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Economy , Finance , Investing

Bitcoin or Tires. Comparing Risk.

December 12, 2017


If I had a Bitcoin for every email I’ve received asking me about Bitcoin… well… let’s just say you probably wouldn’t be hearing from me right now.

I’d be on some deserted island surfing my brains out, getting sunburned, and drinking a cold beer.

Actually, that’s not true. I’d probably still write the Explorer Report. I enjoy sharing ideas and adventures!

But seriously… I have received a RIDICULOUS amount of messages about Bitcoin.

I don’t even respond any more (so if you emailed me about Bitcoin and didn’t hear back… sorry… I just deleted the email).

Look, I am not a Bitcoin or crypto currency hater. In fact, I am a huge fan. (Even though I lost a bunch around 2013… that’s a whole ‘nother story that I don’t like to talk about! But I am weary to the risks that many people don’t understand… which is that if you are not incredibly careful with your crypto currency holdings, you can lose it in a second.)

But, here’s the thing… Whenever I hear people getting super excited about something, I usually turn the other direction.

I’m a contrarian at heart.

I avoid the places that people flock to and I am drawn to the places that people avoid or don’t know about.

Why do you think this is called the “Explorer Report?”

I want to explore uncrowded opportunities. Travel to exotic locations. Meet interesting people. And, of course, make incredible investments along the way.

So… back to Bitcoin…

Have people made A LOT of money? Yes.

Could there be A LOT more money to be made? Sure.

But, I also know that hundreds of thousands of new investors are flocking to Bitcoin every day.

Coinbase – the leading Bitcoin exchange – is adding over 100,000 new clients per day.

Imagine if your business was adding that many customers per day! In one year, you’d have just as many clients as the entire population of Canada!

So, just from a popularity stand point, I feel turned off by Bitcoin.

Could this just be me being stubborn? Perhaps.

But, if you look at any other trend that explodes in popularity, there is ALWAYS a peak that is met with a violent crash.

However, the key question here, is where are we on the timeline of an impending crash? Perhaps we are in the first year of a 1,000 year trend.

Who knows…

But, I do know that based off of historical examples of people acting irrationally, the end result is often met with a majority of people holding the bag.

Or, in other words, it’s the early buyers who sell before the top who make the most money. The people who buy after the price explosion are often the ones who end up losing money.

Again, there is no way of knowing where we are in Bitcoin’s price appreciation. We could be at the very beginning.

I see tremendous upside potential with Bitcoin, but more importantly, I also see a ton of downside risk.

I don’t like those odds.

I want tremendous upside potential with limited downside risk.

One thing that should be clear to you is that there is risk with investing in Bitcoin.

Another thing that should be clear is that blockchain technology (which is what Bitcoin is built upon) is here to stay. Start learning about it now. A great video that explains how a blockchain works is here.

Ok, that’s enough about Bitcoin and blockchain, for now.

The whole reason I started to write this article was to show you an investment that has great upside potential with minimal downside risk.


Yes. Rubber.

Can’t get much more boring than that, right?

Well, here are three rubber companies that have cash in the bank and have been around for over 100 years:

Bridgestone Corporation ($BRDCY), The Goodyear Tire & Rubber Company ($GT), and Compagnie Générale des Établissements Michelin ($MGDDY).

Goodyear has a P/E of 8!

I’m not sure what’s going to happen with this whole Bitcoin craze. But, history tells me to be careful.

In the meantime, I’ll explore for opportunities… and report them back to you.