The Bitcoin Spot ETF Is Officially Approved

I have been waiting for this day for a long time. Companies have been trying to launch a Bitcoin spot ETF for a while now, but the SEC has never allowed it to happen. I always knew that they would one day have to approve one. Fortunately, they have…. along with 10 others.

Blackrock, Ark, WisdomTree, Invesco, Bitwise, VanEck, Franklin, Fidelity, Valkyrie, Grayscale, and Hashdex all got approved for a Bitcoin ETF, and these funds will start trading tomorrow, January 11th. Companies have been trying to launch a Bitcoin spot ETF for over a decade now as the first one proposed was back in 2013 by the Winklevoss twins. They got denied along with several others after them. Bitcoin Futures ETFs (doesn’t hold Bitcoin directly but instead buys Bitcoin futures contracts) were approved but never a Spot Bitcoin ETF (actually holds Bitcoin).

The reason that I am so excited for this and believe that this will be amazing for Bitcoin is due to several reasons. First, a Spot Bitcoin ETF makes it easier to start investing in Bitcoin. The reason for this is because one can now buy Bitcoin like a stock. They don’t have to worry about storing their crypto safely in a wallet (which can be difficult especially for people new to crypto). They can simply buy and sell Bitcoin in their brokerage accounts like any other stock or ETF.

Second, a Spot Bitcoin ETF makes it easier to store Bitcoin in a tax-free retirement account like a Roth IRA or 401k. This is something that I am very excited about, myself. I am a firm believer in Bitcoin, and I definitely want the asset in my Roth IRA. Since I believe that Bitcoin will keep increasing in value over the long-term, I want it in my Roth IRA so that when I do sell it one day, I won’t have to pay taxes.

Third, a Spot Bitcoin ETF makes it possible for people to trade option contracts on Bitcoin. This is something I have seen a huge demand for. Investors will now be able to place call and put options on Bitcoin through this ETF.

I am very excited for this news. While I don’t know how this will affect the price of Bitcoin in the short-term, I have no doubt that this will be great for Bitcoin in the long run. That said, this article is for information purposes only and should not be taken as financial advice.

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The Downsides of Money Managers and Mutual Funds

On this blog, I try to focus on providing analysis on companies to help people decide what to invest in. I also try to expose people to new companies that are not well known but could be good opportunities. That’s my goal. I have had people ask me if they should be trying to manage their own money and investments or if they should just get a money manager or invest in a mutual fund. I’m not going to answer that question as it depends on the person, but I do want to make known that going that route does have some negatives.

Before I get to the negatives, I do want to start off by saying that going the route of money managers and mutual funds is not necessarily a bad thing. I plan to get into money managing one day as I’d like to own a fund of my own. Some funds do really well. The issue is that most do not. According to Morningstar, only 26% of funds beat the S&P 500 over the decade ending December 2021.

There are several reasons most funds underperform. First, amount of capital. A lot of these funds have Billions of dollars in them which actually limits the kind of investing they can even do. Even if they find a good small company that’ll go up tremendously over the next decade, it’ll be such a small part of their overall portfolio that it’ll barely matter.

Second, fees cut into profit. Obviously, fund managers don’t work for free. They take a fee from the money that they manage. Most funds have a .25%-1% management fee with actively managed funds being highest. These fees cut into profits.

Again, mutual funds can be a good option for people looking to invest their money, but there are negatives people should realize. If one is committed to going the mutual funds route, it’s important to research as much as possible as there are thousands of funds out there and most don’t beat the S&P.

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Is Beacon Roofing Supply, Inc. Stock a Buy (Analysis)

Beacon Roofing Supply sells residential and non-residential roofing products. They are also the largest publicly traded company focused on roofing materials in North America. They have existed for nearly 100 years but are still innovating by investing in new technology to get their products to contractors as fast as possible. In this article, I want to help answer the question, is Beacon Roofing Supply, Inc. (Ticker: BECN) a stock worth buying?

Beacon Roofing Supply began in 1928 in Charleston, Massachusetts as a small regional firm with 32 employees. The company has since grown into a large corporation with more than 400 locations. They have turned themselves into one of the leading companies in the roofing industry.

The company also has some very ambitious goals. They introduced their Ambition 2025 Value Creation Framework where they plan to achieve a net sales CAGR (compound annual growth rate) of around 8% to around $9 billion. They also plan to achieve an adjusted EBITDA CAGR around 15% to $1 billion. The company is also focused on deploying capital into mergers and acquisitions with the goal of boosting shareholder value.

Beacon, at time of writing, is currently trading at a market cap of $5.54 billion. They have a trailing p/e (price/historical earnings) of 11.79. A good trailing p/e depends on many factors but usually a trailing p/e between 10-20 is considered good. The company also has a forward p/e (price divided by estimated future earnings) of 12.30. Again, there are many factors that determine a good forward p/e but usually one between 10-25 is considered good, but it is important to remember that it is taken from estimated future earnings. The company is also trading at a p/b (price/book value) of 3.15. This means that the company is trading at a fairly large premium relative to its book value. The company has around $3 billion in debt which gives it a current ratio (a liquidity ratio which is used to measure a company’s ability to meet it’s short-term obligations) of 1.73. This means that the company’s current assets are 1.73 times higher than its current liabilities. A good current ratio is normally one between 1.5 and 3.

In conclusion, the numbers for Beacon Roofing Supply, Inc. seem good for the most part. Stock research company Zacks currently has them as a strong buy, and Yahoo Finance currently has them as undervalued. They have ambitious plans for growth and are increasing revenue year-over-year.

This article is not financial advice and is for information and entertainment purposes only.

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Goodbye 2023

2023 is about to end, so I wanted to do a quick blog post on the year concerning this blog. I also wanted to write about some of the things I am looking forward to for 2024 concerning Finance by CWT.

First of all, I want to thank everyone who has decided to subscribe to this blog. I am determined to turn Finance by CWT into a large stock market research company, and I am thrilled that people have decided to follow a long and read my content. I am determined to get really good at researching stocks as I want to give people the best information possible. I want to provide information to help people find companies to invest in, and I also want to help people find companies to stay away from completely. The point is, I am very thankful for every email subscriber.

Also, a lot of the stocks I wrote about this year have had some big wins which I am excited about. Meta is up 194.13% year to date. That is an insane return. SoFi, the stock I have written about the most and the biggest position in my portfolio, is up 115.84% YTD. Another one of my stocks that I started writing about this year, Ally Financials, is up 42.82% YTD.

In 2024, my goal is to write analysis on a lot of stocks. I want to research a lot of stocks and provide as much information as possible to help people make informed decisions on what to buy. I’m very excited about that. I want to do a pretty good mixture of small, medium, and large cap stocks. I also want to write about some of the investments that I am making. I also want to learn more about other aspects of investing like options trading for instance.

2023 was a great year, subscribe to Finance by CWT by entering your email down below to be a part of our 2024.

Should Warner Brothers Discovery and Paramount Merge?

According to Axios, Warner Brothers Discovery (Ticker: WBD) and Paramount (Ticker: PARA) heads met to discuss a potential merger. The process is very early, and there’s a very good chance that this doesn’t amount to anything, but as a shareholder in Warner Brothers Discovery, I wanted to give my thoughts.

Looking at this potential deal from Warner Brothers Discovery’s point of view, this makes sense for several reasons. One, this would make them a lot bigger and better position them to compete with Disney and Netflix. Two, this would give them access to very big IP (Intellectual property) to fuel their content library. Three, Paramount owns a lot of kid shows which would help Warner Brothers Discovery tap into that market.

This also makes sense for Paramount. Paramount needs to get acquired. They’re in a lot of debt. They currently have a market cap of around $10 billion and $15 billion worth of debt. They have been in talks about an acquisition and a merger with Warner Brothers Discovery would make sense for them.

The issue is that Warner Brothers Discovery also has a lot of debt. They currently have $43 billion worth of debt in fact. They have been paying their debt down as they have gone from $55 billion to $43 billion, but they obviously still have a lot of debt. Merging with Paramount could cause a lot of problems for them. It could hurt their credit rating and some of that debt could become immediately redeemable.

In summary, as a Warner Brothers Discovery shareholder, I like the idea of a merger between these two companies as it would create a very strong company content wise. I am, however, nervous about the idea of this happening from a financial standpoint concerning debt.

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Reanalyzing My Favorite Stocks for 2024

In 2022, I bought a lot of stocks. 2022 was a down year for the market, so I was able to find some pretty great deals on stocks. This year, however, has been an up year for the market. This means that a lot of the stocks that I own are valued a lot higher now than when I bought them. The question I want to ask now though is, are these stocks still a buy?

Meta

Meta has been an amazing investment for me so far. Last year, the stock went down to $200 a share, and I bought the stock. It then fell further to around $90 a share, and I bought as much of the stock as I possibly could. At time of writing, Meta is now trading at around $353 a share. This makes Meta my best investment of the year. Meta now has a market cap of around $900 billion which means that Meta is trading at 31.19 times their earnings. While I do think that that is pretty high, I do think Meta has a lot of growth opportunity. I don’t think I’ll make even close to the amount of money I made on Meta this year next year, but I don’t currently feel the need to sell this stock.

SoFi

I write about SoFi a lot. It is actually the biggest position in my portfolio that is not an ETF. SoFi has had a phenomenal year this year. I bought majority of my SoFi position at around $5 a share. Now, SoFi is trading at $9.67 a share. At these prices, I have not been buying as much of this stock lately just because I do think that this price is a little high. That said, I am not selling my position even a little. I am a little nervous about this stock for 2024 as I believe there could be risk with their loans, but overall, I think SoFi will do well next year.

Blackrock

Blackrock is the largest asset manager in the world. I bought this stock because I viewed it as a nice dividend play with solid growth as well. Blackrock hasn’t done as well for me as the other two stocks mentioned, but Blackrock is up a little over 9% year-to-date. Not incredible returns compared to many stocks this year, but a return nonetheless. I think Blackrock is slightly overvalued at the moment, and I probably won’t buy more at these current prices. I do still view this as a good stock for people who want a low risk investment that pays a dividend.

These three stocks were my favorite stocks going into 2023. Let’s hope 2024 is just as bullish.

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3 Stocks I Regret Buying

On this blog, I write a lot about my stock market winners. Mostly because this year has led to a lot of my stocks increasing in value tremendously like Meta and SoFi. Unfortunately, I, like all investors, do have some stocks that just haven’t worked out at all. I’m not saying they won’t in the future, but these are positions that I am down on significantly.

1. AST Spacemobile Inc. (Ticker: ASTS)

I bought this stock when I first became serious about investing. I didn’t know much at all about stocks at the time, and I definitely paid for that lack of knowledge. I didn’t know about valuations at the time. Worst of all, I didn’t know about share dilution. All I knew was that ASTS was building something really cool. They’re building a cellular broadband network. This is expensive though, and they are losing a lot of money. To handle this, they’re having to issue a lot more shares to raise a lot more money. This position may end up making me money in the future, but it definitely hasn’t so far.

2. Funko Inc. (Ticker: FNKO)

I bought this stock because I thought it was undervalued. I thought it would increase in value dramatically. I was actually right about this. Shortly after buying this stock, my shares rapidly increased. Unfortunately, I got greedy, and they crashed back down just as quickly. This stock taught me a valuable lesson: don’t be greedy. There’s a great saying: Bulls make money. Bears make money. Pigs get slaughtered.

3. Bumble Inc. (BMBL)

This stock was also an early investing mistake of mine. I bought this stock the day it IPOd. I was a new investor, and again, I didn’t know how to value a stock. If I knew what I know now, I would have ran from this stock as fast as possible. Fortunately, I sold this stock before I lost too much money. Interestingly, I actually recently bought this stock again. The stock is down dramatically since IPO, and I now think its numbers are pretty great. I don’t plan to hold the stock long though. Hopefully, I don’t regret this stock again. I did learn a valuable lesson from this though: stay away from IPOs.

While these stocks have lost me money, I’m confident the lessons they taught me will make me so much more.

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A Holding Company for Land

I’ve always considered land to be an interesting investment. There’s only so much land in the world, and the scarcity around it creates value. Land is also something that people need. There’s huge demand for it. That demand plus scarcity creates an asset that I believe will always trade up over a long period of time. With that in mind, the question is, how do I get as much land as possible?

I’ve often had the idea of creating a holding company for land. I would probably call it The CWT Land Company as all the companies I have created, minus one, has had the CWT name attached to it (I’m not very creative with names). This is not a revolutionary idea. Other land holding companies exist. Many of these companies are also publicly traded as well. Even with the idea not being revolutionary, I believe that it is a great one. Here’s how it works:

Step one is obviously taking out a loan and buying land. The important thing is that that land produces revenue. What I have seen most land holding companies do to achieve this is buying farmland. They can make money off of the land by leasing the land out to farmers. That’s a good way to do it, but it isn’t the only way. One could also do camper and boat storage on the land. They could also lease it out to cell phone towers. The genius part is that it doesn’t even have to make a profit. It just has to cover the expenses of owning the land and the payments on the land. That way the land is being paid for by the revenue from the land.

Step two is getting more land. One could take out a loan on the land that they own and buy more land with it. Then they would have to set something up on that land to produce revenue to pay for the new piece of land as well. I would like to do this until I could buy a piece of land big enough to create a campground as that would pay for the land and probably be pretty profitable as well.

Step three is getting investors. Once one has enough land under the company, they can sell shares of the business to investors. They can then use that money to buy even more land! The part of this step I find interesting is the premium one can raise money at for this. I’m curious to find the number out for this. One would need to raise money at a valuation higher than the value of the land that they own, and they could do this through the revenue the land is producing.

Step four is similar to step three. Step four is taking the company public. This would be a good idea as one could raise a lot more money and start growing very quickly. It would also give me the ability to get liquidity without selling the land. I could sell part of the shares in the business without the business having to sell any land.

This is an idea that I very much would like to do. I would love to take a land holding company public under the CWT name.

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SoFi Is Getting Rid of Crypto. What Customers Should Do?

SoFi offers several financial services, one being a platform for investing. One can create several different investing accounts on the app, one being for crypto. Unfortunately, SoFi will be getting rid of the crypto part of their business. Here is what customers should do.

First, why is SoFi getting rid of crypto? One of the services that SoFi offers is banking. They are extremely focused on this segment of their business. Offering crypto is, unfortunately, a problem for regulators, so SoFi is met with no choice except to get rid of their crypto options altogether.

It’s crazy to me how crypto is seen by regulators and many government officials. Companies like BlackRock, which is the largest asset manager in the world with $9.4 trillion in assets under management, are getting into crypto now which, in my opinion, speaks volumes of the crypto market as a whole. With this in mind, it annoys me that SoFi’s banking segment would be hurt by crypto.

With SoFi suspending crypto, it puts a lot of people, including myself, in a difficult position. If one holds crypto in SoFi, they have two options. They can either sell their crypto, or they can transfer it to blockchain.com. Each one of these options has pros and cons.

One may be asking, why not just sell the crypto on SoFi and then buy it back on a different platform. This could be a good option for some but not for everyone. My crypto investment is in the positive. This means that if I sell my crypto on SoFi, I will have to pay taxes. I really don’t want to pay taxes. If one is not in the positive on their crypto, this would be an option for them.

Transferring their crypto to blockchain.com also has problems. One problem is that it’s another platform. I would imagine that many people don’t want to have to worry about another platform. I will mention that blockchain.com doesn’t charge any fees, but one would have to pay a small network fee to move their crypto to blockchain.com which goes to the miners who confirm and process the network.

All-in-all I get why SoFi is doing this. It’s the smart thing for their business as they are becoming a bank. As a shareholder of SoFi, I am happy with this business move. As a customer of SoFi, however, I don’t like it at all. It puts a lot of their customers in a difficult position.

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Bitcoin Is Rising. Why?

Bitcoin is currently trading at just over $37,000 a coin. Much higher than the beginning of the year when it was trading at around $16,000 a coin. With that in mind, one can see that Bitcoin is having a really good year. Bitcoin’s up 124% so far year-to-date which makes it one of my best performing investments of the year.

The real question is, why? Why is Bitcoin up so much this year? Especially considering the fact that a good chunk of that growth happened in the last couple months.

The big reason is the idea of a spot Bitcoin ETF. I’ve written before that Blackrock, along with several other companies, are trying to create a spot Bitcoin ETF, but the market believes we are getting really close to this being a reality. Several asset management companies are trying to create one, but Blackrock is who I am most excited about as they are the largest asset manager in the world.

I’ve been really excited about the possibility of a Bitcoin ETF. I believe that the price of Bitcoin will skyrocket when it’s approved. An ETF like this would make it so much easier for someone to buy and hold Bitcoin. It makes it easier for companies to buy Bitcoin. I believe that when this finally happens, a lot of money will pour into Bitcoin.

I’m very happy with the performance of Bitcoin so far this year.

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