Cocktails and dreams

Happy Friday!

Let’s poke the bear a little…

Before you look at the charts below from First Trust, I did NOT compile the data, build the chart, or even pick the colors. All I did was copy and paste the charts below, so don’t go nuclear on me if you don’t like them.

Speaking of First Trust, I read a report from them this week that highlighted some interesting stats that are from the CDC. Since the peak in COVID cases on January 21^st, here’s what’s happened:

• 73% decline in cases
• 54% decline in deaths
• 71% decline in hospitalizations
• 96% decline in nursing home cases
• COVID-19 patients occupy 12% of total ICU beds
• Only 5.9% of inpatient beds are being used

Now that Texas is open and other states are following suit, expect more to come. This is all good news for the economy.

Shifting gears, this is an interesting chart that shows retail trading now accounts for almost as much volume as mutual funds and hedge funds combined. However, given the average Robinhood client’s holding period is measured in hours/days and any fundamentally-driven fund tends to hold for months/years, try not to read too much into this. 

Lastly, this story about some artist named Beeple selling some NFT artwork for $69 million through Christie’s yesterday is as upsetting to me as it is to you. To start, I don’t get art at all. Not just as an investment either. I have no eye for it. Some is impressive I guess but most does nothing for me. 

But a lot of people do get art and buy it because they feel they have an edge. This market has been around for hundreds of years and probably won’t go anywhere. It’s established.

When it comes to NFT art, there’s an old saying that pioneers end up with arrows in their backs. I’m curious how this will play out. My half-baked conspiracy theory here is that the buyers of NFTs are also the sellers. 

Case in point. Jack Dorsey is selling the rights to his first tweet as an NFT. Bidding is now in the millions. There is simply no way anyone other than Jack Dorsey is bidding up the price of this narcissistic asset. So yeah, this mania around NFTs could very well be a scam.

If it’s not, then this is the first stab at a new tech/idea that will likely require a few more iterations to get right. Creating network effects around new ideas and markets takes a long time, so we shall see. Perhaps the $1.9 trillion that just got passed will act as the tailwind needed to support NFTs. 

I’m not smart enough to know what will happen next, so I’m going to do what I always do in these situations, which is quote an 80s movie…

“Everything ends badly. Otherwise it wouldn’t end.” – Brian Flanagan (Cocktail)

Enjoy the weekend…