In This Episode
- Walter's contrarian thoughts on the US Dollar
- Hugh's opinions on cryptocurrencies
- Not investment or trading advice
What's Going to get More Valuable in the Next Few Years?
We took a break from trading psychology topics to take a look at what we think might be the best trades for 2021 and the next 5 years.
It was interesting to compare notes and there were a couple of surprises that came out of this conversation.
Read the Transcript:
Hugh: Hi, Walter. I know we talked about Psychology here a lot but what do you think is going to be the big investment for the next five, maybe ten years? What do you see as things are going to trend up or trend down?
Walter: That is interesting. I want to be a contrarian and say that the US Dollar is going to appreciate from 2021 to 2023. So for the next three years I think the US Dollar is going to go up in value, believe it or not. I also think that gold is probably going to go down or stay about where it is. Which is also probably contrarian. A lot of people are bullish on gold.
I think that XRP or Ripple will go up because there will be a world financial system based on block chain. I think Ripple is the most likely candidate for that. So that will go up in value because there will be a lot of demand for it.
Right now if you send money, a lot of people may not know this from the trading world today because it is so easy to fund your account. It used to be back in the day when you fund a trading account, you would have to go to the bank. Fill up this long form and you would have to wire the money from your account to the broker’s bank account.
Make sure they have all the numbers correct so they could be credited to your account and all that. Because your money is like in a pool of accounts at the brokerage. What I didn’t know then though was that it was basically like an sms for banks. They were sending text messages.
Hugh: That is why it never worked the first time.
Walter: Exactly, it never worked. Anyway, with block chain it would be a lot safer. It will be instant. You don’t have to wait for the text message and all that. So I think it is already headed that way as you can see. The only real question is where. There’s three things I would say and I should mention the difference between gold in your hand, silver in your hand and buying paper gold, paper silver.
I think that physical gold, physical silver may actually go up in value but there’s kind of divergent markets now. I think the physical gold market is different from buying it on the charts or anything. That is important too to note.
I think the gold is going to be choppy. I think that Ripple will go up quite a bit in value in the next five years and the US Dollar probably is going to go up as well. I know everyone’s called the death of the dollar now but I think it is probably going to go up between now and 2023 but we’ll see. We’ll see what happens. What about you?
Hugh: What do you think? They are really printing right now. So in the next month or two to three years, it is still going to go up along with the stock market probably.
Walter: Yeah, I do not know.
Hugh: For me I think crypto is a good one, especially bitcoin. I think it is a network that is really hard to hack. It is almost impossible to hack it at this point. So I think a lot of people are going to use that as a store value. The underrated crypto, not underrated but the underrated asset or category of crypto is going to be like the privacy coins. So I think people are going to make it more into, like how to transact privately.
I agree with you, I think gold and silver are still going to be controlled. So they're just going to go side wards even though they should be worth more. I think commodities are going to be a big one. Especially food, food stuff I think those are going to start increasing in price because there is going to be shortages around the world.
So it could be something to watch out for. Obviously not advised. We are not giving any advice here.
Walter: That is interesting. I think you are right. Specifically, water is a big one. So in those countries like the US and Australia where you can actually buy rights to water I think that is big. In fact I have a friend who trades that. That is his job; he trades in the water-rights stuff and the water market.
It’s a very liquid you know in Australia, it is not a big market but I think water is the key. Water is one of those commodities that is going to be a big deal. You are absolutely right about that.
Hugh: Hey there! I hope you find this episode useful. I just want to let you know that Walter and I give away something valuable every month that helps traders improve their skills. You can enter to win by simply leaving an iTunes review and leaving a comment on our YouTube videos.
At the end of each month, we'll look at the comments and reviews from the month and we'll pick a winner at random. Each comment and each review counts for one entry during the month that it's pitted.
So, if you're interested in that, be sure to enter after this podcast is over. Alright, back to the episode.
Walter: I know we mentioned the stock market earlier. I do think that stock markets like the UK, Germany, Australia and US I think by the end of this year, by the end of 2021 they are probably going to start to roll over, that is my belief. That by 2023, the highs will have been obvious. I think it is going to roll over.
I think there’s a little bit of you know, like I was saying that the US Dollar is going to go up in value with that the stocks will go down. So right now what we see is the purchasing power of the US Dollar is down. So the stocks have to go up to stay the same.
I think that the opposite might happen where if the US Dollar becomes more valuable, the stock market prices might actually go down. Even though relatively at the start you may argue that they are the same or maybe a little bit lesser in value but you know.
I just think my sense is that it is starting to roll over. So we’ll see what will happen. I think the interest rates are going to be the key, that is an important thing. As currency traders we should always look at those anyways.
The interest rates are really one of the most important things for the currencies that you are trading. But certainly, I think that maybe kind of the first downward to fall and then we’ll start to see these sorts of things unravel.
We’ll see, though it is kind of fun to see where are the cryptos? Where are the stocks? Where does the money flow when the money starts to get more expensive? Because when you think about it, anyone who is alive today has never seen money this cheap.
It is so cheap to get money. In fact that is what they say here in Australia. The auctions from property you know the Auctioneer will go up there, it is really big like common for Australian properties to sell by auction. Not all but a lot of them do. Much more so than in the US or in England.
So they’ll say things like, “Money has never been cheaper. Let’s get the bids rolling.” This money has been so cheap and so where has it been flowing? It has been flowing in the stocks and artwork, in cryptos and you know classic cars. All these places and so then when it starts to get more expensive, what happens is, in property of course, where does it move from there?
Where is it going to start flowing? Do you remember the years we grew where we had the obvious carry trade? Where money was flowing from Japan where it was cheap, to London where it was relatively expensive. You always have this idea of money moving to different geographical locations. Well now, it is cheap everywhere.
So people are just sinking it into what they think is going to be good. Which is cryptos, property, shares. I would argue even the artwork and even like trading cards have been inflated in value because of this.
Hugh: Also, things like NFT’s, right?
Walter: Exactly.
Hugh: Like when my parents bought their house, I think the interest rates were like seventeen percent or something like that.
Walter: Exactly.
Hugh: It is cheap compared to that.
Walter: People do not know. People who are like thirty years old, they do not have any idea about what happened in the seventies. They have no idea. I had mentors who lost everything in the seventies. These are older you know getting up there in years and they tell me stories about the seventies and it was crazy. Like, “I lost all my properties. I lost three businesses.”
I guess with the virus and everything, we kind of have a taste of that in a way. It’s different to like seeing all these cars lining up to get fuel and all the loans that you can get like twenty percent, nineteen percent you know and all that stuff.
So it’s a different kind of story. Everyone’s out of work too. That was the seventies and people forget about that.
Hugh: So read up on your history, people.
Walter: That is the lesson.
Hugh: Thanks, Walter.
Walter: Thanks!
Hugh: All the information in this podcast is for educational and informational purposes only and is not trading or investment advice.
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