Core Insights - Bitcoin has significantly outperformed gold over the past five years, increasing nearly 1,000% compared to gold's 100% rise [1] - In 2023, gold has surged 45% while Bitcoin has only increased by 20%, leading to concerns among Bitcoin investors about its relative performance [2][3] - Central banks and pension funds are increasingly investing in gold due to inflation and global uncertainties, while Bitcoin is perceived more as a trading vehicle rather than a safe haven [8][10] Market Performance - Bitcoin, launched in 2009, has seen its price rise from mere cents to over $100,000, driven by tech-like hype [6] - Gold has been more stable, with its price hovering around $1,800 since its peak in 2012, only recently breaking out to double that [6] - Bitcoin's correlation with the tech-focused Nasdaq 100 is significantly higher (0.32) compared to its correlation with gold (0.09), indicating that Bitcoin behaves more like a tech stock [9] Investment Trends - Central banks are increasing their gold holdings, which are expected to surpass U.S. Treasury positions for the first time since the mid-1990s [10] - The concept of a "crack-up boom" suggests that as money printing escalates, investors will flock to hard assets like gold, which is currently more accepted by institutions than Bitcoin [11] - Bitcoin ownership is estimated at 295 million globally, but gold ownership, particularly in countries like China, is significantly higher, indicating gold's broader acceptance [12][13] Future Outlook - Despite gold's current lead, Bitcoin is still outperforming the Nasdaq by over 6% this year [14] - Historical trends suggest that Bitcoin typically experiences strong rallies in October and November, which could lead to a resurgence in its performance relative to gold [14]

Core Viewpoint - Gold prices have experienced fluctuations due to profit-taking and geopolitical tensions, with a significant increase of over 10% this month and approximately 45% year-to-date, indicating strong demand for gold as a safe haven asset [2][3]. Group 1: Market Trends - Gold dipped to about $3,800 an ounce after reaching a record high earlier in the month, reflecting a broader trend of declining prices in precious metals [1]. - The Bloomberg Dollar Spot Index also edged lower, indicating a potential correlation between gold prices and currency fluctuations [4]. Group 2: Influencing Factors - The deadlock in Washington regarding government funding has heightened fears of a shutdown, which could impact the release of key economic reports, further driving demand for gold [3]. - Central bank demand and a resumption of interest-rate cuts by the Federal Reserve have supported gold prices, with analysts from Goldman Sachs and Deutsche Bank suggesting that the rally may continue [3]. Group 3: Trader Behavior - Profit-taking at the end of the month is suspected, particularly involving Chinese traders reducing their positions ahead of the Golden Week [2].

Group 1 - The price of gold reached a record high of $3,757.60 per ounce, indicating investor fear and a search for safe havens, while the S&P 500 also hit a new all-time high at 6,664.36, reflecting optimism in the stock market [1][2] - Deutsche Bank's analysis suggests that investors are simultaneously bullish on equities and fearful of significant downside risks, highlighting a complex market sentiment [3] - Historical context shows that high gold prices often correlate with economic uncertainty, as seen in September when gold prices surpassed their inflation-adjusted peak from January 1980, a period marked by recession fears [4] Group 2 - Current investor fears include persistent U.S. inflation above target, potential government shutdowns, and concerns over a slowdown in payrolls, which have led to expectations of rapid interest rate cuts [5] - There is speculation about AI stocks being in a bubble, reminiscent of the dot-com boom, which previously caused a decline in gold prices due to over-optimism in tech stocks [6]

Geopolitical Risk Assessment - The market currently perceives no significant tail risk, with Iran unlikely to disrupt global trade substantially [1] - The market is trading the situation as a successful US intervention, ending uncertainty around Iran's nuclear program [2][3] - The key market concern is a sustained blockage of the Strait of Hormuz, which would disrupt regional oil flow and affect the global economy [5][6] Market Reaction and Trading Strategy - Macro traders are closely monitoring the situation, but the market's reaction will be subdued unless there is a significant event [2][4] - Any headline other than a sustained Strait of Hormuz blockage will likely cause a temporary risk-off reaction that will be faded [6] - It is sensible to trade based on the current narrative until a development changes the situation [3] Dollar as a Safe Haven - The dollar is experiencing a slight haven bid due to marginal de-risking and deleveraging into the world's reserve currency [9] - The US benefits from higher oil prices as the world's largest oil producer, which supports the dollar [7][8] - The dollar's slight increase should not be mistaken for a major haven bid, as gold and treasuries are lower [10]

Inflation & Stagflation - One-year inflation dropped significantly from 66% to 51% [1] - Middle East tensions may lead to stagflationary pressures, raising concerns about the extent of this impact [1][2] US Treasury Market - The world is losing confidence in the sovereign side of the US, impacting safe-haven flows into the Treasury market [2] - Investors are distinguishing between the sovereign side and the corporate side of the US, leading to a less pronounced equity sell-off [3] - Investors are gradually reducing US bond exposure, with central banks increasing gold reserves as an alternative [4][5] - Treasury yields have become less predictable, decoupling from traditional correlations [7] Global Economic Order - The global order, which relied on the US, is experiencing a gradual fragmentation [8] - The US is facing policy-induced volatility, which is unusual for the world's most predictable player [9][10] - Market implied probability of recession in the US has fluctuated significantly, from below 10% to over 70% and back below 30%, raising concerns about economic stability [10]

Core Insights - Berkshire Hathaway has achieved an impressive gain of approximately 17% in 2025, despite a general market decline [1] - Coca-Cola's stock has increased nearly 10% year to date, attributed to its effective "all-weather strategy" [1][2] - Coca-Cola reported Q4 net revenue of $11.5 billion, a 6% year-over-year increase, with earnings per share rising 12% [2] Company Performance - Coca-Cola's operating margin improved to 23.5% from 21% in the previous year [2] - The stock is perceived as a safe haven, appealing to investors during market volatility [3] - Other stocks in Berkshire Hathaway's portfolio, such as BYD, Marubeni, and Sumitomo, have outperformed Coca-Cola this year [5][6] Investment Considerations - Coca-Cola may not be the best choice for growth investors, who might prefer stocks like BYD or Amazon [7] - Value investors may also seek alternatives, as Coca-Cola's forward earnings multiple is approximately 23.6, which is not considered cheap [8] - Coca-Cola is an attractive option for income investors, offering a forward dividend yield just below 3% and a record of 63 consecutive years of dividend increases [9]