Q. “Last week’s article about Penny Cryptos really shed some light on why it’s dangerous to invest in them. With the countless coins out there, I’m sure it also makes it a high risk of scams and fraud. Is this also another reason why you wouldn’t invest in them?”

A. Without a doubt. Because it’s so easy to create a crypto currency, they are often a prime target for scams and fraud.

It is common for fraudsters to promote these assets as the next big thing, only to disappear with investors’ money once they have accumulated a sufficient following. And this can result in significant financial losses for investors.

I mean, did you know you can even create a Penny Crypto on an app. 

And you can do it all for just $20…

You can literally make a coin in your name if you wanted to.

I have more hope for a Penny Share listing on the stock market, versus a Penny Crypto that has just presented itself on the crypto market.

At least with Penny Shares, there are criteria the company must meet in order to be listed.

For example:

Share Capital: The company must have a minimum of R2 million in subscribed capital.

Working Capital: The company must have enough working capital for 12 months of operations after the date of listing.

Director’s Training: At least one director from the applying company must complete the AltX director’s induction program.

And I read the research out there.  My colleague Francois Joubert has been researching the small cap market in South Africa for more than 15 years.  I look for proven research like his, before investing in a new type of asset.

***

Important: Isn’t it time you gave your portfolio the hedge fund advantage? Learn more here.

***

Q. “Timon I see you expect Palladium to drop over 40%. And last week, I read that Ford and Tesla have agreed on a charging partnership. Do you think with the increase in Electric Vehicle sales this will also have a negative effect on the palladium price?”

A. I think with the rise in EVs this will most definitely impact the palladium price in the future.

When it comes to the automobile industry, palladium is mainly used in car catalytic converters.

These devices are found in fuel-powered vehicles to help reduce the harmful emissions and pollution that come from car exhausts.

Here’s how it works:

When the car’s engine burns fuel, it releases harmful gases. The catalytic converter takes these gases and transforms them into less harmful substances before they leave the car’s exhaust system.

This process requires palladium and other precious metals for making these converters.

With Electric Vehicles however, they don’t need catalytic converters because they don’t burn fuel and gases.

Instead, they run on electricity stored in batteries.

This means they don’t produce the same harmful gases that fuel-powered cars do, and so they don’t need palladium to reduce their emissions.

With electric vehicles on the rise, this will represent another threat to palladium. For example. In 2022, there were 10.6 million electric vehicle sales globally. And currently, there is an estimate for nearly 14 million electric cars to be sold in 2023.

And this will reduce the demand for the precious metal over the long term.