Kevin OLearys crypto investment plan for the blockchain, bitcoin and NFTs in 2022

#Crypto #Tech #Bitcoin

Joining us now mr wonderful himself chairman of oh shares investment advisors and shark tank investor kevin o’leary happy new year kevin great to have you on the show thank you very much i want to start with this sell-off we’re seeing in stocks actually last last week really rough start to 2022 and we’re seeing the big tech get beaten up really the most with the

Nasdaq now formally in a correction are you using this as a buying opportunity and if so what are you loading up on right now i am actually i mean first of all let’s talk about the volatility in tech um tech stocks are historically volatile they trade at high pes many of them trade based on growth metrics not necessarily earnings and that gives them very very

High multiples and so generally speaking they have volatility but the way i look at it in corrections like this is has has anything fundamentally changed in their business models i mean are you going to use zoom less there’s a speculative name are you going to use google less or is it going to continue to grow is microsoft still going to be an enterprise platform

The answer is yes to all these questions and so when you get volatility generally speaking in my world i take advantage of it because i have to deploy capital all the time and i have to decide where am i going to put it i like growth and i understand it’s going to be volatile and days like this i remind myself i’ve seen this movie before go back 17 years on amazon

Which i’ve owned for almost that entire stretch we had 30 40 50 corrections each year and yet look where you end up today and so i look at it and say to myself let’s learn from the past apply that to the future take advantage of volatility the economy is strong the use case for technology it gets more important enterprise every day in every part of the globe that’s

The investment thesis so kevin we know the new year brings a lot of headwinds but there are also lots of opportunities so what is the biggest opportunity for investors as you see it in the new year well the one that i really found interesting uh over the last 24 months has been um crypto and and blockchain technologies and tokens and nfts you have to make a binary

Decision about this stuff and this is very difficult for many institutions i talk to them every day because i’m in the indexing business and many of them have not even started their journey into cryptocurrencies but the reason you should think about it is this this is this is how i wrap my head around it and i think it helps investors to think this way if you invest

In microsoft and google and amazon and so many of these other platforms what is the core you’re investing in it’s basically software google software well bitcoin is not a coin it’s actually software the blockchain is software ethereum is software hbar is software polygon is software so the real decision is if you’re willing to invest in software because it’s a

Productivity tool as an equity such as google why wouldn’t you invest in software such as ethereum because it provides a service particularly in payment systems that is being used globally and that’s sort of my investment thesis and then the question is which coins which tokens which blockchains and for that i apply the same rules of diversification i apply to my

Stocks and bonds no more than five percent any one position no more than 20 percent in the whole sector so i’m not anywhere near 20 in crypto i’ve just gone over 10.7 in in the in our operating company but i have a plethora of positions and i’m going to make this decision there that this is even more volatile than technology equities and it certainly is bitcoin’s

Having one of its worst starts ever but you have to get used to it just like you had to get used to amazon where it would have these 30 to 50 corrections same thing with bitcoin so are you using crypto sort of as a way to hedge or diversify from other assets like uh like real estate for instance are you using a sort of instead of the way we would traditionally use

Gold as a hedge that’s an excellent question and the answer is yes and there’s a direct tie in real estate here was my dilemma last year i sold a lot of our commercial real estate in our portfolio it turned into cash called my cash desk said what are we getting for this cash because i haven’t got any ideas to deploy it yet i need some time because i like to put

Cash back in the market slowly take advantage of corrective days like this et cetera and they said we can get 20 basis points 20 basis points and i said wait a second inflation’s over six percent that means i’m being taxed at 5.8 on holding cash and that was when i started my exploration into crypto and it took me to two platforms that i use today ftx for where

I hold a lot of my decentralized and i have to disclose i’m a paid spokesperson and an investor in ftx and use their platform and circle where i use usdc where i stake stable coins and get somewhere between four and six percent interest that was my first exposure and let me tell you something you know it took me six months to get my own compliance department and

My own external auditor to agree to sign my statements that’s how difficult this is going to be but as the adult and that is in fact the the tremendous potential of crypto if we make it regulated if we get institutions into it and find a way for them to be compliant there’s trillions of dollars going to come into this space because it has a pragmatic use now i’m

At least keeping pace with inflation on my circle stake and i’ve got a wide range of holdings in my ftx account and it’s completely compliant with my external auditors and my internal compliance department it took a long time to set up other institutions are going through the same birthing panes yeah we’ll see if 2022 brings some clearer regulation in that space

Kevin but i’m curious if you’ve bought any of those non-fungible tokens those nfts how much of the portfolio is dedicated to those no i i i don’t have a lot of nfts yet but i will tell you i actually believe that the potential for the nft market is actually larger than bitcoin and i’ll tell you why the idea and let’s take a physical asset the one i like to use

As an example is watches i’m a huge watch collector i have a massive collection of watches one of the biggest challenges i have is inventory management insurance management and then of course authentication when people offer me vintage watches i have to go through a very arduous authentication process to know if it’s fake or not there’s so many fake watches in the

Market nfts could solve all of those problems so in the in the case a use case for the multi-billion dollar watch industry because the actual trading of second hand watches is 10 times the size of the original watch market each year because there’s billions of dollars worth of you know very desirable watches that trade all around the world if i could turn all of

My watches into nfts and in that way i could let my insurance company know look these are the 10 they’re out of the vault this week bid me on insurance just for these 10. here’s where they’re located here’s why i want them insured and all the rest i’d self-insure because they’re in a bank vault in some city somewhere authentication every time i sell that watch the

Scan of its style which is down at the micron level attached to the nft would authenticate it you can rescan it and prove that was the original watch so for that kind of thing same with real estate same with fine jewelry same with pins same with cars all of this is going to move onto the chain and so the best way to invest in it from my point of view is make take

Positions like i invested in immunible.com they own nft.com they’re building a curation platform for nfts everywhere and so that’s an equity that i own i own wonderfuy.com which is just bought the largest exchange in canada they own they have 375 000 accounts in a jurisdiction that really is progressive in crypto the the swiss the canadians the uae government

Some of these some of these places are now becoming a little bit more progressive and you have to invest in those geographies if you want exposure so there’s a lot going on but it it certainly takes a fair you know point a lot of time in my day just tracking all this stuff i’d say i spent 40 percent of my investment day tracking cryptocurrencies now um you know

We actually had the ceo of wonder five ben samara on recently to talk about that deal so all right we we understand it we get it you’re liking the nfts you’re you’re liking the crypto what else do you like talk to us about other sectors where you really see opportunity this year well you know i’ve always had a five percent weighting in gold people don’t talk about

Gold any much very much anymore because cryptos become the gold du jour the digital gold so to speak but it’s still actually i think an asset you want to have in a rising rate environment and i think diversification now towards stronger balance sheets is going to be very important i i think if you you think about a portfolio you’re managing an equity portfolio

For growth you’re going to have vol there’s no question so if you’re going to put 20 into technology you’re going to see price swings like we’re having today but if you want stability go through the s p 500 and find the balance sheets of the strongest that actually are growing free cash flows distributing portions of those profits through dividends so my theory for

2022 is this we’re not going to get another 20 plus percent return in the equity markets it’s going to be more muted more like eight or nine percent earnings growth i think will be around eight percent on the s p 500 plus add another 100 basis points for dividend distributions you’re going to make eight or nine percent this year you’re going to go through a lot of

Volatility but that’s still way better than what how you’re being treated in the fixed income market plus think about the risk you’ve got if you buy long duration bonds right now you’re going to get killed if rates continue to go up and then the yields right now on aaa or triple b and above um corporate credits are not that attractive they’re still sort of three

Three and a half percent which doesn’t even beat inflation so i think right now it’s it’s focusing on higher quality names for example i don’t own the airlines take united for example i always use this use case they started the pandemic with seven billion in debt now they’re way over 20. why would you want to own that balance sheet why there’s no reason to do that

There’s so many other companies that don’t have that upside down balance sheet situation today and those are the ones you have to look at you’ve got to groom through the s p and pick your positions and then for growth you stick with technology well i i would take eight or nine percent in a volatile year for sure listen kevin before we let you go new year new you

You look great i understand you lost something like 20 pounds in the 15 seconds i have left how’d you do it i went into intermittent fasting my doctor i had my annual checkup last year and he said look you’ve got to lose 20 pounds your blood pressure’s way up it’s been going up every year because you’ve been gaining weight that happens to a lot of people over time

You become more sanitary and put on pounds i said have you ever tried um fasting that i’ve never had so i fast 16 hours a day it was hell for the first three weeks and now i’m never hungry it’s remarkable it’s a remarkable thing your body can do if you get used to it so basically i don’t eat breakfast i have my meal you know seven or eight at night maybe a little

Later and then i don’t eat til one in the afternoon the next day try it it really works and you’re never hungry just some advice from one guy i love it you are disciplined not only in your investments but now with your food you’re an inspiration kevin o’leary thanks so much be well

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Kevin O'Leary's crypto investment plan for the blockchain, bitcoin and NFTs in 2022 By Yahoo Finance