Beneath the famed Madison Square Garden sprawls New York’s Penn Station, from which you can jump on trains going in any direction. A recent journey on Amtrak’s Empire Service carried passengers along the mighty Hudson River, destined for Niagara Falls and all points along the way. As you pass Poughkeepsie, Hudson and Albany, you see how much urban sprawl moved families to a quieter setting outside of bustling Manhattan. Valatie is a village above Hudson and below Albany, and is home to Hydro Dams that were introduced by Dutch Colonists who named the village Valltje, meaning “little falls.” This offshoot of the Hudson River, the main artery of this pulsing energy source, became the setting for a town still thriving 350 years later.
This coveted waterway and route has been part of the growth of America itself, and this corridor from Albany to Manhattan is a ride that tells the story of Hydro Power and what it has meant to anyone who worked, traveled or toured upstate New York. Great industrialists like Cornelius Vanderbilt connected these disparate routes in the early 1800s and created the Empire Builder rail we know today. Cotton mills and other milling operations flourished nearly 200 years ago, and these aging water-powered plants fell victim to the monopolistic power companies forcing them to sell the power back to the grid. Eventually, and perhaps inevitably, given its flawed business model, the Hydro Power Plant businesses became money losers just like the Amtrak which runs along side the Hudson River. They are beautiful, and they are for the people, but, by my calculation, they have not made any money in 100 years. Maybe they broke even, and if they did, it was only by the width of a man’s back and the patience of his mind that they were able to eke out a living. This area has been for beauty, and would never bring the riches of Manhattan. Everyone knows this, and New Yorkers know this.
Enter Bitcoin. Enter smart Private Equity. Enter Hedge Fund managers who live along the railway and have been looking out the window on the way in and out of the city. First, I must explain my thesis. I think electricity is undervalued as a commodity by as much as 1000%, and it would not surprise me if the kilowatt per hour price of electricity goes from .025 in some US states to as much as $2.00 by 2025. I say this because I watched gasoline prices rally from 12 cents per gallon to $5.00 per gallon as the demand cycle for energy exploded.
The demand cycle for electricity is already exploding, and this has to do with the profits available for anyone who mines digital currency. Click here to learn more about what Digital Mining is. But a brief description from Investopedia sums it up pretty well, ” Bitcoin mining is the process by which transactions are verified and added to the public ledger, known as the block chain, and also the means through which new bitcoin are released. Anyone with access to the internet and suitable hardware can participate in mining. The mining process involves compiling recent transactions into blocks and trying to solve a computationally difficult puzzle.”
I have been fascinated by digital mining since 2014 when I learned what it was. I traded Technology Stocks for a large San Francisco hedge fund in the 1990s, and I specifically traded hardware stocks during the Dot.com Bubble, so I know how asset valuations can rise and fall and get crazily out of whack! I can tell you that the move we are having in Bitcoin is not a mistake or a bubble. Rather, it is a paradigm shift in the way the consumer pays for goods and services. Moreover, the underlying blockchain technology will change all of our lives – everything we do – for the better. Medical records, clearing stock transactions, real estate titles, auto and truck ownership records, everything you own in the future will be registered on the blockchain and the system will be much more efficient.
Bitcoin is forcing hydro dam owners to reconsider. They wonder why someone shows up at their door with a check and wants to buy assets that have sat dormant for years, willing to buy at the offer price, no questions asked. The buzz in these smaller communities is not about the rich millennial coders buying houses in Hudson, New York. The buzz is about investors transforming a beaten down infrastructure and rebuilding these and making them more efficient, and using alternative energy like water, wind and the sun, and not gulping fossil fuels. This generation of investors (Boomers) knows that 200 years ago a cotton mill sat on the natural falls in towns like Valatie, New York, and that the model has shifted from milling to mining – and it has little to do with digging one shovel full of dirt. Digital Mining is about converting Electricity into Bitcoin or one of the 800 mineable digital currencies from Etherium to Pelecoin.
So to sum things up, as our economy switches to a blockchain/bitcoin driven society, I recommend that you open a Coinbase account (one of the more consumer accessible venues) and start doing research about the 1500 different digital currencies available. These are all investible assets, and you need to do your homework, but I can tell you if you follow a strategy of buy only, long only, and buy and hold some of the smaller digital currencies like Ripple, Litecoin, IOTA and NEM, you are buying currency for the future. These are the same as the investments we made in the 1990s when Apple was $6. I know I had it in my portfolio, and my boss at the fund gave me crap everyday in 1996 before Apple bought NeXT after the Steve Jobs thing. I stayed long. I am still long. because the best investment advice is the traditional buy and hold long only. But in 2018 it is no longer about Apple. It is about digital currency, hydro dams and a nice train ride to Valatie, New York.
Steve Kanaval
Portfolio Manager/Writer/ Market Analyst
Can be reached at [email protected]
Steve began his career in the Trading Pits in Chicago making markets at the Chicago Mercantile Exchange (NYSE:CME) the Chicago Board of Trade and the CBOE in the early 80’s. He ran the Morgan Stanley Derivative Prop Trading for the firm specializing in Index Arbitrage. He continued his career as a Trader/Portfolio Manager for multiple Hedge Funds during the Internet Boom of the 90’s managing large portfolios. Steve is known as an expert in MicroCap Technology Stocks and the emerging Digital Currency markets as a Portfolio Manager for his Family Office. Steve has managed portfolio’s in volatile asset classes for 3 decades as a commodity trader, hedge fund manager and digital currency trader and miner. Steve publishes his views on the asset classes in a public forum and has published more than 10,000 articles simplifying these complex and volatile assets for readers. His work is published on multiple sites including Bloomberg, Equities.com, Hacked.com, CryptoCurrencyNews as a paid contributor. His work includes research, journalism and archived video on important market volatility related to stocks, digital currency and other volatile misunderstood asset classes. He offers a humorous, unique insight and the related back stories and drivers for readers interested in volatility and emerging market assets.
Full disclosure Steve is long 25 digital currencies and sits on the board of multiple public companies involved in digital currencies, and owns shares in these companies from time to time.
