Making money: what the experts think
Playing the Vix
Last week’s “nuclear” stock sell-off cost a lot of people money, “but at least one person walked away smiling”, said Joe Ciolli at Business Insider. That would be “50 Cent” – the nickname of one particular “volatility vigilante” renowned for betting big “on a stock market shock”. He “raked in a whopping $21m in mark-to-market gain” when Wall Street’s Vix Index of volatility (known as the “fear gauge”) jumped 44% to its highest level since May. Who exactly is this rakish investor? Back in May, the Financial Times, citing sources in banks familiar with the trades, unmasked “50 Cent” as none other than Ruffer LLP – the $20bn London-based fund, renowned for its conservative investment approach, whose client roster includes the Church of England. Despite last week’s coup, “50 Cent” isn’t “exactly rolling in the dough”. Thanks to the “prolonged period of calm” ahead of last week’s fireworks, losses over the year to date total a painful $150m.
Bitcoin bubbling
At the end of June, when the price of a bitcoin hit $2,500, I urged caution on grounds that the price of the cryptocurrency might be “getting ahead of itself”, said Dominic Frisby on Moneyweek.com. How sage that seemed when, within just three weeks, the price fell 30% to $1,800. “What has happened since has blown the eyeballs out of everyone.” Having turned and rallied by some 150%, bitcoin’s price is currently hovering around the $4,250 mark; “it’ll probably be $5,000 by the time you read this”.
Cash floodgates
Some even deem that price conservative, said Evelyn Cheng on CNBC.COM. According to Ronnie Moas of Standpoint Research, “the floodgates are opening… hedge funds and very deep-pocketed individuals” are piling in. Moas’ new short-term price target is $7,500, but he reckons it may surge to $50,000 by 2027 as institutional investors and central banks embrace bitcoin. Even so, there’s no doubt we’re currently in a huge “speculative bubble”, said Frisby. Eventually, it will collapse spectacularly “and the world will wonder how it can possibly have been so stupid”. But, in the meantime, “an entire new technological infrastructure will have been built”. That’s the thing about bubbles: they tend “to change the world”.