dStocks letter 2022/44

Editorial

Last Wednesday (02 November 2022), the Fed raised the key interest rate for the sixth time in a row and has now reached a level of 4%. At the same time, Jerome Powell signalled in his speech that there are currently no intentions to lower interest rates again. In his words: “We have acted swiftly in recent months — and that was appropriate. At the moment, it looks like we can take it a little easier in the future. But the policy rate is likely to be higher at the end of the tightening cycle than many have assumed so far.”

Inflation data continues to look not so rosy, but every business wants to continue to exist in difficult times. This is solved by raising the prices of final products or services to the end consumer. Statistically, the profit margin is currently at an all-time high compared to the average profit margin achieved since data was collected in 1962. In short, end consumers are paying more for products and services than ever before.

Nevertheless, we dare to take a small look at the future development of key interest rates. In difficult market conditions, good information is important in order to position oneself accordingly in the market. We expect further hikes in the key interest rate next year of between 0.25–0.75 percentage points to a total of around 4.75–5.5 percentage points. If we see higher values, we will reassess the situation at the appropriate time and position ourselves in the market accordingly.

DeFiChain

News: It is currently very quiet around DFI. In the background, however, a lot is being built and tested. This includes the long-awaited DFI Metachain, which is expected to go live in Q4_22 — Q1_23. Also, many startups continue to work on their services based on the Chain. DFX, Cake, dStocks etc.

New assets: last dToken voting round 2022 is coming up (voting start: 22 November 2022 / end on 29 November 2022 / DEX listing on 2 December 2022 / reward distributions start on 5 December 2022.

CFP/DFIps: Last round in 2022 starts on 7. November 2022, applications can be submitted until 14 November 2022 and voting will take place until 21 November 2022. All who have a masternode are entitled to vote. 1 masternode = 1 voting right.

Sample portfolio

Gewinnmitnahme dMSTR +4.84%

Stock analyses

dEEM — Emerging Markets ETF

Current: The MSCI Emerging Markets Index is an international equity index that tracks the performance of companies from 24 emerging markets. With approximately 1,400 companies worldwide, the MSCI Emerging Markets Index reflects approximately 85 per cent of the global market capitalisation in emerging markets.

Figures: This ETF’s 10 largest positions are.

5.36 % TAIWAN SEMICONDUCTOR
3.58 % SAMSUNG ELECTRONICS
2.94 % TENCENT HOLDINGS
2.14 % ALIBABA GRP HLDG
1.69 % RELIANCE INDUSTRIES
1.26 % MEITUAN B
1.12 % INFOSYS
1.02 % ICICI BANK
0.92 % HOUSING DEV FINANCE CORP
0.92 % VALE ON

Political intervention: Because dEEM is a global ETF, we have no risk that anyone will ever oppose this ETF with political force.

dFB — Meta Platforms

News: On 26 October 2022, Facebook published its figures for Q3_2022. Expectations on the part of investors and analysts were not met and therefore punished the share properly. Meta (formerly Facebook) Q3/Q4_2021 downturn. Also, the rebranding from Facebook to Meta did not bring anything until today. In principle, name changes are a sign of reorientation or an attempt to re-establish oneself in the market. Facebook had acquired the naming rights for Meta. Meta originally comes from the crypto world Meta-Verse.

Figures: Meta’s Q3 revenue is just under $28 billion. This resulted in a net profit of 4.4 billion US dollars.

Political interference: Past disregard for privacy has cost the former Facebook some trust. Mark Zuckerberg has had to appear in court several times. This will certainly happen again in the future, as Instagram & WhatsApp also belong to Meta in the meantime. The more social services that belong to Meta, the larger the attack surface.

dGLD — Gold

News: The well-known advantages of gold over the centuries have been reinforced by the various events (including the outbreak of war between Russia and Ukraine, as well as the pandemic that was once launched). I was able to witness first-hand how emotions came to a head and suddenly many people returned to the topic of gold. History shows that it has never been wrong to hold gold as diversification or as an anchor in one’s portfolio.

Numbers: Gold reserves stored in banks worldwide amount to about 30,000 tonnes of gold.

Political intervention: Gold was once banned in various countries from time to time (private ownership). I rule out a new ban by 95%, because if there is ever to be another gold ban, Bitcoin will be tried to be banned first. I think the time of gold is coming to an end. I’m talking about the end of the cycle that could last for centuries.

Crypto

Current market situation: Bitcoin’s momentum was boosted by the Fed’s decision (the rate hike came as expected by most market participants) and the upward trend continues very slightly. Whether this will continue is questionable. The decisive factor for whether we can continue to follow the trend is the announcement of the inflation figures from the USA on 10 November 2022 for the month of October 2022. We do not expect any big surprises here. If this happens, the current trend will most likely hold and continue.

Important to mention in the crypto market: Since Bitcoin and the crypto world are currently equated with the classic financial market, the trends here also follow the share prices. Bitcoin will, however, decouple from this over time (we are talking years here), as soon as the majority has understood what Bitcoin really is. Whether the final decoupling comes quickly or slowly remains to be seen. A slow final decoupling would be healthier.