Bitcoin's Black Wednesday


The noise

  • Wednesday’s report for April released by the US Labour Department revealed that producer prices in the United States rose by 0.5% month on month or 11% year on year, a slowdown from March’s 1.6% increase. Producer price inflation still remains at multi-decade highs.

  • Aramco, the Saudi Oil Giant overtook Apple to become the world’s largest company by market capitalisation closing Wednesday’s trading session with a total market capitalisation of $2.43 trillion with Apple valued at $2.37 trillion.

  • Coinbase CEO, Brian Armstrong attempted to reassure customers that there is little risk of the company becoming bankrupt, but did concede that depositors may be considered general unsecured creditors in bankruptcy proceedings. This potentially means that bankruptcy courts could sell customers crypto assets to pay back senior unsecured bond holders, adding a new risk dimension to crypto currencies.


The numbers

Numbers-13-5-22.PNG


The nuance

We reduced equity risk this week, broadly trimming across all our equity positions. Though we remain positive on the investment prospects for all of our companies, we respect our macro analysis that indicates there is an increased risk of a deeper equity pull back. As central banks enter the ring to fight inflation it is uncertain who the victor will be, and the risk that the economy is collateral damage in this fight should not be ignored.

While we have no crystal ball and cannot predict the future, the prudent and sensible course of action is to adapt to the increased probability of a pull back and to build in resilience and optionality across a range of scenarios so that we are well placed to take advantage of any surprises on the horizon.
 

Quote of the week

“The winning recipe becomes part of British food history, following in the footsteps of the Coronation Chicken and the Victoria Sponge.”

Spokesperson, the Platinum Pudding Contest
 

A lemon Swiss roll and Amaretti trifle inspired by the Queen’s own wedding menu has been named as the official “Platinum Pudding”, beating 5,000 rivals in the competition to find the “new Coronation chicken”.

The citrus dessert, created by 31-year-old Jemma Melvin, has won the nationwide competition to find a recipe to be baked in homes across Britain as the public celebrates the Queen’s Jubilee in June.

The winning entry was chosen by judges including Dame Mary Berry, and announced by the Duchess of Cornwall. Miss Melvin, a copywriter from Southport, designed her dish after learning that The Queen had enjoyed lemon posset at her wedding to Prince Philip, choosing the flavour in her honour.

Mindful that it may one day be made by amateur chefs across the country for their own street parties, she submitted two recipes: a fully homemade baked version, and then a “cheat version” to streamline the steps. Describing how she had settled on her ingredients, she said: “I found out that The Queen had lemon posset at her wedding so I decided the pudding had to be based around the lemon flavour.

“I think it’ll be perfect for Jubilee celebrations as it’s refreshing for summer. It can also be made in a large dish or in individual portions – whichever you’d prefer.”

Source: The Telegraph

Phil Smeaton
Chief Investment Officer

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