While the bitcoin bots are still holding onto their investment waiting for it to go to $100,000, I am in search of the next best thing. A lot of hatred is thrown my way when I criticize bitcoin. This is despite the fact that I called the top to the very day and I made sizable fortune shorting bitcoin here. This is not to say you can not get rich investing in cryptocurrencies. You most certainly can. However, when every fool in the world is telling you how to get rich investing in a particular sector, you can be sure you are in the mania phase and the only money left to be made is on the short side. I knew the top was in when a bunch of co-workers were all talking about bitcoin around the proverbial water cooler. Additionally, people I have not spoken to in years called me to ask if they should buy bitcoin. I sent them a link to my post here. I recommended they read the book “Extraordinary Popular delusions and the Madness of Crowds” before investing in bitcoin. One person I know bought at the very top. He took a loan out on his house to buy bitcoin. He did not take my advise. Very few do. He made up his mind and just wanted confirmation and approval from me before he bought at the top. When he disagreed with me, he told me I did not know what I was talking about. He listed all the reasons bitcoin would continue to go up. I suggested he write a few reasons why it might go down. The next thing I heard was the ring tone.
So what is the next best thing? I believe there is an incredible opportunity in the mining sector. Below are a few charts to give you a feel for how cheap this sector has become.
These ratios are approaching levels not seen since the 1960’s. The only better time to buy was in 2001. If you bought in the 1960’s and/or in 2001, you were sitting on spectacular returns of over 500% within 8-10 years.
I believe we are close to a bottom. I think in the next 8-10 years there will be 500% gains on some of these mining shares. Your co-workers will gather around the water cooler to talk about how easy it is to get rich. They will tell you, “just buy mining shares”. All of these ratios, shown above, will be at the other extreme. That will be the time to sell.