The Everything Bubble.

It was a spooky few days for investors this week.

The fed gave “good news” saying they did not expect to raise rates through 2023, and that inflation is on track to remain below 2%.

Not for sure how much of that statement I believe, but we’ll see what happens.

Tech stocks have also been experiencing another draw down. Some are saying this is the needle about to pop the bubble.

While that statement seems to be made every other week, it does get interesting when you look at “assets” outside of the stock market.

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“Stock market bubbles don’t grow out of thin air. They have a solid basis in reality, but reality is distorted by misconception.” - George Soros

Pick any type of “asset” and chances are it is at or near a record high.

Stocks

As I said, you likely know the Dow and S&P 500 Index are one of those asset classes at levels never seen before. These two along with a number of other stocks have been enjoying the ride up.

Let’s get into a few more.

Bitcoin

Another week, another email mentioning how Bitcoin is doing something crazy.

Bitcoin managed to climb to an all time high of $61,283 per coin on March 13th. It has been on one heck of a run returning 780% over the last 365 days.

Not to mention, with another round of stimulus going out, many are starting to worry how it will affect the dollar.

So maybe you think Bitcoin is a fad, what about real estate?

Real Estate

If you have been involved recently in the real estate market you have likely witnessed some out of this world offers.

According to redfin.com the median home sale price increased 17% year over year.

56% of homes are under contract with an accepted offer in less than two weeks.

This boom in housing prices is likely due to extremely low mortgage rates.

While real estate might not be considered a “bubble,” wait till you see this next one.

NFTs

Non-fungible tokens. Basically works of digital art where the original only exists on the blockchain.

Last week one of these NFTs created by Mike Winkelmann, aka Beeple, sold for a cool $69 MILLION DOLLARS.

What is that you ask? The piece is titled Everydays: The First 5000 Days and is a collage of Beeple’s daily work over the last, you guessed it, 5000 days.

Imagine spending $69,000,000 to then get the image you bought in a PNG file over email.

Pokémon Cards

Earlier this year a box of Pokémon cards sold for over $400,000 dollars. To top this individual packs of the cars have received bids of up to $40,000 a piece.

Collectors have been wilding out.

A Charizard card, which is renowned as one of the most valuable collector cards, sold for over $300,000.

That same card could have bought for around $16,000 in 2019.

So Is This A Bubble?

Well let’s break it down to get an idea of what has been going on.

Last year when the virus showed up the government decided to shut down businesses across the United States. To help those struggling financially Papa Powell, or better know as the Fed, began injecting money into the economy with trillions of dollars in stimulus.

Coupling this money with extremely low interest rates has created a hot environment for market growth. Companies can borrow money for extremely low rates, and businesses with loads of debt aren’t extremely worried since the payment on that debt is less.

It could be that we are transitioning into a new normal.

Look at all the data you want to try and figure out if we are in a bubble, but good luck.

You can find proof for either argument depending on which you believe.

Conclusion

The market has gone up over the long term. The only thing you can do is maintain some cash incase we do see a significant fall.

As far as for these other “asset” classes I think anything can happen.

Other than that, we are all just along for the ride.

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A nice recap of the last 365 days…

Thanks for reading, if you have any questions, comments, suggestions, etc. about the email send me a DM on twitter. See you next week!