Q1 2025 Wealth Growth Update

24.0% 9 year CAGR, 1.4% YTD return. Doubling under 3 years.

24.0% 9 year CAGR, 1.4% YTD return. Doubling under 3 years.

This has been a pretty fun year so far for investing with lots of conditions I haven’t seen before.

Is Anything Cheap?

Physical Silver

Follow the laws of the universe and nature. One of those laws that an investor can use is Reversion to the Mean. This means if something is high for a long time, it wants to go back down to its typical mid point. Or if it is low for too long, it wants to up to its mid point.

We have a scenario where the Fiat financial system is falling off the rails - globally. Countries around the world are buying Gold hand over fist. The price of gold has gone up around 44% from when I started buying around this point last year.

Silver, the sister precious metal is roughly 10x more abundant on earth relative to gold. And it has definite useful properties from the viewpoint of both collectors and real world use.

Looking at this chart, we are comparing the price of Gold to Silver. Thanks to

AutismDad

for showing this to me probably well over a decade ago.

Simply eyeballing this chart, one can easily see that we are at a high point in this relationship between numerator (Gold) and denominator (Silver).

The numerator’s demand - Gold is clearly established, fixed and building. Which means that the denominator - Silver is the variant of importance.

Any fresh investment money that I would consider investing would likely be into Physical Silver.

Looking at wind in the sails for bullion is also the ever rising global tensions.

We obviously have the ongoing risk of Russia-USA/Ukraine. There is also potential Iran-USA. And finally we have China-USA which is being put on fast-track with the effective rug pull on China’s economy.

China’s rapid GDP acceleration for the last 30 years has been from satisfying the US demand for goods. They met this demand with what can be considered as an amazing feat of industrialization to satisfy this insatiable need for goods.

Now however, this never ending request for goods has stopped. Full handbrake, no warning, full-stop. Up to a 245% tariff can effectively be seen as a ban on imports.

This change in direction from the US could be seen as highly provocative to China.

As the United States gets to the end of its hegemony - it stands to reason that wild outcomes would ensue as a society does anything to remain in control.

This could well be playing the antagonist in 3 highly powerful and deeply influential areas across the world.

What would China’s response be? Focus resources, attention, focus on fast-tracking efforts on Taiwan - conflict.

Should these 3 regions - Iran, Russia, China coordinate timing of events in any which way - this would be likely impossible for the United States to control.

Either way - conflict, uncertainty are sided towards commodities and resources.

I am also in favor of local Rare Earths, Gold Stocks, Silver Stocks.

However a sinking tide of the stock market can negate the leverage of stocks vs their physical counterparts.

Bitcoin

I’m not sure how good you are at spotting trends, but have a look at the Stock to Flow trendline (solid line) vs the actual price action (multicolored line).

Stock to Flow of Bitcoin

Following my formula, we are looking for cheap (asymmetric return) → diversification → paying down debt.

Back of the napkin math puts Bitcoin in the Asymmetric upside category.

\(\frac{365,000}{80,000} = 4.5625\)

~ 4.5x Multiplier.

Anything to Diversify Into?

I played what I suspected would be a strengthening US dollar for the last few years.

An observation is the weakening dollar from a currency diversification point of view. I’m sitting at about 8% of assets denominated in US Dollars. My assumption that the recent drop in exchange rates is due to a global move away from US Debt.

Gold has become the cool kid on the block and China are actively selling off large portions of Treasury holdings.

When I do some introspection on which currency would be strong going forward - my outlook has been the United State dollar for a long time. However neutral denominations could be seen as Gold and Bitcoin. Neither are a currency, both hold value.

Right now I am sitting at around 16.5% cash. I don’t want to be in cash position for long due to inflation’s characteristic of catalyzing cash into oblivion.

Debt to Paydown

I would love to pay down some mortgage debt on a rental property in order to increase cash flow.

In fact this is the only move I would actually like to execute right now. However the only real eligible cash I have is locked away in an account that would make it punitive to extract now. Live and Learn. Future me will never put money in Government curated savings schemes.

Freedom is the most important thing to me.

For my personal situation, I see downwards pressure on the industry I work in, so would like to decouple from that industry by having alternative sources of income coming in.

Asset Allocation