Bitcon. Everything interesting last year was overshadowed by dreary nonsense about bitcoin and so-called cryptocurrencies – even into 2018. Cryptocobblers more like. I’ve heard some poppycock in my time, but all this rot really takes the biscoin (last pun, I promise).
A couple of years ago there were only a handful of cryptocurrencies. Today there are more than 1,000. Fans say the idea behind them was to develop a currency with no borders or tariffs and no political interference or governmental control. It was an exercise to spark a new revolution.
Balderdash. Bitcoin and its cryptocronies are playthings invented by tech nerds as an intellectual pastime, and they’ve gone way too far. It’s a global excuse for money laundering and tax evasion, because crooks are much smarter than geeks and governments.
First, someone produce for me a punter who has paid off his mortgage with bitcoin, bought a car or exchanged one for goods in WHSmith. You can’t. So it’s not a blasted currency then, is it? I’m with Jamie Dimon, JPMorgan boss, who says bitcoin proves the world’s appetite for money laundering and tax evasion is alive and well, although he has since retracted the idea that Bitcoin is a fraud. Secondly, what the hell has it to do with investing? It’s a speculation upon a guess upon a proposition, all based on a facile non-entity.
Real technology play
Meanwhile, as one is inclined to do at this time of year, I have been flipping back through some of my previous musings, notably from a couple of years back, to see how things have panned out for us prospectors in the investing stream. Just to prove I am no Luddite, in my view ‘real’ tech has played out well and will continue to do so in 2018.
I was looking back at the views expressed in January 2016 by Richard Penny, until very recently the manager of the L&G UK Alpha fund. The fund has enjoyed a tidy couple of years. Penny’s stated investment in real tech innovations in sectors such as biomedics and biotechnology, linked in with chunky investments in the ever-growing healthcare sector, subsequently led him into green pastures – a unit price uplift of more 50 per cent, from around 130p to an ask of 198p.
There have been ups and downs in the sector over the past two years, of course (as there have in the fund). But as was predicted back at the end of 2015 by both Penny and Neil Hermon, longstanding manager of Henderson Smaller Companies, tech has been an ideal play through which to take up the slack from the retracting oil and gas industry.
Having said that, over the past two years, the old soldier BP has gone from 328p at the opening of 2016 to achieve 530p in Jan 2018. That’s what we call recovery, but I’m sceptical that the big oils can replace lost revenues before investments in new energy technologies bear fruit. I might hang on for a bit, but I am utterly fascinated by the doings of the eccentrically brilliant billionaire Elon Musk, owner of, among other things, electric carmaker Tesla.
As a society, we are not quite prepared for electric transportation, and we certainly do not yet have the infrastructure to support it, but there is no doubt it is on the way and here to stay. The key to solving the difficulties of this new format, and for that matter the entire world of renewable energy, is a means of storing electricity simply and effectively. I think Musk showed the way forward with this in late 2017, when Tesla built a battery farm in South Australia in less than 100 days to store the power created by a giant offshore wind farm.
Time for Tesla
Tesla is listed on Nasdaq (TSLA). The share may not have enjoyed the smooth ride offered by Tesla’s motors, but it has nonetheless shown an 38 per cent uplift in the 12 months to date and now rests at a price above $315. That’s a big price, so the really curious investor may want to look further downstream for better value, but I like this established share.
Finally, as for banking, we are beyond the era now where banks can treat their customers with more cynicism than that with which these customers view the banks. This entrenched mutual cynicism in my view means the game is finally up for the old banks.
We have seen a surge in new mobile- and digital-only banks coming through, including Starling Bank. It’s a hugely innovative mobile only bank whose chief executive, Anne Boden, was recently heard to say: ‘In 2008 the banks had the biggest chance they have ever had to rebuild themselves differently. But they didn’t. They just put themselves back together in the same old way. They really messed it up.’
Even if the RBSs and the Lloyds of the world can catch up or acquire these new outfits in time to rescue themselves, they will, to use Boden’s words, only mess it up.
So fellow punters, out with the old and in with the new for 2018, I say. Just don’t mention bitcon or I’ll scream. And in cyberspace no one can hear you scream.
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