Dan Russo, Potomac Fund Administration CMT, joins Yahoo FInance’s Kristin Myers and Alexis Christoforous to debate market response to earnings season and strikes within the crypto market.
KRISTIN MYERS: So let’s do a deeper dive into the market motion. We’re joined now by Dan Russo, portfolio supervisor at Potomac Fund Administration. Dan, I need to get to the broader market motion in only a second. However I do need to point out, of us know at present as 4/20 for apparent causes.
But it surely’s additionally Doge Day, as of us are pledging to attempt to take Dogecoin to $1. It isn’t going properly proper now, about $0.35. That’s within the purple proper now, down over 7 and 1/2%. Now, yesterday, Eddie Ghabour mentioned that Doge wouldn’t exist as soon as this crypto bubble bursts. I need to ask you, one, if we’re in a cryptocurrency bubble as you see it, and what do you suppose the long run holds for Dogecoin?
DAN RUSSO: You recognize, it is arduous to say what the long run holds for Dogecoin. Do I believe we’re in a crypto bubble? That is arduous to say as properly. The best way I view crypto is the best way I view another asset that is tradable and liquid. I come to the markets, and now we have Potomac come to the markets from a pattern and momentum perspective after which add in just a little little bit of sentiment. So if you happen to have a look at what’s taking place with Doge proper now, proper, arguably, a bullish pattern with lots of momentum behind it and lots of bullish sentiment behind it.
I believe what’s necessary, whether or not you are buying and selling crypto or any crypto asset or any asset normally, is basically the method that it’s a must to handle your dangers. It is one factor to determine that one thing has made a parabolic transfer to the upside and making an attempt to take part in it. It is one other factor to have an understanding of what are you going to do when that change– when that pattern adjustments and the way are you going to handle your threat. Whether or not it goes from $0.35 to $1 from right here, clearly, the pattern is to the upside. There’s lots of momentum behind it. Who can see the long run? No one. And that is why threat administration is such an necessary a part of any course of.
ALEXIS CHRISTOFOROUS: Dan, is there a spot in somebody’s portfolio– and that is, in fact, a really particular person query, however want to get your ideas on different cryptocurrencies, like Bitcoin, Ethereum, Litecoin. I imply, at present we noticed Venmo come out and type of push these cryptocurrencies additional into the mainstream by saying that customers can now work with 4 digital currencies. So what’s your feeling on the longevity of, exterior of Dogecoin, all these different cryptocurrencies?
DAN RUSSO: Properly, I believe that there is definitely some longevity there, a minimum of for now, proper? Lots of people have been speaking concerning the demise of issues like Bitcoin for a very long time. And it hasn’t come to fruition. Whether or not or not it warrants a spot in individuals’s portfolios, that’s clearly a person choice that must be made inside the context of general targets, definitely threat tolerance, proper?
The cryptocurrencies particularly, Dogecoin and issues like Ripple, however Bitcoin as properly are typically fairly unstable. So a minimum of having an understanding of that volatility and the place an asset like that matches in for you as a person, to your targets, your aims, and your threat, is definitely a dialog that I believe individuals needs to be having.
KRISTIN MYERS: Dan, earnings season kicked off pretty robust with the banks reporting. We have a few firms which have reported already additionally beating expectations. Proper now, nevertheless, we’re seeing all three main indices within the purple. What catalyst do you suppose the market is searching for to the upside?
DAN RUSSO: You recognize, earnings season is at all times fascinating as a result of everyone will get enthusiastic about earnings season but it surely’s actually the markets and the person inventory’s response to the earnings studies that we take note of. We take a really systematic strategy to the market at Potomac. Numerous our work does revolve round pattern and momentum, and particularly, what occurs when information comes out, and the market or shares do not react the best way you count on them to react? There’s data there.
So we did get some robust earnings from the banks final week. We proceed to get robust earnings this week. And the market has turned just a little bit uneven. Earnings usually might be a catalyst, however maybe, on this case, the catalyst might be a promote the information sort occasion within the occasion that lots of the excellent news has already been priced in. Expectations for earnings are clearly elevated as we lap the primary half of final yr when the worldwide economic system was dropped at a halt. So, looking on the response to earnings, I believe is much more instructive than making an attempt to find out [INAUDIBLE] themselves are going to be.
KRISTIN MYERS: All proper, Dan Russo, Potomac Fund Administration, thanks a lot for becoming a member of us at present.