Womack Investment Advisers

The cryptocurrency Bitcoin generated considerable interest in mainstream financial media as it neared $5000 per “coin” at the end of August.  With a 500% increase over the past year, many naïve buyers have rushed in recently.  But over the past two weeks they have discovered that “what goes up can go down”.  Bitcoin plunged  -38% from September 1 to September 14 (see the following chart).  The precipitous decline followed comments from Chinese officials that the government was looking to ban exchanges dealing in Bitcoin, and JP Morgan Chairman Jamie Dimon called Bitcoin a “fraud” during an appearance on CNBC.  So, if you are tempted to invest in Bitcoin, just be aware that eye-popping rises can be followed by stomach-churning declines!  The following chart (from coinbase.com) tells the story of 9/1 to 9/14 - the two weeks in Bitcoin hell. 

­Womack Weekly Commentary September 18, 2017 The Markets “In theory, there is no difference between theory and practice, in practice there is.” Yogi Berra was talking about baseball, but the concept also applies to diversification, according to the GMO White Paper, The S&P 500: Just Say No . From the title, you might think the authors – Matt Kadnar and James Montier – don’t like U.S. stocks. They do: “Being a U.S. equity investor over the past several years has felt glorious. The S&P 500 has trounced the competition provided by other major developed and emerging equity markets. Over the last 7 years, the S&P is up 173 percent (15 percent annualized in nominal terms) versus MSCI EAFE (in USD terms), which is up 71 percent (8 percent annualized), and poor MSCI Emerging, which is up only 30 percent (4 percent annualized). Every dollar invested in the S&P has compounded into $2.72 versus MSCI EAFE’s $1.70 and MSCI Emerging’s $1.30.” The au...