January 2018 Newsletter: Easy as ABC

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By Ross Silver, RIA

Well sports fans, 2017 is in the books and we point the ship back into the darkness with the hope we again visit destinations of prosperity on our journey. Our Stock of the Month portfolio was Nine Hundred and Seventeen percent (917%) last year. This year we’re doing things a little differently and rather than trickle investment ideas out one month at a time, we’re going to post all of our portfolio picks all at once. You can view the 2018 SylvaCap Portfolio at (https://sylvacap.com/sylva-portfolio/). We’re also going to actively post our trading ideas in the portfolio throughout the year with the hope of matching our 2017 performance.

In the broader markets, Facebook, Amazon, Netflix, and Google (otherwise known as that F.A.N.G. stocks) did exceedingly well in 2017 and we think they’ll do well again this year. In addition to F.A.N.G. we also think banks are going to thrive given the “given”, that “given” being Fed rate hikes, at least 3 we think, in 2018. Don’t be surprised if you see a few bank names appear in the SylvaCap Portfolio.

So what does ABC have to do with anything? Well ABC stands for A – Artificial Intelligence, B – Bitcoin or cryptocurrency, and, C – Cannabis (“ABC’s)”. It seems like every company in each of the ABC industries had an amazing year in 2017 and we see no reason for the party to stop. The party will stop of course, the big question is WHEN?

When I ventured into the securities industry, I was all of 20 years old and at that time there was a really cool thing happening and that thing was called “The Internet”, the year, 1997. People were able to access “The Internet” from their home computer and Encyclopedia Britannica likely sh*t their pants because those shiny leather books that I loved getting in the mail each year as a kid had instantly become dinosaurs. No need to lookup a subject matter by the spelling on the side of the book for 5 minutes, instead take 5 seconds and type what you are looking for into the “search” box and presto, answers galore right in your home. Kids these days have no idea what the pursuit of knowledge or information on a subject matter pre-internet entailed. First we went through catalog cards, found the book on the subject matter we were interested in and then heel toe expressed it to the section of the library that contained the book and the adventure began. I write adventure because nothing was ever properly organized alphabetically. Now, you just type whatever you need in the “search” box on a search site and done. “The Internet” dramatically impacted all of our lives, much like being able to buy a joint, legally, within 5 minutes is impacting it now. The ease, organization and intelligence the ABC’s are creating in all of our lives is awesome and leading to massive run-ups in the ABC’s valuation. WHEN have they gone too far though? One thing I can say with certainty, is not too far yet…

Down To Brass Tacks

Having four children under the age of 7 is like having a tank squadron on ground made of butter. Simply getting out the door is an accomplishment. Given there are so many smart people in this world, can someone please invent a robotic nanny? The nanny in my book needs to be able to make sure the kids are safe, clothed, fed and entertained. According to my wife they need to be all of my items as well as have color coordinated clothes, not touch anything in the house if their hands are not clean, not eat anything not nutritious, not let the kids touch their hair, clothes or each other when eating, make sure the kids don’t fight, always have hand sanitizer, not… Having written that, I now see why such a machine has not been created.

I watched some of the bowl games this past weekend and it is abundantly clear that Bama and Georgia are the two best teams in the country and carbon copies of each other. This comes as no surprise given Nick Saban’s old Defensive Coordinator is the Head Coach at Georgia, Kirby Smart. The National Championship is going to be a dream come true for a lover of great defense (Ross Silver). I hate these RPO schemes and gimmick nonsense these college coaches run today. I want to see two teams line up, beat the crap out of each other and may the best and toughest team win. I took so much joy in watching Oklahoma choke because I hate what teams like Oklahoma are teaching kids as it relates to playing football. They are not teaching them football, they are teaching them stupidity. What human on Earth wants to run an RPO ever? RPO for those of you in the dark is Run Pass Option aka RPO. This is when a quarterback decides whether to run the ball or throw based on the defensive scheme that he learns from sidelines versus looking at the defense himself, which is what he should do, figure out the scheme himself (I hate this sideline look trend). In the RPO scheme the quarterback has a shelf life of maybe 3 years in college and maybe two games in the NFL which is why this scheme is worthless and dangerous and needs to be eliminated from the game. Call me old fashioned and unevolved all you want. I digress, in the National Championship game the two best DEFENSES not offenses, are lining up to play on Monday. That should speak volumes to those of you who love the gimmick nonsense on offense. I cannot wait for the game and I think Bama gets Georgia this time because Saban taught Kirby Smart and I think Smart is going to have major butterflies going up against Saban, but the “Falcon’s Heard the Falconer”. If they battle again next year, I think Kirby Smart may take Saban. I have learned a little seasoning is a good thing and very important for intellectual development, Kirby Smart will get that come Monday night. Roll Tide, by no more than 4 points please, meaning I am siding with Georgia and the points!

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