February 2022 Book Review - Manias, Panics and Crashes

This month I'm going to post a more financial focused fanpost. In Kindlebergers book - Manias, Panics and Crashes you will learn a lot about exacerbated human behaviour that is causing financial bubbles.

Bubbles always will exist and bubbles tend to be cyclical in time and regions. The US stock market has been in a prolonged bubble territory for some years now, thanks to the easing financial policy of the fed. Lately there are more volatile up and down swings to see.

Stock tip of the year

I don't like much risk and I don't like to share bad advice, so I'll go with the safest possible stock one can hold for a year and don't worry much about the market. In that case Activision blizzard (stock symbol ATVI) is the chosen one. This company has been brought out by Microsoft recently, but the deal needs approval and will go through next year if all is good.

The buyout price is $95 and the stock is trading at $81.5 right now, which implies a 16.5% upside, plus a 0.50% dividend yield. You could say this to be more of a bond reactionary atm than a stock and the 17% upside beats inflation and would weather a market downturn.

Of course the deal could not go through and Microsoft would need to pay 3bil in cash to Activision in that case. Later in the year the company is expecting to release two highly anticipated games and by the next year around July the stock would have a fair value of $82.

I would say this is the lowest risk "investment" available.

According to the book and for more risk reward odds investing in China could be pretty profitable over the course of 5 years. Disclaimer, I own ATVI, BABA and BIDU and I'm not a certificated financial advisor. Please do your own due diligence.

How does this relate to the NBA?

There are many teams that live in a bubble of anticipation fueled by star player names, only to disappoint the masses to a great extent after a few months. The Nets, Lakers and Sixers are poster childs of this trend. Other teams like the Bucks and Suns are more team oriented, almost boring for the casual reporter and fan.

Also, the Bucks as a team are on the upswing right now and at some point there will be a period again were we will see bad basketball from this team. No, I didn't got inspired by the Portland game to write this.

No, really.

Ok, maybe a bit.

When that moment comes, I hope we embrace it and can fondly look back at how great of a team we had and were able to watch almost daily.

This TEAM is special.

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