitcoin continues its merry dance upwards until then, it would be fair to assume that Bitcoin mining stocks will be climbing right alongside it.

However, we also need to prepare for the not-so-rosy scenario.

If Bitcoin fails to don its dancing shoes and live up to the hype, some of these mining companies could find themselves on the chopping block, facing the grim prospect of bankruptcy.

In essence, Bitcoin mining stocks could offer a lucrative alternative to ride the Bitcoin wave without banking on unpredictable altcoins.

Barbie Is Everything… And We’re Just Investors 👧 

The hype surrounding the upcoming Barbie movie continues to build ahead of the July 21st release.

Twitter is abuzz, the memes are glorious, and even Airbnb listed a popup Barbie house in Malibu. 😎

What does this have to do with investing you ask?

Well, we noticed something interesting this week: Mattel, the owner of the Barbie brand, has seen its stock rise 20% over the past month:

And it has us wondering, could there be more gains to come with this one?

It strikes us that this movie could be a huge boost to the Barbie franchise, both short-term and long-term.

Mattel not only has a royalty from the film; they should also see a boost in Barbie doll and merchandise sales, as well as opportunities for future live events, video games, theme parks, other movie spinoffs, and more.

The stock itself is only trading at 19 times this year’s estimated earnings, and earnings may very well be underestimated if the film becomes a blockbuster hit.

This P/E ratio of 19X is roughly in-line with the overall market, and if Barbie can ignite higher growth for Mattel in the years ahead it doesn’t look super expensive.

What are the major risks?

Mattel does have a good amount of debt on its balance sheet. And strangely, Barbie doll sales actually fell 40% in Q1 2023. 🤔

Barbie related revenues accounted for roughly 25% of Mattel’s total revenue last year, so other divisions such as Hot Wheels and Fisher-Price also factor into Mattel’s performance.

There are a lot of moving parts here, and we certainly want to do more research work before we make a definitive conclusion.

But we highlight this situation because great investments often have surprisingly simple and obvious drivers.

We’ll be watching Mattel stock, and we’re not ashamed to admit that we’re pretty excited to see the actual Barbie movie too! 🍿

Recession Canceled? ❌

This week, we’ve received a lot of economic data that helps us figure out how likely we are to get a recession.

Some data continues to be relentlessly strong.

It’s not all rainbows and sunshine out there…

But key data like the inflation rate and unemployment claims continue to give ‘recession deniers’ some hope.

Everyone has felt inflation over the past few years (going grocery shopping alone has been financially painful).

The U.S. inflation rate measures how much prices are increasing year over year, and we’ve seen it move like a roller coaster.

We’re seeing a very strong decline in the rate of inflation (also known as disinflation), which is a big positive for the economy.

When things like gas prices and grocery prices go back down, that helps put more disposable income into consumers pockets.

Remember when egg prices went through the roof? We’ve seen this reverse (thank goodness!).

Then, there is the labor market.

Unemployment claims are low and the unemployment rate continues to stay at historically low levels.

Also, we’re actually seeing real hourly earnings flip positive (aka: after inflation is accounted for, wages are going up slightly).

Basically, it looks like the economy is in for a soft landing.

Balancing Long and Short Games in Investing ⚖️

Dancing the delicate waltz between the long-term and short-term horizons of investing is akin to mastering an art form.

Both stages have a crucial part to play in your financial symphony.

So let's unpack this duality and explore how to conduct the orchestra.

Focusing on the LONG-TERM first, we stumble upon the wizardry of compounding.

Imagine your wealth as a snowball starting from the top of a mountain…

As it tumbles down, it gathers more snow, growing exponentially in size.

The same happens with your investment; your initial modest sum, when reinvested, grows larger over time.

But this marathon isn't solely about pacing yourself…

It's about weathering the emotional squalls—avoiding panic-induced selling or fear-driven buying—that could bring your snowball's progress to a screeching halt.

A key ally in your compounding journey is using tax strategies.

By utilizing tax-advantaged accounts, you're not just earning but keeping more of your gains, amplifying the snowball effect.

Shifting gears to the SHORT-TERM, it's time to channel your inner hare.

The tortoise's patience and calm is vital, but so is the hare's drive for quick gains.

Here, your goal is to rev up your cash flow engine and take calculated leaps towards high payoff opportunities.

This might involve trading altcoins or more volatile stocks to accumulate more funds for reinvestment in ETFs, startup investments, and the like.

The wealth-building race isn't a simple marathon or sprint—it's a triathlon.

It's about juggling between patience and action, between the slow, steady incline of long-term growth and the adrenaline-filled sprints of short-term opportunities.

Take decisive, focused action in the short-term to turbo-charge your long-term wealth journey.

Remember, it's not just about how fast you go, but also how far.

This Week’s We Talk Money Episode 🎙️

In this week’s We Talk Money episode, we’re sitting ring side as the markets go head-to-head with the Fed.

You’ll learn:

  • Why bitcoin miner stocks are exploding

  • How Nikki is up 10X on her CVNA trade

  • Real estate prices vs. mortgage rates

  • Are altcoins dead?

  • And Q&A!

Delicious Bites 😋

Food For Thought 🧠

"Wealth is not about having a lot of money; it's about having a lot of options.”
- Chris Rock

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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.