dStocks letter 2022/43
More than 30 years of experience in the financial markets go into this reading letter and exponentially more experience is added over time. Exponentially, because there is a whole team behind it.
Dario Petrone:
For me, mathematics is a language that offers no variations, but always reveals a clear result. One plus one always gives two and cannot be manipulated. Early in my life I realised that I had a flair for numbers, but I didn’t know how to use it.
Today I have found my passion and can look back with gratitude! I now know how to use my gift. In addition to mathematics, I developed a self-taught personality, which enables me to find many new ways out of nothing. Now I stand there and can make the dSTocks letter available to the world in collaboration with www.dstocks.io.
I have specialised in the niche of decentralised assets on the blockchain. It is absolutely logical to me that a parallel world is just opening up in opposition to the controlled financial world.
Matthias Nagele:
It is rare to meet people in life with whom you immediately realise that you are on the same wavelength. It’s even rarer to be lucky enough to share the same interests with them. When I met Dario, it was clear to me that I had had such rare luck.
Hello, my name is Matthias M. Nagele. As co-founder of dStocks.io, it was clear to me very quickly: It doesn’t just need an ultimate trading tool on the DeFI chain, it also needs additional ultimate information tools!
Together with Dario, we want to lay the foundation for this ultimate information tool today. Our team may still be quite small, but it will grow with every new reader!
Trading system
To provide our trading system regardless of the capital invested is based on 3 risk levels Level I (0.5%), II (1%) & III (1.5%). The percentage indicates the maximum loss of a trade in relation to the initial capital invested.
We ourselves feel most comfortable with level II.
Mathematical formula: Risk level in % / (capital — stop loss) = number
Foreword (General Economic News)
On 27 October 2022, the European Central Bank (ECB) raised the key interest rates by 0.75 percentage points to the main refinancing rate (top lending rate) of a total of 2 percent. This will come into effect on 2 November. The market hardly reacted to this event. This is another good example of the need to continue to pay close attention to the US figures. We can say from past events that there is much more movement in the market on the corresponding publication dates of the figures from the USA.
The new CPI data from the US will be released on 10 November 2022. This will provide movement and clarity on the market.
Elon Musk finally buys Twitter. After almost 12 months of back and forth, the deal is now done. “The bird is free” he posted on his Twitter channel on Friday, 28 October 2022.
DeFiChain — News
CFP voting round
Submission of CFP’s until 7 November 2022, then voting starts on 14 November 2022 and ends one week later on 21 November 2022. Last time (off-chain) before this is to be done on-chain in 2023. The on-chain solution offers to represent the voting results without manual intervention in the future and serves to strengthen trust again.
Community projects
Jevlis (Cashflowbuttler):
Lock: Lock Space on Twitter
DeFiChain Meta: Test network goes live in December 2022
New dStocks: Q1_2023
CFP/DFIP Results: WEEK 47_2022
Sample portfolio
The decentralised active equity portfolio
The decentralised passive equity portfolio
Share analyses
Credit Suisse — dCS
News: Credit Suisse (CS) has repeatedly been in the headlines for a few months. And not without reason. On Thursday, 27 October 2022, Ulrich Körner announced that almost 9,000 jobs will be cut in 3 years. Such statements/events are always made to put a company in a better light. Whether this will work for CS remains to be seen.
Figures: Since the financial crisis of 2008/2009, the CS share has only known the way south. The chart speaks for itself in this case. On Thursday, 27 October 2022, the share fell briefly to an ATL (All Time Low) of CHF 3.52.
Share chart
Political intervention: UBS was once rescued from collapse in 2008. Whether the same will happen with CS remains to be seen. Basically, the narrative “too big to fail” also applies here. I see the probability that CS will be rescued by the state (the people) in an emergency as more likely than that it will be allowed to go to the wall.
Walt Disney — dDIS
News: The last two years the theme parks had to struggle extremely with the Corona regulations and it hit the profits. Basically, it can be assumed that the Corona story is over by now and that you can visit the theme parks normally again if you take certain measures. An increase in turnover can therefore be expected for the coming years.
Numbers: Disney+ has done very well since its release in 2019, slowly fighting its way out towards Netflix with subscribers. It had around 150 million registered users as of June 2022. Basically, streaming services are facing a growing market as more and more people are getting access to such services through the internet. Entertainment has been important to the human race for as long as we have existed.
Share chart
Political intervention: With the outbreak of a virus, it was easy to see which industries were hit first. With restrictions on public life, Disney was directly and massively affected, at least in the theme parks. I see an increased risk that political intervention can lead to negative effects at Disney.
Alphabet — dGOOGL
News: Google is not immune to the cooling market. After the sharp slide on Wednesday, the Alphabet share has fallen below its low for the year so far. Whether the strong reaction on Friday evening represents a turning point remains to be seen.
Figures: Turnover increased by 6% compared to the previous year, but earnings per share fell from 1.40 to 1.06 USD. In recent years, YouTube in particular had contributed to Google’s strong growth. However, this is now also in slight decline in terms of revenue. However, the cloud business is still booming and now generates a turnover of 6.9 billion USD. The operating loss has now increased to USD 699 million.
Share chart
Political intervention: Alphabet basically has nothing standing in its way. They are several steps ahead in this world, enjoy a corresponding monopoly of power and use this to their complete advantage. Nevertheless, certain points need to be paid attention to. Especially in current times, where the world is spinning faster and faster and unforeseen events (e.g. war) can quickly turn a company around.
Cryptos
Current market situation: We have been experiencing a slight upswing since the end of last week. This is always possible in bear market phases and can often lead to false signals in that one quickly feels hope again for a longer and stronger upswing. Usually the opposite happens or the hope dies relatively quickly when one comes back to reality. The current bear market can easily last another few months, if not years.
Important to mention in the crypto market: Dogecoin literally jumped for joy after the story with Twitter and Elon Musk was announced. However, it is important to know that such price jumps are rarely sustainable and will eventually approach the true value of a coin. If you were already positioned in Doge at an early stage, it can currently be interesting to take a partial profit.
