Desert Island Stocks: Know When to HODL
Desert Island Stocks: Know When to HODL
A Look Back, and Forward, for Apple and Bitcoin
[Editor’s Note: As part of our mid-year review, Bill Patalon interviewed friend and expert tech expert David Zeiler about 2024 so far — and what comes next. Here’s a transcript of their talk.]
Hi folks, I’m Bill Patalon, co-founder of Stock Picker’s Corner (SPC) … and I’m here with my longtime friend, frequent collaborator and fellow Substacker “OG Dave” Zeiler – an expert on Big Tech, innovation and crypto.
He’s a well-known expert on Apple Inc. AAPL 0.00%↑– he interviewed Apple co-founder Steve Wozniak “back in the day” – and contributed to our workup on that company’s “Next Acts” earlier this year.
And when I was running my previous investing newsletter, I watched as Dave found success as an early solo Bitcoin (BTC) miner … back when individuals could still pull that off.
Yeah, as “OG Dave” likes to say … we’re “Old Pals.” (I never tire of hearing him say that.)
In our chat here today … we’re going to do some MORE important work … and look at “what’s next” for the financial markets.
And that’s not all …
Dave and I make a point of infusing fun into whatever we do … so we’re going to have a little fun here …
Dave’s agreed to play the role of “Desert Island Dave” – and be the next contestant in our “Desert Island Stocks Challenge.”
WPIII (Q): Welcome Dave … nice to have you back.
DZ (A): Glad to be here, Bill. Nice to be back again.
And you’re right … we ARE old pals …
WPIII (Q): From the two-plus decades we’ve worked together – in journalism and in newsletters – you know the drill.
It’s the midpoint of the year … so I’m asking folks in the SPC network for their top observations about the 2024 first half.
And what they’re forecasting in the second half … and into 2025.
OK, Dave …
It’s been a fascinating first half of the year … in stocks, for sure … but also in cryptocurrencies like Bitcoin …
And also with some stocks like Apple.
And it’s amazing … because – as we chronicled here - you “called” it right on both.
DZ (A): Thanks, Bill.
WPIII (Q): [Nodding] Sure thing.
Now … for anyone who missed it … I gotta do a quick review.
In early March, you authored a “Bitcoin Guide” for us. And aided us with our Dossier for SPC Premium members on crypto.
The bottom line: You (correctly) predicted a modest surge in Bitcoin for this year … but then looked ahead and projected a big year in 2025.
You were also dead-on/bullseye accurate with Apple.
In our interview in May – about Apple’s AI announcements at the early June Worldwide Developers Conference – you pretty much NAILED that Apple would announce a “platform strategy.”
You also said Wall Street would initially sleep on the magnitude of what the company unveiled … but would then have a belated epiphany.
With all of that … you were correct.
DZ (A): I’m blushing.
WPIII (Q): And you do it well …
[Both men laughing]
Okay … let’s get serious … let’s talk the first half of this year …
What were the key developments?
And what, if anything, has surprised you about the year’s first half?
DZ (A): For me, the launch of the 10 Bitcoin ETFs in January was the biggest thing, something Bitcoin investors have been anticipating for more than a decade. The ETFs make investing in Bitcoin easier for retail investors by removing the tech hurdles, while opening the door for institutional investors that were restricted from investing directly in such unconventional assets.
Another key development – and this one did surprise me a bit – was the two pro-crypto votes in Congress this year. And with bipartisan support, no less! Given the attacks on crypto by members of Congress in the past, this represents true progress.
Crypto regulation still has a long way to go, Bill. But this was a sign that a majority of lawmakers now realize that crypto is not a threat … but an opportunity.
The other thing that held my attention was something you mentioned a few minutes ago, Apple’s AI event.
WPIII (Q): You’re referring to the early-June Worldwide Development Conference, or WWDC …
DZ (A): That’s right, Bill.
As you know from the workups we did together … the WWDC … that was probably one of Apple’s most-significant presentations … in years – years.
It’s clear that Apple has a deep strategy to integrate AI throughout its ecosystem – which will create many avenues to monetize that landscape-shifting technology.
Staying with the first half …
One thing Apple did that actually surprised me was killing the development of the next version of the high-end Apple Vision Pro in favor of concentrating on a more affordable version of it (which it was already working on). I didn’t think Apple would give up on the fancier version so quickly, although from what I’ve read sales of the Vision Pro haven’t met expectations.
WPIII (Q): What about the cancellation of the Apple Car … announced in February? You were on record like six years ago saying that project didn’t make sense.
Six … years … ago.
DZ (A): [Chuckles] Damn, Buddy, you have a good memory.
Yeah … I remember doing a story for a financial publisher– where you and I worked before – expressing some major skepticism about the Apple Car. Lots of Apple-Watchers seemed to think an Apple Car would be the company’s “Next Big Thing” …
When Apple scrapped it – that’s what they do with cars, right, scrap them? – when the project was scrapped, I cheered the decision.
WPIII (Q): OK, Dave … what are you expecting for the year’s second half … and into 2025?
For Bitcoin … for Apple … but also in general.
What will do well?
Where are the problems hiding?
What should we watch for? Any “wildcards?”
Wanna start with Bitcoin?
DZ (A): Sure, Bill …
With Bitcoin, I don’t expect much excitement over the summer.
I think the price could get a bit volatile at times – the way Bitcoin does, but no major moves until the fall. Around September-October I think we’ll see the early stages of the next parabolic move. The price should begin a steady rise from then through the end of the year, reaching about $90,000 by December 31, although we could see $100,000.
The real fun will begin next year – in 2025 – when Bitcoin will go parabolic.
As you know from that special report we did, I’ve already predicted a minimum peak of about $140,000 and a maximum of $250,000 to $275,000. That put the mid-point at about $200,000.
I’m sticking with those numbers for now.
WPIII (Q): A forward look at Apple?
DZ (A): Yeah, Bill … you and I were both amused by the “180” we saw from many Wall Street analysts in the wake of the AI event. We expected it. I said it. You wrote it.
Their story went from “Apple is hopelessly behind in AI” to “Apple is the likely winner of AI” to “Apple has leapfrogged everyone else.”
Wall Street seems to enjoy giving itself whiplash with Apple. It loves it. It hates it. Just keeps whipsawing back and forth. Since we’re back in a “love” phase now, I think that will be reflected in a rising stock price as the year goes on. As you and I talk here, Bill, the shares are up something like 6% in the few weeks since the event.
WPIII (Q): Bigger picture?
DZ (A): Yeah, in the bigger picture, it looks like tech will continue to dominate the markets, with Apple and the other so-called Magnificent Seven leading the way.
Logic says this can’t go on forever, but it looks like it will for the foreseeable future.
The biggest wildcard without question is the Presidential Election in November, and I say this from an investing perspective – not a political perspective.
I saw one headline dub this as “The Rematch Many Americans Don’t Want.”
There are a lot of “surprises” that could unfold between now and November that create the kind of political turmoil that markets hate.
WPIII (Q): Let’s make you “Desert Island Dave” – a contestant in our “Desert Island Stocks” series …
Just to “set the table.” We’re “Wealth Builders” here at SPC.
In other words … we play the long game.
Our game embraces that same spirit.
So you know you’re gonna be banished to a desert island – and be incommunicado – for, say, two, three, five, eight, 10 years. And you want to park some money in one investment – knowing you can’t hedge it, trade it, sell it or adjust your stake for that entire stretch … what would this “desert-island pick” be?
And why?
DZ (A): Well, given my crypto call that I outlined anew here today, my only possible answer is Bitcoin.
Did you know, Bill, that Bitcoin has been the top-performing asset in eight of the last 11 years?
And usually by a huge margin.
Bitcoin’s return in 2023 was more than 150% - far above that of stocks.
In fact, I think the S&P 500 had a gain of about 25% last year.
Think about it this way: Everyone said 2023 was a great year for stocks – and it was.
But Bitcoin beat stocks six to one.
Plus, as I said earlier, I expect Bitcoin to experience another parabolic rise in 2025.
Now it’s true that Bitcoin has had down years – but never two in a row.
WPIII (Q): So if you’re “Desert Island Dave” …
DZ (A): Right, Bill … if I’m “Desert Island Dave” — marooned by the S.S. Minnow on that desert island for five years — the odds are very high (in my favor!) that my Bitcoin investment will far outperform any other asset in which I could put my money.
Even shares of Nvidia Corp. NVDA 0.00%↑.
WPIII (Q): That, my friend, is what I call a “good investment case.”
Good stuff, Dave. As always … thank you.
DZ (A): Always a pleasure, Bill. That’s what Old Pals do …
WPIII (Q): See you all next time …
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