Both speakers said that inflationary risks and low valuations make today a good time to invest in commodities. “Commodities prices are extraordinarily inexpensive,” said Gartman. “You need to own some sort of ETF that gives you access to the commodities markets.”
Gartman and Yusko also agreed on the potential for blockchain technology to touch off a revolution in the financial industry by removing the need for third-party involvement in transactions, but were split on the prospects for cryptocurrencies as an investable asset class.
Gartman called the largest and oldest cryptocurrency, Bitcoin, a “worthless commodity.” “The problem I have with Bitcoin is that if I go out and buy a car this afternoon with Bitcoin, will the car dealer, given an x number of Bitcoin, object to selling me the auto if Bitcoin falls by 5 percent?” said Gartman. “I wish Bitcoin investors well, but it’s a punter’s paradise, it moves 5, 10, 15 percent in the course of a day, and until that stabilizes, you’ll have a hard time selling me on it.”
Yusko countered that cryptocurrencies would likely replace traditional fiat currencies in the future. “Bitcoin is digital gold,” said Yusko. “For 5,000 years, gold has been money. An ounce of gold, for 5,000 years, has been able to buy a fine men’s suit. It has been a near perfect store of value for 5,000 years and we messed that up in 1971 when Nixon took us off the gold standard and placed us on the fiat standard. Now, one-by-one, the currencies are blowing themselves up. That’s what happens when currencies hyper-inflate. Paper currencies will always go towards their value, which is zero, but digital currencies will become a truly global currency … you should all take at least 1 percent and buy Bitcoin.”
Both men advocated chip manufacturers as investments to participate in the expansion of blockchain technology, with Gartman recommending Nvidia and Yusko pitching AMD as his favorite.
Yusko also called for owning more emerging markets, echoing many economists' belief that global growth and investment returns should be higher in emerging markets than in the developed world -- but Gartman disagreed, at least over the near term.
“Emerging markets are markets from which you cannot emerge during an emergency,” said Gartman. “Invariably, the stuff hits the fan and when you have to get out, you can’t get out. There will come a time where, if you bought an ETF of emerging market equities, in 25 years you’ll do great. In the course of the next two years, I think you’ll do poorly.”