I voted!

No, not politics but Otto’s survey. Just go to IKN and look for the “WHICH WILL BE WORTH MORE AT END 2015?” poll on top of the page.

Before you vote, here’s my thoughts on each option:

1) AAPL: Not sure how much upside there is left after the past few years or what the margins are on mobile devices now that they are ubiquitous. Any monkey could have told you that but did you know that the proliferation of mobile devices gave birth to something called big data? Put simply: everything you do is recorded and analyzed. Your mood, location, places you’ve shopped at, relationships, etc. Feeling stressed out? Don’t be surprised to see a coupon for your local day spa on your smartphone. Walk into a bar? Expect an ad for a “get you home safely” taxi service on your trusty device. Ended a relationship on a social network? Book a comfort-sex trip to Kenya with any of our preferred travel partner sites. AAPL doesn’t really use “big data” in their business plan but their devices make it possible for others to do so. Did you know there are private, for-profit companies who will sell your current and recent location to anyone based on GPS data embedded in publicly available social-media posts? George Orwell was wrong about one thing only: the date was off by 30 years.

2) Bitcoin: I don’t understand it being used as a currency but you may be surprised to know that Bitcoin has serious implications for online security. Bitcoin is based on “mining” computer hashes, similar what is used in cryptography. As a result, cryptography that was considered secure only a few years ago is now trivial to break because Bitcoin miners have learned how to exponentially increase the speed of hashing (particularly by applying graphic processors or GPUs instead of CPUs). It used to be if a company like Target, Home Depot or JP Morgan got hacked, encrypted data on their servers such as passwords was relatively safe. Now this data is exposed and sold in no time. This combined with the existence of a shadowy industry where you can sell computer vulnerabilities to the highest bidder (ie. governments and businesses) means there is a tremendous incentive for hacking.

3) Gold: It’s shiny. For more wisdom, ask Otto because I don’t know.

IKN Chart of the Day

I caught a glimpse of Otto’s chart of the day over at IKN and shamelessly swiped the same:


Remember when gold was $1,200 and going up? The gold nuts said it was never ever gonna end? Of course neither was the real estate bubble, the internet bubble, RCA in the 1920s and 30s or tulip mania long before that.

Gold is a fickle thingy and I have no earthly idea where it’s going next. Maybe all the retail investors are dumping gold to jump in the big DOW / S&P500 comeback? If that’s the case surely we should call a top in the DOW / S&P500 in the next 24 months or so?

Hey Otto: special request, how about an S&P500 chart expressed in ounces of gold? See if that tells us anything.

I’m sure far more intelligent commentary could be scribbled here but a double shot of Jamaican rum and some fine music will do:

PS: On a serious note, I haven’t seen main street Peru react to the lower gold prices, there is still this “party will never end” attitude and that could be trouble: with the good macro numbers that Peru had been posting on the back of rising mining revenue also came an increase in consumer credit, imported consumer goods, declining trade balance, etc. Not saying end of the world is coming but I doubt Peru’s internal economy is as strong as many have come to believe.

PPS: Even I had something to say about gold going up at $12 something.