Month: December 2023

Dear Valued Clients,

As the festive season approaches, we at Cresco Capital extend our warmest wishes for a Merry Christmas and a prosperous New Year!

As we reflect on the year gone by, we are reminded of the resilience and adaptability that the world of investments demands. It has been a year of challenges and triumphs, and through it all, your trust in us has been our greatest motivator. 

For this Christmas and the coming New Year, we wish you not just financial success, but the wisdom to spot opportunities where others see challenges. May your portfolios flourish and your investments bring you closer to your long-term goals.

We hope the New Year ushers in a period of growth, stability, and profitable ventures. May your decisions be guided by insight and your risks be rewarded with great returns. We look forward to continuing our journey together, navigating the dynamic world of investments with strategy and foresight.

Above all, we wish you and your loved ones health, happiness, and peace during this holiday season and throughout the New Year. 

Thank you for choosing Cresco Capital as your trusted investment partner. Here’s to a year of fruitful collaborations and shared successes!

Warm regards,

Cresco Capital Team

The capital outflow from Russia to the United Arab Emirates has doubled, reaching $2.8 billion. This is due to several factors, including:

• Simplification of the procedure for opening accounts in the UAE.
• Stable economic situation.
• High interest in real estate.

As a result:

 The UAE will invest the finances in the country’s development, for instance, they can use the capital for building new roads, bridges, airports, and other infrastructure projects.                        

 The influx of capital can stimulate the UAE’s economy by creating new jobs and increasing demand for goods and services. Additionally, it would be wise to use the capital to support research and development in new technologies.

 The UAE will become a more attractive place for investments. In terms of business, the influx of funds increases the possibility of providing loans and grants.

What other opportunities can be identified?

The UK government plans to abolish the inheritance tax in 2024. This means that heirs will not have to pay tax on property inherited.

The current inheritance tax rate in the UK is 40% for estates exceeding £325,000. The abolition of the tax will have significant implications for investors, both within the UK and internationally.

This will give investors more freedom to manage their property. They will be able to transfer their assets to heirs without additional bureaucracy, leading to increased investments in long-term assets such as real estate and stocks.

Moreover, the abolition of the tax could make the UK a more attractive place to live and do business. As a consequence, it could attract foreign investors and boost the country’s economic growth.

However, there are also some potential drawbacks to the abolition of the tax.

For instance, this action could lead to an increase in economic inequality. Wealthy heirs will benefit more from the abolition of the tax than poorer heirs.

Another disadvantage is that the UK government will lose about £25 billion a year as a result of the abolition.

What’s your opinion on this news?

The recently released movie “Dumb Money” narrates the events related to GameStop in early 2021. This story became a symbol of a new era in investing, where social networks and communities, such as Reddit, can influence financial markets.

The “Short Squeeze” Mechanism

   Hedge funds profit from falling stock prices by short selling borrowed stocks with the intention to buy them back later at a lower price. When retail investors began to buy GameStop shares en masse, their price sharply increased. This forced hedge funds, which had short positions, to buy back the shares at high prices to stop their losses, further accelerating the rise in share prices.

Role of Retail Investors and “Roaring Kitty”

   Retail investors, united through forums like Reddit’s r/wallstreetbets, began buying and holding the shares, despite price fluctuations. This “hold and not sell” strategy helped maintain high demand and share price. An investor known as “Roaring Kitty” became one of the symbols of this movement, influencing the decisions of numerous retail investors.

Context of the Story

   Before this event, hedge funds often practiced short selling of shares of companies they considered overvalued or outdated. This often led to exacerbating financial problems for such companies, including bankruptcy. However, in the case of GameStop, retail investors were able to mobilize sufficient capital through social media to counter this strategy of the hedge funds.

Changes on Wall Street

   This case demonstrated that Dumb Money can no longer be underestimated and that Wall Street now has to consider the activity of retail investors in social networks as a significant factor. It shows that market power is not exclusively in the hands of large institutional investors.

The events around GameStop exposed the complex dynamics of modern financial markets, where a combination of technology, social media, and collective actions of retail investors can have a significant impact. This case has been a lesson for all market participants about the importance of transparency, information accessibility, and that even small investors can play a key role in the world of big money.

The beginning of December 2023 proved to be an exciting time for the cryptocurrency market, especially for its most popular currency, Bitcoin. In a short period, Bitcoin’s value sharply increased, sparking widespread interest among investors and cryptocurrency commentators. Let’s consider several possible factors that could have influenced this sharp increase.

In recent years, we have seen growing interest and adoption of cryptocurrency by various institutional players, such as large corporations and banks. Possibly, insiders spread news about further adoption and integration of Bitcoin into major financial institutions and companies. This has led to increased investor interest and confidence, resulting in the rise in Bitcoin’s value. 

Political and economic events traditionally have a significant impact on the cryptocurrency market. The reasons here can be endlessly debated. 

Technical analysis and trading also play an important role in the movement of cryptocurrency prices. The increase in volatility and the rise in Bitcoin’s price could have attracted the attention of traders and analysts, who made large purchases and stimulated further growth in Bitcoin’s value. This can create a cycle of self-fulfilling predictions and attract more traders to the market. 

Meanwhile, Bitcoin continues to update its values compared to 2022! Are you keeping an eye on the rate?

Let’s talk about the underwear index, skyscrapers, and explain what baseball has to do with it all.

The Phillies Index

This is one of the more dubious and even humorous items, akin to “if you wash your car, it will rain.” It was once noted that victories by Philadelphia’s baseball teams in the World Series always preceded a crisis.

When the Philadelphia Athletics became the champions in 1929, the Great Depression began, and after their 2008 victory, a financial crisis ensued.

The Skyscraper Index

The situation here is a bit more serious. Construction and the economy are closely linked, and if the building process inevitably goes upwards – from the foundation to the completed skyscraper, then financially, it follows a quadratic function curve. Construction requires loans and investments, marking an economic peak. But as construction concludes, there’s a decline.

The Men’s Underwear Index

As long as sales are stable, everything is fine. A decrease in sales indicates that men are starting to save even on such items to preserve whatever savings they can.

The Recession Index

In 2002, The Economist magazine counted the number of articles with the word “recession” and found a pattern.

If the number sharply increases, a real crisis occurs. The index proved accurate: its signs coincided with the beginnings of recessions in 1981, 2001, and 2008.