One of my favorite television shows of all time is Deadwood.
The HBO series ran for three seasons from 2004 to 2006. And I was hugely disappointed when it was canceled.
The show is set in the 1870s in Deadwood, South Dakota.
The show does an incredible job of developing its characters – based on real-life residents – as they navigate the annexation of the Dakota Territory and seek their fortunes.
It is an incredible show that made every effort to stay true in representing what things were really like back then. There is no sugar coating, nothing politically correct, and it delves deep into the personal motivations of each character of the show.
Deadwood is a period drama that really pulls you in and makes you feel uncomfortable at times.
It’s full of political intrigue, shifting alliances, and – as with any great Western – a good deal of gunfights.
And it was the kind of show that I immensely enjoyed sitting down to watch when it was quiet – with a great Kentucky bourbon in my hand, of course.
I highly recommend it. But fair warning, it’s rough, violent, and definitely not for children. And there is a good deal of language thrown around.
I know what you’re probably thinking…
Has Jeff lost it?
After all, this isn’t the usual thing I’d write about.
And what does a television show – even a great one like Deadwood – have to do with investing anyway?
Well, we never know where we’ll find inspiration. And believe it or not, the characters of Deadwood could teach us an important lesson about investing.
Scaring the Prospectors
In season two of Deadwood, it is revealed that George Hearst – the mining magnate – has taken an interest in the town. Hearst knows the gold in the hills of Deadwood could be worth a fortune. So he hatches a plan to corner the market.
Hearst sends one of his agents to the town to spread rumors that the United States government is coming to Deadwood to invalidate all the mining claims held by the local prospectors.
The townsfolk – believing they are about to lose everything – trip over themselves to sell their claims for pennies on the dollar.
And who was there to buy the claims?
That’s right. It was none other than George Hearst.
Now this makes for great television. But this very thing happens all the time in the investing world.
Take bitcoin, for example. Years ago, some famous Wall Street figures had some strong words for the “king of cryptocurrencies.”
Here’s Jamie Dimon – CEO of JPMorgan Chase – on bitcoin back in 2017: “If you’re stupid enough to buy it, you’ll pay the price for it one day.”
In September of that year, Dimon even called bitcoin a “fraud.” And he said that he’d “fire in a second” any trader that was trading bitcoin.
Predictably, bitcoin – and the entire digital assets market – slid noticeably after Dimon’s comments.
But around the same time, JPMorgan was doing something surprising…
The bank was taking a sizeable position in a security that tracks the price of bitcoin. And just this year, JPMorgan announced plans to launch a managed bitcoin fund to its clients. Unbelievable.
Beware of George Hearst
We might think that this sort of behavior is rare, or that it only happens in a television series.
But sadly, it’s common practice on Wall Street. Spread doubt in the marketplace, collect assets on the cheap, and prepare for the next move higher.
Thanks to some “frightening” headlines, a group of investments that I follow closely are being hit hard. But behind the scenes, Wall Street has never been more active participating in these investments.
Goldman Sachs even recently admitted that, “[These investments] could drive $900 billion of deal-making over the next two years, despite the boom slowing.”
Now is the time to take a position with this exciting asset class. I’d go so far as to say that we may never have another opportunity like what I’m seeing today.
It’s a chance to invest in companies with the potential to be “the next Tesla” before they officially reach the public markets.
Editor, The Bleeding Edge