The Daily View: 12/23/2023 Bitcoin Scorecard, Nike Earnings, Trump, and Seed Oils

Item #1: Bitcoin scorecard.

A Bitcoin ETF may be approved, but if so, it’s an inferior version, called a cash redemption model, and not a ‘true’ ETF. This cash redemption model is a compromise between the issuers and the SEC, instead of outright rejection:

exchange-traded fund (ETF) issuers iron out details of their filings with the United States Securities and Exchange Commission (SEC), the regulator appears steadfast in demanding a “cash” redemption model instead of an alternative model proposed by other issuers such as BlackRock.

David Gerard discusses in more detail that it’s not a true ETF.

If it’s approved, I was wrong about it being rejected, but it’s not a true ETF, so I’ll call it a wash on that one. I was wrong about it breaking below $25k, but right about it lagging the 3x tech funds for the year, so those two predictions cancel out. So one prediction wrong, another one right, and the third one a split. Overall score: 50%.

Item #2 Nike stock crashes 12% on weak earnings outlook:

Nike is down slightly for the year compared to double-digit gains for the S&P 500. I singled out Nike many months ago as an example of wokeness gone wrong; in this case, the body positivity/inclusivity ads. Equating what is supposed to be a sportswear company with obesity continues to backfire. There is nothing wrong with selling plus-size clothing (fat people are a big market), but putting it front and center damaged the brand.

There is a reason I keep recommending the same couple dozen stocks and not deviate much from that. Wall St. is one of those things where unless your strategy is dialed-in, you will eventually get your ass kicked and not recover. There is no second-best or second place, and little margin for error. Every company must fill a specific niche and be dominant at that. obviously this is not not a descriptor that applies to most people. Most people are better off with index funds for this reason.

Unlike Nike, InBev, or Target, the reason wokeness does not backfire for ‘big tech’, ‘big payments'[1], or ‘big healthcare’ is because the companies are so dominant and indispensable. There are dozens of athletic sportswear brands that more or less are interchangeable in terms of functionality, but how many social networks which have a quarter of the world population on them? How many iPhone alternatives are there? Either Android or iOS. Or Apple App Store alternatives? The only other choice is the Google Play store, in which the apps tend to be worse and not as well-vetted compared to iOS.

Item #3 Trump is still free and the presumptive nominee. In August 2022 during the FBI Mar-a-Lago raid, in which pundits on either side of the aisle were sure Trump would be behind bars and even disqualified from running , I correctly predicted nothing would happen: the Mar-a-Lago investigation turned up nothing, and Trump spent no time in jail. Technically, he was photographed for a mugshot for an unrelated matter (election interference charges) but spent no time behind bars. It’s not even worth following this stuff that closely because these stories blow up for a few days and then fizzle out just as fast.

The deep state arresting Trump to disqualify him seemed too obvious and lacks imagination, which is why I never gave it much consideration. Also it could backfire at the risk of engendering societal instability and possibly a retaliatory blowout turnout against Biden and future Democratic candidates. Either of these is worse than Trump being free. It’s also useful to keep Trump around by luring and subsequently arresting his supporters, who are easier targets, like Jan 6th protestors and his campaign staff.

Item #4: I updated my article about seed oils.

The problem is a lot of health advice is generally useless. The irony is that obesity is a medical problem, yet the instinctual answer is to reach for non-medical solutions, like ‘eat less and move more’ [2]. Nor will it yield to simple or strait-forward solutions such as to eliminate seed oils, or by eliminating carbs. Given the terrible track record of lifestyle or homeopathic solutions, any hope of solving obesity requires the full arsenal and ingenuity of modern science, and nothing less. We’re talking changing how the body works–from the brain to the gut–at a fundamental level here.

Same for unhelpful or dumb advice such as to ‘eat less calorie-dense foods’. For food to be food entails a minimum density of nutrition of the three macros. Otherwise, it’s not food. To try to bypass this requires either adding water or air–so-called ‘volume eating’, but given the numerous self-reported failures on Reddit of this strategy, the body is not easily fooled. Often, volume eating leaves people feeling temporarily full but still unsatiated, or soon starving after the water, fiber, and air is quickly absorbed. Similar to GLP-1 drugs, we need better advances at adding non-caloric mass/substance to food instead of only water or air. Same for self-reported weight gain with keto, which is a very common problem despite how people keep insisting that the diet works. As it turns out, deliberately eating a lot of fat can make you fat, being that it’s the most calorie-dense macro. Who knew.

Instead of billions of dollars raised and spent on Ai, why isn’t there similar enthusiasm and investment for food engineering. This is people’s health on the line here, and there obviously would be huge demand (as evidenced by the success of Halo brand and others).

[1] Visa and MasterCard

[2] Sure, eating less is often necessary to lose weight, but overlooks the inherent difficulty and poor track record of long-term voluntary calorie restriction. Gym attendance is at record highs. Planet Fitness stock is up 5x since its IPO in 2016, and Americans are arguably more active than ever, but also fatter than ever. The issue is not that people are not aware obesity is bad, but are unable to anything about it.