J.P. Morgan: "OUT with Real Estate, IN with..."
Hello everyone -
This week, J.P. Morgan, the largest investment bank in the world, wrote a note to their clients that got a lot of attention.
In summary, the note said that:
J.P. Morgan believes global real estate will go down in value. As a result, they’ve taken it off their list of “alternative assets”
Instead, digital assets - crypto - are their new favorite alternative investment
Their fair value assessment of bitcoin is $38,000
We’re not going into a bear market as long as venture investors have cash to deploy (which they do - a16z just raised the biggest crypto fund ever in history - $4.5 billion)
In short - out with real estate, in with crypto.
I know this isn’t a popular take. After all, real estate is one of the most common investments in the world.
But crypto is digital real estate. It’s both the new Swiss bank account in the cloud and Manhattan property at the same time.
It’s the native currency of the Internet and the enforcement of digital property rights.
And there’s more money flowing into the space than ever before.
So today, the most important work you can do is:
survive (avoid ruin)
set yourself up for the next wave of price increases
manage your psychology
In short - it’s focusing on what you can control.
I’ve addressed point #1 at length in the past: for most people, a crypto portfolio should be just 50% BTC, 50% ETH.
Any additional risks should be a small part of your portfolio. This will reduce your odds of getting wiped out completely.
But you need to remain invested. That’s point #2.
You don’t want to be the person who reads this newsletter, but only invests when everyone and their cousin throws money at crypto at the top of the market.
A benefit of being invested is that it forces you to pay attention. And when you pay attention, you’re much more likely to understand where the next gains are going to be.
Lastly - point #3 - you need to manage your psychology.
Blaise Pascal famously wrote that all of humanity's problems stem from man's inability to sit quietly in a room alone.
And I can assure you Blaise did not have a smartphone. Or TikTok. Or 24/7 news cycles.
But in an age of abundant information, clarity is a superpower. And it’s rare.
Depressive news cycles with headlines like “BITCOIN IS CRASHINGGGG OMG!!” and red colors plastered across the screen don’t exactly like help.
So now is a good time to step away from all that.
When you zoom out, you’ll realize it’s 99% noise. And my job is to bring you the 1% that matters.
In times like these, I recommend making an extra effort to religiously control your inputs and your attention.
I personally do this through a combination of apps like freedom (which blocks everything on my computer and phone except for Notion and work), and revisiting resources like:
You might think these have nothing to do with money. But they have everything to do with how you manage your attention, emotions, and psychology.
And as Warren Buffett famously said - “The most important quality for an investor is temperament, not intellect.”
Managing your focus today will pay dividends far into the future. In 5 years, no one will care how much you paid for your crypto. All that’ll matter is that you own it.
I’ll check in with you again next week.