February 2024, Chicken Little Portfolio Performance

 Crypto to the moon?

Tech stocks go up every day. As great as the returns to stocks have been, however, bitcoin and other cryptos are the best performing assets over almost any time period. Year to date, 1-year, 5-year, 10-year. Is crypto a safety asset or a risk asset?

Crypto challenges all-time highs

February 2024 performance
The Dow Jones Industrial Average rose 2.41% in February 2024. The Chicken Little Portfolio gained 0.70% from its short-term treasuries, and being long a bit of ethereum. 

Feb '24YTD
Chicken Little0.70%1.67%
Dow Jones Industrials2.41%3.69%

February 2024 was a crypto month - Bitcoin up 45% in the month and bringing the all-time high of $69,000 in sight. All other broad asset classes having unremarkable years so far. Stocks in the developed world up a bit, emerging market stocks flat, long-term treasuries giving back some of the gains from the end of 2023: yawn. Except for crypto, which has exploded. 

AssetSymbolFeb '24YTD
Dow Jones IndustrialsDIA2.41%3.69%
Non-US StocksEFA2.99%2.52%
Emerging Market StocksEEM4.17%-0.55%
US Long-Term BondsTLT-2.24%-4.44%

Chicken Little and Crypto
Chicken Little is a fan of crypto. I have friends who are in the finance establishment, teaching at the Harvard Business School and MIT. They view crypto as worthless. What is the 'use case' for crypto they ask? 

One use for crypto is a store of value. If you live in Russia, Lebanon, China, Namibia, Nigeria, Venezuela, Zimbabwe, and probably the US, you should be very worried that the government will completely debase your currency. 

The crypto community makes this point with the meme, "All fiat currencies go to zero." 

If you are worried about your government debasing your paper money, you want to move at least some of your money to real assets: stocks, real estate, commodities, precious metals, and crypto. 

Perhaps the best feature of crypto for wealth preservation is the fact that it can be hidden. For example, early in the Russian-Ukranian war, many Ukranian civilians left Russian-controlled territory. These refugees were systematically robbed along the way. People who carried cash or gold lost everything. If, however, the money was stored in crypto, and if the person survived, they kept 100% of their money.

The same story applies to South Americans trying to get to US and facing predation by human coyotes. Survive the desert and the walk and have your assets available.  Most of the world has currencies that are at imminent risk of significant decline. 

Other countries, like the US and Europe, have seen a slow and steady debasement over decades. Gold is now just under $2,000/ounce, up from $35/ounce in 1971. Measured against gold, the dollar has lost 98% of its value in the last half-century. 

So crypto is a government-free, zero physical weight, no-need-to-put-in-a-safe asset. Everyone should own some, I believe. 

Chicken Little has been a modest investor in crypto for years. See: 

Why does Chicken Little, a crypto fan, only have 2% of the portfolio invested in crypto? The answer is that I believe that the Central Bank, global-speculative-mania (GSM) includes even safety assets. By e-printed tens of trillions, the prices of all assets has been inflated, even the safety assets. 

So while I believe in the long-term benefits of crypto, I have not been able to hold large crypto positions over time. 

March 2024 portfolio position
The Chicken Little portfolio remains positioned for collapse. One trade in February 2024 - increased the modest short position in equities. Crypto position has gotten larger because the price has gone up - no increase in the amount of ether that I own. 

Chicken LittleDow Jones Industrials
2024 (through February)1.67%3.69%
2015 (April through Dec)-2.49%-0.27%
since inception (3/31/15)22.46%161.75%

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