Permanence is not Permanent
By: Liz Kaufman
Over the past few weeks both the crypto and stock markets have had large corrections. Don’t worry. The ebb and flow of the markets are natural. Remember, they are not fueled by unfeeling mega robots, but on the emotions of humans. Emotions are a finicky thing. Crypto leaders like Ronnie Moas, have been excited to see this correction and are encouraging people to take advantage of it rather than stray away from it. While my friends in the stock market are pretty sure their hair is on fire:
“The economy is terrible.”
“Banks are panicking.”
“No one is investing or lending.”
“How will we recover.”
Their pervasive nature made me want to use my inner Cher on them.
— SNAP OUT OF IT!
Consider this, the DOW only hit the 20,000 mark one year ago, January 25th, 2017. On February 12th, at 1pm EST the DOW was at 24,597. This week I had someone ask me, “why crypto? I do not understand what is backing it.” I understood the heart of their question, however I countered with, “what made the stock market climb to 25,000?” Their answer was, “the new tax law.” I did not understand their answer, just as they do not understand crypto. A law that has little current impact on the corporate world is driving speculation that companies are going to have an amazing fiscal year due to a tax law. If we all stopped buying Apple products that law would not do anything for their corporate value.
So, I come back around to my point — Permanence is not Permanent. A new phone will be created, blockchain will begin replacing traditional financial methods, and this “new tax law” will eventually be replaced. Change is inevitable, and with the driving emotions of humans, the markets will fluctuate. What can we count on? I think the answer is the same for both the stock and crypto markets (this is my opinion):
Demand
Do people want what you are selling?
Solution
Does the product solve a major industry challenge that will have a positive
ripple effect?
Innovation
Is the product disrupting a current industry pillar, thus replacing it?
Future
Flash in the pants, or a long-term corporate and product roadmap?
Any one of those is the seed that grows a company into more than just speculation. Delivering big value to customers, and often, will only continue to create market value. One company that is a shining beacon on how not to do this is, Kodak. Tax law speculation alone would not have saved them from the digital age replacing their core business. However, if they would have innovated beyond, and not seen digital as death, they would have thrived.
On the other side of the coin are companies like, Expedia. I realize this is not the example you were expecting but they embraced both the digital and information ages with grit and gusto. What I recently saw made me a loyal Expedia customer (having just booked three different trips with them). As I was checking out I was presented with the option to pre-pay or pay at the hotel. In the pre-pay box was the option to pay with BitCoin. Boom — embracing the cypto revolution. Looking to grow with their customers rather than being outgrown. Supplying a global currency payment method is keeping them relevant. Additionally, they are driving demand for BitCoin, thus pushing up its value. It is the circle of life, or at least our financial life.
Our economy has moved through the industrial revolution, wars, a major depression, recessions, the digital revolution, and now we are in the middle of the information age. Nothing is permanent. In fact, things are changing faster than ever. Expect change and you will never be disappointed by market corrections. Investing in companies that embrace demand, solution, innovation, and our future will keep you focused in both the crypto and stock markets.
This ‘opinion article’ was brought to you by BUILD1x Marketing Director:
Liz Kaufman
We would like to hear about your opinion via our Telegram group chat:
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What do you look for when investing?
Do you think the DOW was being driven up was speculation?
What traditional business models are evolving to meet the crypto revolution?
Is there a better Slap GIF you would recommend? ie Cher.
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