Bitcoin and gold are considered interesting investment alternatives in view of the current monetary policy of the central banks. The hedge fund SkyBridge Capital is therefore expecting a rally in both assets. But although he predicts new record highs for gold, the Co-CIO of SkyBridge believes Bitcoin is the better investment.

• SkyBridge Capital: Gold is good, but Bitcoin is better
• Co-CIO sees gold bottoming , but Bitcoin still in the bull market
• Better prospects thanks to correction

In view of the persistently loose monetary policy and rising US inflation, both Bitcoin and gold are currently attracting increasing attention from investors as a possible investment alternative to protect against a devaluation of the US dollar – and apparently rightly so. Troy Gayeski, Co-CIO and Senior Portfolio Manager at the hedge fund SkyBridge Capital, believes a rally in both values ​​is likely, as he revealed in an interview with “Bloomberg”. Even if the Fed restricts asset purchases, i.e. counteracts rising inflation, he believes that bitcoin and gold prices should rise. However, he still sees better opportunities for one of the assets.

Expert recommends Bitcoin – despite the forecast record high for gold

According to Gayeski, the Fed is likely to announce the imminent end of the ultra-loose monetary policy this year, but will not actually begin tapering until 2022. This should mean that Bitcoin and gold remain attractive for the time being in view of the feared devaluation of the dollar and rising national debt. SkyBridge’s Co-CIO expects gold to hit new all-time highs in the coming year. As an investment, however, he still considers digital currency to be the better alternative. “We will stick with Bitcoin and crypto, simply because we think there is more upside potential there,” Gayeski told Bloomberg. Rising inflation rates would have a greater effect on Bitcoin than on the yellow precious metal, so that you can “get a little more juice there”

SkyBridge still sees Bitcoin in the bull market

Another reason why the senior portfolio manager relies on Bitcoin rather than gold is likely to be found in the price development of the two assets. Because since the beginning of the year, both systems have developed almost in opposite directions. Bitcoin initially rose significantly at the beginning of the year and marked a new all-time high of over 64,000 US dollars in April. This was followed, however, by a severe correction, from which the cyber currency has not yet recovered. While the digital currency was still booming in the first few months of the year, the gold price fell and, according to “Bloomberg”, almost slipped into a bear market. Then the price of the precious metal recovered and has since made up its losses. “From now on, the probability is very high
Bitcoin has not yet been able to initiate a comparable upward trend after its slump – and possibly that is precisely why it currently offers greater potential. Because according to Gayeski, Bitcoin is still in a bull market despite the sharp correction. The phase of institutional adoption of bitcoin has only just begun and the last halving event – which is apparently expected to have a long-term, positive influence – was not that long ago, said the SkyBridge expert in the “Bloomberg” interview. In addition, the trend line is still intact and the cryptocurrency has formed a stability zone at $ 33,000 to $ 36,000. It is difficult for Bitcoin to sustainably rise above 40,000 US dollars to 45,000 US dollars in the short term,
“All of the alternatives to fiat currencies – all of which have gone through significant corrections quite recently – are now in a much better position to deal with the eventual tapering and gradual slowdown in monetary growth than they were when they did Have reached peak after the other, “said Gayeski also on the prospects of alternative assets for the imminent period in which the loose monetary policy of the central banks is slowly being scaled back.

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SkyBridge with a high price target for Bitcoin

The market repeatedly cites the approval of a Bitcoin ETF by the SEC as a possible boost to the Bitcoin price. The US Securities and Exchange Commission has received several corresponding applications, but none has yet been approved. According to Gayeski, that should change soon. According to “Bloomberg” SkyBridge Capital is also planning a Bitcoin ETF in cooperation with First Trust Advisors and Gayeski expects approval for the fourth quarter of 2021 or the first quarter of 2022. With the SkyBridge Bitcoin Fund, the hedge fund has already had an investment vehicle on offer since last December which, according to “Fundview”, “should give semi-institutional and institutional investors access to Bitcoin investments”. According to “Bloomberg”, this fund was able to
But if you believe SkyBridge founder Anthony Scaramucci, there is much more to it. Because he predicted according to “Bitcoin.com” that the digital currency will be at 100,000 US dollars before the end of the year. The reason he gave was simply the high demand with a limited supply. With this mega price target, it is no wonder that Troy Gayeski also prefers Bitcoin to gold.

Gold is generally considered a safe haven by investors, so that an investment in the yellow precious metal often serves to secure purchasing power in turbulent times. Investors who bring gold into their portfolio to protect against inflation, however, may get involved in a game of chance. Because the track record of the popular commodity is not flawless, as an analysis by Morningstar shows.

• Hardly any correlation between the development of the gold price and inflation
• Gold in the past with negative performance in times of high inflation
• Experts recommend other asset classes to protect against inflation

Rising US consumer prices are currently ensuring that inflation concerns are a key issue among investors in the stock market. Experts are also concerned. Deutsche Bank recently warned that inflation risks could develop into a global time bomb . If the fear of a devaluation increases in the market, the big hour for gold usually strikes . The precious metal is often used to hedge the deposit against inflation because its natural occurrence is limited, it is needed in industry and it cannot be devalued by monetary policy measures. Experts therefore believe that the price of gold will reach a new all-time high this year could. But the reputation of the yellow precious metal as a protection against inflation is possibly unfounded. Because, as an analysis of historical data shows, the raw material was anything but reliable in the past.

Expert: “Gold is not a perfect hedge”

In order for an investment to be seen as protection against inflation, its value should, according to “CNBC”, rise whenever inflation increases in the form of consumer prices. That’s not the case with gold, however, according to an analysis by Morningstar’s portfolio strategist Amy Arnottshows, which is available to the US medium. According to Arnott, the price of gold and inflation had a correlation of only 0.16 over the past 50 years. As a reminder: the closer the value for the correlation is to 1, the more likely two systems will develop in lockstep. However, a correlation of only 0.16 means that there is almost no relationship between the two values. “There is no guarantee that gold will also generate above-average returns if inflation rises,” said Amy Arnott, according to CNBC, in view of the data. In fact, the situation looks even grimmer. Because a look back at the past shows, according to the Morningstar strategist, that gold is “really not a perfect hedge”.

Inflation vs. gold price: historical performance leaves something to be desired

As part of her analysis, Arnott looked at three periods in the past 50 years when inflation was particularly high in the United States and examined the development of the gold price during these periods. In the years 1973 to 1979, for example, the average annual inflation rate was 8.8 percent, well above the target of two percent that the US Federal Reserve is currently targeting for the inflation rate. During this period, however, gold still lived up to its reputation as a safe haven, as an investment in the precious metal delivered returns of 35 percent according to the portfolio strategist. But a short time later the picture changed. As “CNBC” reports with reference to the study by Amy Arnott, gold investors lost an average of ten percent in the years 1980 to 1984, although the annual inflation rate of 6.5 percent was also very high in these years. Something similar could be observed from 1988 to 1991: While the inflation rate averaged 4.6 percent, gold lost around 7.6 percent of its value during this period.

According to “CNBC” these results suggest that investors who want to use gold as a hedge for their portfolio are making a risky bet. This is also underpinned by an analysis by “Seeking Alpha”. The website looked at the entire period from 1978 to 1995, as this was the period with the highest inflation rates since World War II, and came to the conclusion that the development of the gold price did not keep up with the US Consumer Price Index (CPI) could outperform them, as one would expect from a good inflation protection. Instead, the gold price was very volatile during this period and ultimately only gained around 71 percent, while the CPI rose by around 127 percent. According to “Seeking Alpha” between 1980 and 2000, the precious metal

Experts recommend these asset classes for hedging against inflation

Since gold has not proven to be a good hedge historically, Morningstar’s Amy Arnott recommends that investors worried about rising consumer prices consider other asset classes . Michael McClary, CIO of Valmark Financial Group, also advised CNBC with regard to gold that “not just buying it because you think inflation is coming”. In his opinion, better protection would be offered by a mixed portfolio consisting of stocks, REITs , commodities such as oil , in which one can invest via ETFs, and Treasury Inflation Protected Securities, or TIPS for short. The latter are special bonds that offer inflation protection and low interest payments.

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As reported by “CNBC”, REITs and commodities in particular have a better track record than gold, according to Amy Arnott’s analysis. In the period from 1973 to 1979, REITs gained about 11.5 percent in value, while commodities rose by 19.4 percent. From 1980 to 1984 REITs rose by 20.4 percent and raw materials by 2.3 percent. And in the last period examined, from 1988 to 1991, REITs were up 9 percent, while commodities climbed 21 percent.

The long-term balance of gold is better

There is one consolation for all gold fans, however: the Morningstar analysis only looked at periods of a few years. According to Arnott, the long-term balance of gold as protection against inflation – measured over several decades – is much better and fits more with the reputation of the yellow precious metal as a safe haven: “If you look at very long periods of time, then gold should maintain its value against inflation “said the strategist according to” CNBC “. “But in any shorter period of time, it may or may not be a good hedge.”

Although Apple has moved a bit from its all-time high it hit in January in recent months, Wedbush analyst Dan Ives remains very bullish on the stock, even seeing a $ 3 billion market cap in sight.

• Apple is increasingly focusing on services
• Dan Ives expects market capitalization of 3 trillion US dollars
• Also headwinds for Apple

In the summer of 2018, Apple became the first publicly traded company in the world to achieve a market capitalization of one trillion US dollars. And in 2020 it even broke the two trillion mark. Apple is currently slightly higher at $ 2.16 trillion (as of June 16, 2021), but Dan Ives, an analyst at the US investment company Wedbush, still sees a lot of room for improvement.

Apple relies on the service business

The iCompany has long wanted to make itself less dependent on its flagship product, the iPhone. Among other things, he is making great efforts to expand his service business. This strategy not only secures regular income, which makes the sales development less prone to fluctuations, but Apple also benefits from the fact that the profit margin for digital services is considerably higher than for hardware.

$ 3 trillion market value

Ives has high hopes for this development. He currently values ​​Apple’s service business at around $ 1 trillion, but assumes it will soon be worth $ 1.5 trillion, helping to raise the group’s market capitalization to $ 3 trillion. “We think that it will be ready in twelve to 18 months,” he told the US broadcaster “CNBC” a timeframe for this goal.

“They [Apple] have built an iron fence around their products and are continuously making a profit from it,” said the Apple bull, who only raised the price target for Apple from 175 to 185 US dollars in April and confirmed its outperform rating. Apple shares are currently listed at $ 130.15 (as of June 16, 2021).
Dan Ives is convinced that the company from Cupertino, California is currently laying the foundation for the next stage of growth, in which software and services will play important roles: “If you look at the innovations, if you look at the current super cycle in the service business I think this is the next stage of growth, “said the analyst.

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Risks to Apple

But despite all the optimism, the Wedbush analyst also warned of possible risks that could prevent the 3 trillion market capitalisation from being reached. Because the Apple App Store system is currently facing violent attacks.
On the one hand, the EU Commission accuses the iGroup of unfair competition in the music streaming app business. On the other hand, the “Fortnite” developer Epic Games is suing the court because it operates its own app store on the iPhone and Apple no longer wants to pay taxes. Since Apple has so far collected 30 percent of the income from app developers, or 15 percent for company sales under one million US dollars, this process could change the app business on Apple devices significantly.

While technology giants such as Apple, Microsoft or Amazon are omnipresent in the (financial) media, there are others that are comparatively little reported. And that, although business is also going brilliantly and the corresponding shares have given investors a lot of pleasure over the years.

Strong sales growth

A nice example of this is Adobe (WKN: 871981 / ISIN: US00724F1012). The US group, which is known worldwide for its programs such as the PDF file reader “Adobe Reader”, the media player “Adobe Flash Player”, the photo editing software “Adobe Photoshop” or the typesetting and text Layout program “Adobe InDesign” has been growing rapidly for many years. In the past few years, revenues have increased by an average of 21 percent annually (2019/2020: 12.9 billion US dollars).

In 2013, Adobe switched to a subscription model. This ensured very steady and strong sales growth in the years that followed. Since then, Adobe shares have only known the way up.

Subscription model is the secret of success

In recent company history, the key to success has proven to be the change in strategy from pure software sales to subscription models. The Californian company switched to a subscription model in 2013.

As a result, Adobe was able to record strong sales growth and gradually increase profitability. Today, recurring sales make up over 90 percent of total revenue, which has greatly improved predictability and predictability at Adobe.

Focus on business figures: the analysts are very optimistic

Investors are currently eagerly awaiting the latest figures for the second fiscal quarter 2020/2021 (as of the end of May 2021), which Adobe will announce on June 17 after the US market closes. According to the analysts’ estimates, the group is likely to have continued on its growth path.

For the second fiscal quarter, industry experts expect annual sales to rise by 19 percent to an average of US $ 3.7 billion. Earnings per share should average $ 2.81, down from $ 2.28 per share in the same period last year.

Share profit: plus 34 percent per year

If Adobe can convince once again with its latest business figures, the share listed in the S&P 500 and the Nasdaq 100 should continue to rise. Over a ten-year perspective, the price increased by an average of 34 percent per year.

New record highs were recently set in mid-June at over 460 euros at times (currently: 453 euros). In terms of chart technology, the railway is thus free of upward price resistance, so that the further milestones are set at the next round marks at 500 and 600 euros.

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Subscription model ensures high course stability

Although Adobe belongs to the technology sector, the share is characterized by its high price stability. The very steady growth in revenue generated by the subscription model has ensured for years that price drops in the meantime are comparatively moderate and are quickly made up for. Since the switch to the subscription model in 2013, Adobe’s share price has been rising like a string.

Conclusion

The long-term business and stock market performance shows that Adobe is in no way inferior to the big, even better-known tech giants. Because of the very steady development of the share price, the title is also of interest to conservative investors. The Adobe share is therefore a top recommendation from the US technology sector.

Investors who expect the long-term upward trend in Adobe shares to continue, can leverage a long certificate (WKN: MA5VBD / ISIN: DE000MA5VBD0) to benefit from price increases.