San Diego Union-Tribune (Sunday)
IS BITCOIN USELESS?
Elon Musk admitted on “Saturday Night Live” that it was a “hustle.” Those who have profited have done so as a speculative investment, not its intrinsic currency value. Its anonymity, while lauded by its devotees, is particularly troubling as the “go-to” platform for criminals and hackers. Many see a currency system not backed by a nation as a good thing. I am still trying to figure out why that even matters. It feels like cryptocurrency exists for solving a problem that doesn’t really exist. Maybe I’m a Luddite.
London Moeder Advisors
Bitcoin is not useless — its value is determined by demand. However, it doesn’t actually exist. Technically it can be traded for goods and services like traditional currency, but that’s not really what it is being used for. Currently, it is used for speculative online investments and to evade certain laws. As long as people are willing to trade dollars for crypto, bitcoin will continue to exist.
SANDAG
International cryptocurrency transfers can lower transaction costs over traditional wiring costs. Drug dealers also find utility in the anonymous nature of transfers. However, as an everyday permanent currency, it fails because volatility makes holding it too risky. It also fails as a store of wealth because we don’t know how to value it. So-called supply limits do not matter, as it is too easy to start new cryptocurrencies, like Dogecoin, and last, it is an unsustainable energy hog that geometrically uses more and more power to mine the next coin.
University of San Diego
Bitcoin is likely to have a use, but a limited one as “digital gold.” Some investors may hold it to protect themselves from inflation or if they fear that major currencies, such as the U.S. dollar, might collapse. Many investors may shun it because of its volatility, environmental strain on energy resources, and its use in the underground economy. It will not serve in everyday transactions. Central banks, as China has done, will pre-empt that role.
Point Loma Nazarene University
YES NO NO NO
It is universally either misunderstood or completely confusing and ignored by everyone else. The irony of how bad it is for the environment due to immense use of electricity, mostly in countries that use fossil fuels to produce the electricity, and how cybercurrency is used for illegal activities and money laundering is not lost on the public. As it is banned by more and more countries, companies and individuals, I think we will see it fade away, just as the fad that it is.
Manpower
Even though bitcoin currently has value and isn’t worthless per se, it is useless, highly volatile and speculative. An example was given recently that “if a bitcoin buys one Tesla today, but only half of one tomorrow, then it’s useless as a means of payment and store of value.” The instability and unreliable nature of bitcoin (and its general lack of adoption outside of a cryptocurrency exchange) will prevent it from being able to correlate like the dollar does with gold. Useless or not, cryptocurrency remains a disruptive technology with a cult following.
Intellisolutions
Cryptocurrencies represent a paradigm shift toward a (partially inevitable) future of decentralized finance. Bitcoin was the first and still the most used today. Despite all the bad press (use for illegal activity, empty prospecting, environmental impact) crypto is having positive impacts (programmatic contracts, alternatives to volatile governments) and evolving as it is adopted. Moreover, crypto is simply one use-case of the powerful technology blockchain which will change many industries. Cabs dismissed, then fought, Uber the same way banks dismiss crypto.
Weave Growth
The value of cryptocurrency or bitcoin will come from the strength of the issuer. A government could determine to use it as alt-currency and cryptocurrency provides opportunities for illegal transactions of which there are many, even between countries. Hence, while technically we could describe cryptocurrency as useless, the truth is it might have significant value to many who are trying to avoid taxes or law enforcement.
R.A. Rauch & Associates
YES YES NO NO Testing, testing: Is this stock on?
Quidel (Nasdaq: QDEL) is a small but growing
San Diego company focused on health diagnostics and testing, including testing for COVID-19. The company had an outstanding 2020, with revenue more than tripling year over year due to huge demand for its COVID-19 offerings. Revenue for the first quarter of 2021 more than doubled over year-ago levels, too.
That’s all exciting, but the stock was recently down more than 60 percent from its 52-week high, as investors see vaccinations taking hold and expect a slowdown in testing for COVID-19. Testing isn’t likely to go away anytime soon, though, as much of the world is still not vaccinated and variants of the virus keep materializing.
Meanwhile, Quidel has reached a distribution deal with Mckesson to distribute its at-home COVID-19 tests, which will open up more opportunities in the near future. More deals like this will drive revenue growth.
Quidel isn’t a stock to just buy and forget about: Much depends on how long people will continue to need testing for COVID-19, as well as on how the company’s business will adapt once the pandemic is really over. But at the very least — recently trading near 52-week lows and with a market value recently below $5 billion — Quidel looks to be a promising buy in 2021, with much room for growth. (The Motley Fool owns shares of and has recommended Quidel.)
How to pick a brokerage
If you’re thinking of investing in the stock market, you’re probably going to need a brokerage account. There are lots of good brokerages to choose from, but doing a little research first can help you zero in on the ones that will serve you best. Here are some considerations:
Minimum initial deposit: With some brokerages, you might need $2,500 to open an account, while other brokerages require $500 or even $0. (Some have no minimum for IRA accounts.)
Costs: Check out what your candidate brokerages charge to trade stocks, mutual funds, ETFS and more, and for any other services you might use, such as money transfers. Many brokerages these days charge nothing for most trades.
Research: Many good brokerages offer free in-depth research reports on a wide variety of investments from sources such as Argus, Credit Suisse, Morningstar, Ned Davis, S&P, The Street, Thomson Reuters, Zacks and more.
Mutual funds: If you plan to invest in mutual funds, you can usually do so via the website of each fund, but it can be much more convenient to do so through your brokerage. So consider how many funds, and which families of funds — such as Vanguard, Fidelity or Schwab — are available through any brokerage you’re considering.
Banking: Some brokerages these days offer banking services, such as checking accounts and mobile bill paying. If that’s of interest to you, see which brokerages offer it.
Convenience: Some brokerages exist online only, so if you would like to do business at a physical location, stick with those that have a local branch near you. Some of these factors will be more important to you than others. For example, pay less attention to trading commissions if you trade very infrequently.
You can read reviews of good brokerages and compare them at our sister company, The Ascent, at Theascent.com. Or use an online search engine, searching for terms such as “compare brokerages” or “best brokerages.”
Overvalued stocks
Q:
Does it really matter if I buy an overvalued stock, as long as it eventually grows in value? I’m buying for the long term, after all. — F.H., Ardmore, Ind.
A:
Ideally, we should buy stocks that seem undervalued, as they offer a margin of safety. Buying overvalued stocks can be risky, as they might drop closer to their intrinsic value at any time, especially over the short term. Yes, over the long term, the intrinsic value of healthy and growing companies will grow. But it’s still possible to simply pay too much for a stock.
Consider, for example, networking titan Cisco Systems, which was a market darling before the internet bubble burst. Cisco’s stock was trading between $55 and $59 per share (on a split-adjusted basis) back in 2000 — but recently it was trading at around $52 per share. Those who bought the stock near its peak back then are still underwater — 21 years later!
Companies and their stocks don’t always perform as you hope or expect, so it’s best to reduce your risk by focusing on healthy and growing companies, ideally with little to no debt, that are trading for much less than they’re likely to be worth in the future.
Q:
How can I access the earnings reports that companies file with the Securities and Exchange Commission (SEC)? — J.N., Strasburg, Va.
A:
Try starting at a company’s own website, where it’s likely to have an “Investors” area, with links to earnings reports and other resources. Or call the company’s Investor Relations department and ask if they can mail you the latest filings. You can also look up companies’ quarterly 10-Q and annual 10-K reports at Sec.gov/ edgar.shtml.
Hot stock tips can burn
FOOL’S SCHOOL
ASK THE FOOL
MY DUMBEST INVESTMENT
My dumbest investments have been stocks I bought after listening to tips from well-meaning friends. Needless to say, they didn’t turn out well. — I.G., online
The Fool responds: It’s easy to be tempted to act on hot stock tips from friends or relatives — or even from strangers. It’s best to exercise restraint, though. For one thing, any particular recommended stock might end up heading south instead of north, taking a chunk of your money with it.
Keep in mind, too, that you don’t necessarily know where the tip came from: It might be from your friend’s friend who’s a savvy investor — or from their dentist, a mediocre investor who read some hype about the company online. It would be helpful to know just how good a track record the person recommending an investment has, but that’s probably a mystery. Even with financial talking heads on TV who are presented as investing experts, we generally don’t know how good or bad they are at stock-picking.
In general, one of your best moves upon receiving a hot stock tip is to ignore it. The other is to do your own research into the company: See if it’s healthy and growing, if it has sustainable competitive advantages and if it’s priced below what it’s really worth. If you buy it after researching it, you’ll be making an informed decision rather than just taking your chances.
Name that company
I trace my roots back to 1902, when there were only 23,000 cars on the road in the U.S. — one car for every 739 horses! Nine motoring clubs joined forces to create me. Over the years I’ve advocated for better roads and bridges, driver education and motorists’ legal rights, among other things. I was the first to offer roadside assistance for motorists, in 1915. (I respond to almost 30 million calls for help each year.) Today, based near Orlando, Fla., I boast more than 62 million members and more than 1,000 branch offices. I’m a travel agency, too. Who am I?
Last week’s trivia answer: Iron Mountain
FOOLISH TRIVIA