20 - Planning Matters Interview With Michelle Schneider - Crypto v Dollars

We want you to plan for success. Welcome to Planning Matters Radio. Welcome back into Planning Matters Radio. I am Peter Rochon, founder at Rochon Planning. I am joined once again today by Michelle Snyder.

She is with Market Gauge. Today, going to be talking with us a little bit about cryptocurrencies, the rise that we've seen in prices, and China's announcement that they have recently released their own version of a cryptocurrency. First and foremost, Michelle, welcome back. Thanks for joining us. Thank you for having me back, Peter.

Pleasure to be here. Well, we appreciate the insight because obviously cryptocurrency is receiving a lot of attention right now, and rightfully so. I mean, prices are going crazy.

What do you see this could be attributed to? Well, if we start with Bitcoin, which of course is the granddaddy of all the cryptocurrencies, we've seen a lot of institutional investments, a lot of legitimacy from companies like BlackRock and JP Morgan and PayPal and Square, and the list goes on and on and on. And as a result, now also with more traditional ways to trade it with the advent of coin, even though coin hasn't necessarily performed the way one would expect, its volatility has come way down. And as a result of its more transparency and more ability for people to trade, it's actually had a volatility situation that's also calmed down. And we're in a price range, which is amazing to talk about something like Bitcoin that was so volatile in terms of an actual technical chart and less volatility with a price range.

So right now we're trading between like 52 and 57, and it looks like we get through 58, 60, and we could have another leg up. It's lost market cap in terms of the crypto space compared to Ethereum, which, as we're talking, made a new all time high. So it's fascinating. And then, of course, you have the whole Dogecoin and then you have the XRP thing and then Litecoin. And all of the cryptos are really flourishing for a myriad of reasons. Now we're seeing some pretty high profile figures really pumping up and talking about Dogecoin in particular. And I certainly see that filtering down to everyday investors.

They're excited about this. But what credence do we put behind that? And is it right for those high profile individuals to be pumping it up the way that they are? Well, let's name the person and that's Elon Musk.

There you go. He's going to be on Saturday Night Live this weekend. And of course, people are expecting him to, well, God knows what he can do.

I mean, we know that he's done everything from whether it was real or not, smoke a joint on camera to, so he can come out with anything at all. But the anticipation since he's been talking of Dogecoin is that that will continue to happen. So you know, it's almost Dogecoin almost reminds me of the fake it till you make it kind of thing. Because what's up? Yeah. Yeah. Yeah. Because right now there's actually some value that's starting to be attached to something that has started out as a joke. So I don't know if you're aware, but like the Oakland A's and I think there's one other baseball team is actually allowing you to buy two seats for three games for 100 Doge.

So that's actually pretty cheap. So so there you go. So as more people that say, hey, you can get you can do this and give me Dogecoin for it, that will then start to feed on itself.

So that's why the fake it till you make it kind of thing. But speaking of which, though, how much of the value of any of these crypto currencies, the true lasting value is tied to them actually being accepted as a form of payment somewhere? Well, that's it. I mean, so far, I guess the quintessential attachment of Bitcoin to some level of value is you can buy a Tesla using Bitcoin.

So there you go. And I don't know how Musk has adjusted the variation of the price for Bitcoin. But I would imagine if he's got a number like 50000 for S3 or whatever the Tesla models are. And I'm not going to pretend to be an expert on Tesla, but in terms of the car itself, one Bitcoin would cover it at this point in time. One Bitcoin would probably cover the cheaper version, I think.

Is it the S3? Yeah, I'm not an expert on Tesla. You're not an expert.

OK, whatever. So but it would take a whole lot more Dogecoins. Exactly. And Ethereum is very different because the store of value with Ethereum is very much tied now into the block chain technology, which is legitimate, but still also in infancy in terms of really being able to measure Ethereum versus whatever the store of value is. And so that that's the whole space is fake to make it.

But really, we step back. There's an overall theme, I think. And you mentioned in the very beginning when you were introducing me about China to me, the overall theme here is the DeFi.

Right. That's the big buzz now, which is the decentralized finance versus what China is doing with digital yuan, which is really basically trying to control the currency first within its own domestic borders and then branching it out to international, which is the exact opposite of decentralized because they completely manipulate it. They can completely make as much as they want. Plus, everything that you buy, if you use digital currency, is stored in a database. So they know exactly not only from a more nefarious standpoint of knowing what you buy and maybe encouraging certain things, but also even from a marketing standpoint, less nefarious, what to promote to you because you bought this. Which is completely counter the reason for the inception of the Bitcoin in the first place. And you touched on that, that the decentralized finance was really the motivation behind these things.

But the fact that this is so opposite and opposed to the conception and the reason and the motivation that many got into this. Sure, it's a digital currency, but it's also what I think a lot of investors are fearful of, that now every one of my single transactions can be tracked and traced and followed. Well, and that's why big data is a trend that we've been watching to emerge this year. And so far it's taken a backseat. We, for example, we're looking at Datadog, which just got killed with all of the stocks that did well during the pandemic.

That theme of them getting killed right now, Datadog has joined that. But there's a couple of stocks and companies that are dealing with big data and data collection that merit watching. But just getting back to the digital yuan and the cryptocurrency space, to me, the biggest concern here is the fallout for the U.S. dollar.

That is the biggest concern. And you listen to people and they like to attach all kinds of blame to why the dollar is down. And of course, inflation, we know, is starting to pick up and pick up big time.

But even apart from inflation, which, of course, is part of the fact that the dollar is down, is attractive to buy more goods and specifically commodities. What happens to the dollar if China, let's say, wins this war with digital currency and they do branch it out internationally and they make because their goods are so much more attractive to buy already, as we saw with our trade deficit, we're still importing more than we're exporting here in this country. What happens to this country?

What happens to the U.S. dollar? Now, I am in by no means the type of person that goes into apocalyptic type of panic. I don't.

But I definitely think we have a situation here that needs to be monitored. Now, I'm all about making the money. So I'm long Ethereum. I'm looking to get back into Bitcoin. I've been watching even Ripple. Some people in my office have been long Dogecoin, taking some profits here, you know, long gold, long silver, long sugar, long a bunch of commodities. But if I step back as an American citizen, I have to say it does concern me a lot.

Where do you see Ethereum going from here as compared to maybe Bitcoin or any of the others that you mentioned? Well, now it's feeding on itself. Right. So, you know, it looked like thirty five hundred was going to be somewhat of a cap. And then it went down to about thirty two and didn't go anywhere further.

Now it's back close. It got to thirty six or one, I think today. I've heard five thousand. I've heard forty thousand.

But it's like Bitcoin. I've heard seventy five thousand. I've heard one hundred fifty thousand.

I've heard four hundred thousand. Still very speculative, very speculative. And that's what that would be. My answer is it's like a commodity. It's trading like a commodity. And when I say it's trading like a commodity, I'm going back to when commodities were hot.

They're hot again, but they haven't been hot in thirty five years. So other than, you know, we've had an oil throughout the last 30 years, 40 years. But otherwise commodities have been kind of flat line. But when they get going, what's the value of gold? What's the value of silver?

What's the value of wheat? You know, it feeds on itself. And that's kind of how I'm looking at the crypto space is they're trading in an emotional pattern. And luckily, like we said before, there's some technical analysis you can do here based on some history now with Bitcoin.

Otherwise, who knows? What what do you see is the value of investing, perhaps in the block chain technology versus in these cryptos, since most of the cryptos are in some form or fashion, at least loosely based on the block chain technology. But the block chain technology itself can do many other things besides just be that transaction register.

Well, there is a ETF called Block, which is totally tied to block chain technology. And if you don't mind me turning away from the camera for one second, I can put up a chart. Sure. Yeah.

OK, thank you. So it's B.L.O.K. It's the Amplify transform data sharing tied to block chain. And actually, that's not doing so well compared to what we're seeing in Ethereum. Now there are companies that are using block chain technology like Riot and MicroStrategy, but none of those companies are doing well right now. And particularly block chain in and of itself has broken down not quite to the lows that we saw just a few weeks ago, but still not going in the same direction as the excitement we're seeing in Ethereum, let's say, for example. Aren't some more established companies heavily behind block chain, though, too? I mean, IBM and Oracle and companies like that, Red Hat, those type of companies? Yes, they are.

And and yes. And so would it be something that I would keep my eyes on, especially if you are a more traditional type investor and want to get involved in block chain technology, but don't want to actually buy coin or buy one of the actual coins in and of itself or wait for new ETFs to emerge, which we know right now is under planning, bound to happen at some point. Yeah, I think some of these more traditional companies are good are good ways to look. And we've been in and out of Riot. We've been in and out of MicroStrategy.

That's why I know right now they're kind of out of favor. They're not doing anything. So we're waiting. Well, so you touched on the fact that several companies, many companies, mostly tech centric companies did very well during the pandemic and that they are not doing so well now. Now, as as the pandemic, we'll call it, is coming to an end. Where do you see the the opportunity lie if those companies that had that meteoric rise and did phenomenally well during those conditions now fall into lesser or out of favor?

Well, that's a great question. And so there's a few stocks I'm watching particularly for that. One, believe it or not, is Wayfair. OK, they got what I want. Just what you need.

What is it? There's something like that. Something like that. But Wayfair went up a thousand percent from March twenty twenty to March twenty twenty one and now has. And actually, I think reports earnings tonight. So there's one because, yes, they they they they excelled because of e-commerce.

And then after that, it was home improvement. People looking for cheap furniture, senator, redo their homes that they're staying in. But Wayfair has been a good company for a long time, long before the pandemic. So does that mean Wayfair is over because pandemics over and people are going to be going shopping again to furniture stores or what have you? Well, it's certainly the reason why it's taken a hit.

But I think there'll be a level of value there. So I'm very curious to see what Wayfair does after reporting and I'd be looking for some level of support. The other one solicited endorsement is at least personal experience. They've had excellent customer service for me as well on the couple occasions that I've ordered something and and it hasn't been exactly right. They've taken extra steps to correct it. So you're absolutely right. In fact, we have a new office here and we bought I bought a vanity because, you know, when I get dressed for the camera, I do it at the office.

So I have a whole makeup situation going on. And we bought it from Wayfair because the price was unbelievable. Number one, it came damaged. They didn't even want it back. They said, keep the damaged one.

Here's your new one. So, yes, to your point, it's a great, solid company. So that would be almost at the top of my list of interest. Yeah. Almost the same experience for me, by the way. But but go ahead. I'm sorry.

Zoom, zoom, which you and I are talking on right now. Right. I mean, does this mean that once the pandemic is completely over, I'm going to be traveling to where are you in North Carolina? Right. Yep. Yeah. I mean, I'd love to, but probably not.

Actually, I really would love to go to North Carolina. I haven't been in a long time, but I won't. And we have a corporate subscription now to zoom because we have meetings, we have staff and people working with us all over the world. Basically, is going to go away because, yeah, I mean, people like Jamie Dimon said, oh, I can't wait. I'm done. So done with Zoom. But yet it's not going to be gone forever.

It's still an unbelievable technology and it still monetize as though it's very cheap. So there's another one post pandemic. I'm waiting for Zoom has, I think, reports at the end of May. So at this point now, I'm just waiting for earnings to see what happens.

I wouldn't jump in ahead. So those are just two examples. And then I still, like I said, I like Datadog, which did very well during the pandemic because people were shopping online. So all that data was being collected and Datadog right now is also really depressed.

All these companies interest me. I think what you have to do is you have to look beyond the pandemic. Come up with some level of fair value and then understand if it fits into a mega trend that isn't going to go away any time soon.

Well, I appreciate your take and insight on those. Now, circling back, you touched on the strength of the dollar inflation, obviously an indicator of the direction that that is heading. But if a more conservative investor wants to just maintain purchasing power and maybe get a little growth on their purchasing power while the value is of the dollar is devaluing, while there is inflation and they don't want to be ultra speculative.

I mean, commodities you mentioned was one area where you could turn, but maybe they are a little bit more conservative. Where are you seeing is any kind of alternative that can kind of combat the effects of the weakening of the dollar and loss of purchasing power? It's a really, really good question because typically what we're really talking about, I think the biggest fear that I have for the rest of this year and into 2022 is stagflation. So now you're looking at a situation where what's safe? If inflation goes up, continues to go up, the economy stagnates because the Fed has to do something to raise rates.

What's safe? So there is some people buying tips, which is the inflation protection bond. So that's one place to look at. It's not volatile.

It just kind of goes sideways. And that might be a place for steady money. I mean, I know you mentioned gold is speculative and it is speculative, but it's still a currency in and of itself. And let's face it, I mean, I actually had somebody on an interview earlier in the week said to me, well, in the case of the apocalypse, you know, and I love these people who are, you know, hysteria with the signs were running.

I always think about being in the subway in New York, you know, the people, the end of the world. Time is running out. Yeah, right. Exactly.

But he he asked me, I mean, I think he was trying to make his point about his question is, well, what if everything shuts down in the grid and technology goes away because it's been shut down and we're back to like, you know, basically sticks and stones. Gold is still worth something. So even though it's speculative, I think I would be looking at gold right here. However, I talk to my clients about that and I tell them that under those same set of circumstances that that gold would be most valuable.

It also could potentially be a liability during those times if things turn back to sticks and stones. And you're one of the very few that actually has some physical gold that that may be some somewhat of a concern, at least as much as it is something of value. But I also have heard people say, hey, Bitcoin is the new gold. Gold is the new gold. Gold has always been gold. Gold has always been the gold. I guess, Peter, I have laughed at the conversations and the questions I've been asking is like, well, you know, is gold dead?

What is about gold versus Bitcoin? And, you know, I kind of like to say in my mind, I come up with like Godzilla versus King Kong, you know, like, come on, you know, but but but yeah. But, you know, getting back to the sticks and stones, you're right. Immediately when you were talking, I was thinking about the series that I used to watch, The Walking Dead.

And it didn't matter what the thing that was most valuable was ammunition and guns. So that's a little scary. Right. And and human power, you know, just humans to be able to create and build and grow and stuff like that, you know, food. And let's get so let's get back to food, because we started out the food prices have gone up tremendously. And so I would say that if you wanted to do something less speculative, even though it is speculative, you know, I might be looking at looking at some of those food commodities as well. And you can buy ETFs.

And they're thin. But they've been going up and there may be more room to the upside. But in terms of telling you, yeah, buy this, it's just going to sit and it's going to be steady and you're not going to lose money. We're in an environment now with with things have changed so much.

I'm not really sure bonds used to be the big safety plate. I wouldn't necessarily count on that. You know, currency. I don't know if I'd necessarily count on that. So what are we really looking at here to count on like tips?

I come up with, you know, and I really don't know what else. I mean, unfortunately, we're in a situation here where speculating is the way to protect yourself. You just have to know where to be and how much to risk. Interesting times we live in. Michelle Schneider here, and she was one of the first female traders of the New York Commodity Exchange in the World Trade Center. She is a director of trading education at Market Gauge, makes regular appearances on Charles Payne and CNBC. And so glad to have you join us here again on Planning Matters Radio. Thank you for taking the time, providing the insight. Really a lot of great information, I felt.

Thank you, Peter, so much. And I do hope to come to North Carolina someday and meet you. Stop by. We'd love to have you. And, you know, just to do something like this, hey, we can do that through Zoom. But if you'd like to come for a visit, we'd love to have you sometime. I don't want to miss the opportunity to mention your book either.

Plant Your Money Tree, A Guide to Growing Your Wealth. I was going to pick up a copy, but there's not one behind me. Yeah, a bestseller and definitely one that I would I would suggest readers take a look at. So, Michelle, thank you for being here again on Planning Matters and look forward to having you back sometime soon. Thank you, Peter, very much. Well, great interview there with Michelle Schneider. We always appreciate her joining us on the program, providing some great insight on some topics that I have recently spoken with a lot of clients about. So if you've got questions or concerns, if you would like to get a plan put together or find out any more information on any of those topics, pick up the phone. You're welcome to give us a call here at Rashaan Planning, 919-300-5886, 919-300-5886. Look forward to speaking with you soon.

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