What does the psychological bias behind Bitcoin, Amazon’s impending launch and Trump’s defense of Putin have to do with you and your investments? (Reading time 3:12 mins)

This information does not take into account your personal objectives, financial situation or needs. You should consider if the relevant investment is appropriate having regard to your own objectives, financial situationand needs.


1. The psychology of Bitcoin

If you’ve been following Bitcoin prices, you’ll know the past few weeks have been hugely volatile – its value grew over 10 billion just hours after a dramatic sell-off.

Bitcoin’s volatility is a prime example of understanding and controlling your emotions being equally as important as understanding the investment itself.

What does this mean if you’re invested in Bitcoin?

You should watch out for the following cognitive biases if you’re currently invested, or thinking about investing in Bitcoin:

  • Loss aversion: scientists have proven most people actively avoid selling an investment for a loss because the pain is too unbearable. If Bitcoin prices fall 10%, 20% or even 50% – are you willing to sell?
  • Confirmation bias: are you only reading articles about why Bitcoin prices will rise and dismissing articles suggesting it will fall?
  • Anchoring: are you only judging current Bitcoin prices in the context of how much you paid for them originally rather than through any objective measure of value?

Beware if you’ve answered yes to any of the above. You might be letting your emotions drive your Bitcoin investing decisions.

What does this mean if you’ve invested money with AtlasTrend?

We’ve previously outlined why we don’t invest in Bitcoin.

When investing in stocks, we actively avoid psychological biases that might impact our investment decision making. Our big data investment analytics systems also helps us avoid giving in to these biases.


 2. Amazon’s almost here

Amazon is set to launch their Australian retail and Marketplace offerings “really, really soon”.

While the retail giant is remaining tight-lipped about a precise launch date, Citi analysts expect it will happen prior to Black Friday on November 24.

What does this mean if you’re invested in Australian retail stocks?

Amazon is set to eat many retailer’s breakfast, lunch and dinner.

They’re a very well-funded company who will be competing heavily on price. This is bad news for the profit margins of many Australian retailers.

To compete effectively with Amazon’s excellent online shopping experience, large Australian retailers may have to invest millions of dollars to improve their own e-commerce sites. This would be bad news for cash flow and potential returns for shareholders.

What does this mean if you’ve invested money with AtlasTrend?

Several AtlasTrend managed funds own shares in Amazon. Despite Amazon’s stock price nearly doubling over the last 2 years, we believe there is still more room to grow as the company is successfully expanding beyond its core online shopping business.

AtlasTrend’s co-founder Kevin Hua talks about the recent performance of Amazon and other tech giants here.


 3. Trump takes Putin’s word for it

President Donald Trump has exchanged some interesting words with Russia’s President Vladimir Putin at the APEC Summit in Vietnam.

Trump’s Asia trip was relatively tame till their face-to-face meeting, where Putin reiterated his country did not meddle in the 2016 U.S. elections – and Trump believes him.

What does this mean if you’re invested in the stock market?

No real impact at the moment. Markets fear uncertainty, but unpredicted comments from Trump have now become expected.

Larger potential impact stems from special counsel Robert Mueller’s ongoing investigation into Russia’s potential interference in the U.S. elections. Any significant findings against Trump or his team will throw key upcoming legislative agenda (like Trump’s tax cuts) into disarray.

If it occurs, we believe the market may react negatively initially, but over the longer term it could be a positive for the market if Trump’s power wanes, as the risk of any accidental geopolitical catastrophe i.e. war with North Korea is reduced.

What does this mean if you’ve invested money with AtlasTrend?

We do not have any direct investments in stocks with a primary stock exchange listing in Russia or any companies with a majority of their business in Russia.

To our knowledge, we also don’t have any investments in stocks in companies controlled by Trump or his family. Any potential impact on AtlasTrend’s investments from the Trump-Russia saga in the future will be due to the impact on the broader stock market.


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About Kent Kwan

Kent Kwan is a Co-Founder of AtlasTrend, an investment platform that makes it easy for anyone to learn and invest in trends impacting our world. Kent has over 17 years experience in financial markets including as Chief Investment Officer at Arowana International Limited, and roles at JP Morgan and Macquarie.