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  #141  
Old 07.05.2018, 10:37
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Re: Get started trading crypto currencies

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The volatility of cryptos is way beyond my risk appetite. If I had a crystal all maybe I would be more tempted to invest but I don't and am not willing to lose money on pure speculation. Tech stocks are imo much safer in comparison as t least you have a lot of information to hand such as constant earnings reports and can research future directions that the companies and tech are going.
What is clear is that it's your money and you get total respect for spending it (or investing it) as you want.

I would not use the terms "pure speculation" because it's not only based on speculation, it has also some solid (revolutionnary) technologies/concepts behind. Like public ledgers, immutability, blablabla. Also take a look at Augur (REP), even if the concept seems... not 100% full proof, it does bring some form of "collective intelligence" (or masses of idiots together lol). The concept is like a participant can gives his own prediction, in exchange of stakes. If that person was right, he gets some return, if not, a loss (it's discouraging random votes). Overall, the entire system being made up of numerous participants, it's supposed to give a "collective prediction".

Ok I chose that example on purpose because it's open to debate on it's usefulness and/or efficiency. Nonetheless it's not entirely based on nothing.

I also agree comparing traditional companies, yet the returns are not the same, and it's a choice: do you want to be supporting a revolution or do you want to be more...stable?

In the end I don't think it's only all about the money, surely I'm a bad investor (I'm learning), yet there's something more to cryptocurrencies. Which is also why despite the huge risk, there's possibility of huge return (and huge losses ).
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  #142  
Old 07.05.2018, 10:43
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Re: Get started trading crypto currencies

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What is clear is that it's your money and you get total respect for spending it (or investing it) as you want.

I would not use the terms "pure speculation" because it's not only based on speculation, it has also some solid (revolutionnary) technologies/concepts behind. Like public ledgers, immutability, blablabla. Also take a look at Augur (REP), even if the concept seems... not 100% full proof, it does bring some form of "collective intelligence" (or masses of idiots together lol). The concept is like a participant can gives his own prediction, in exchange of stakes. If that person was right, he gets some return, if not, a loss (it's discouraging random votes). Overall, the entire system being made up of numerous participants, it's supposed to give a "collective prediction".

Ok I chose that example on purpose because it's open to debate on it's usefulness and/or efficiency. Nonetheless it's not entirely based on nothing.

I also agree comparing traditional companies, yet the returns are not the same, and it's a choice: do you want to be supporting a revolution or do you want to be more...stable?

In the end I don't think it's only all about the money, surely I'm a bad investor (I'm learning), yet there's something more to cryptocurrencies. Which is also why despite the huge risk, there's possibility of huge return (and huge losses ).
It is certainly fun and ineteresting to speculate about but unless you are extremely wealthy and can afford to lose money on speculation then to me the risk is simply not worth it. The days where you can put 1k chf on crypto and get a 50k return are long gone, in fact many people who bought at 14-19k during the peak of the crypto-mania made a loss and will continue to be at a loss until (or if) it rises again to 20k.

At the current price of 10k buying a couple/few bitcoins represents a serious investment in a volatile and high-risk currency. Unless you really have a good indication that bitcoin will rise significantly in the long-term it is as close to being in a casino as you I can personally imagine in the investment world.

I have close to zero desire to subject 20-50k of my hard-earned money to that kind of risk.

Last edited by Chuff; 07.05.2018 at 11:04.
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  #143  
Old 07.05.2018, 10:46
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Re: Get started trading crypto currencies

Buffett & Munger reaffirmed their obvious opinions on cryptocurrencies this weekend at the Berkshire annual meeting:

"It's like somebody else is trading turds and you decide you can't be left out"

"Cryprocurrencies will come to bad endings"

I'll stick with the wisdom of Ben Graham and invest only in productive assets
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  #144  
Old 07.05.2018, 11:00
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Re: Get started trading crypto currencies

Jesus speculating Christ on Wallstreet.
Looks like the forumīs AI broke out in a sweat because itīs advertising that cryptocurrencies are real, and all in capital letters in case we had not noticed.
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  #145  
Old 07.05.2018, 11:08
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Re: Get started trading crypto currencies

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Buffett & Munger reaffirmed their obvious opinions on cryptocurrencies this weekend at the Berkshire annual meeting:

"It's like somebody else is trading turds and you decide you can't be left out"

"Cryprocurrencies will come to bad endings"

I'll stick with the wisdom of Ben Graham and invest only in productive assets
You forgot Munger's "money quote":

"Suppose you could make a lot of money trading freshly harvested baby brains. Would you do it? To me bitcoin is almost as bad."

Maybe he needs to refresh his meds...
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  #146  
Old 07.05.2018, 11:46
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Re: Get started trading crypto currencies

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I'll stick with the wisdom of Ben Graham and invest only in productive assets
I would debate if some cryptocurrencies are productive assets or not.

According to Serguey Brin, cryptocurrencies have been directly responsible for a significant raise of the computing market. Therefore, it appears productive.

And it certainly has been productive for companies like Binance, who in return you can buy the binance coin and have a return on your trading transactions...

I do not know how much these 2 old people understand cryptocurrencies. I acknowledge they did well in their own field, nonetheless that does not make them expects in technologies they might not comprehend. So I would take their comment as potentially out of the scope of their competencies and kindly disregard it, or at least, take it with reserves.
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  #147  
Old 07.05.2018, 11:52
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Re: Get started trading crypto currencies

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"Cryprocurrencies will come to bad endings"
Sure, if someone make a generalization like that... It's a garbage comment spread by medias.

What crypto?
Bad ending? for who? Surely the likes of Coinbase are enjoying numerous very happy endings thanks to the fees.
For users? which ones? Numerous made incredible profits.

Dumb users who bought BTC when it was 20K USD? Oh wait, you mean the one who bought them using their credit cards (and paid significantly higher fees?). These one were doomed from birth anyway.

There are numerous cryptocurrencies project with real jobs behind. Real professional and expertise.

Sure, some crypto are scams and sure, some platforms are either incompetent (hello Coinbase!) or thiefs. For them yes, there are black clouds around. That does not means that it will impact all cryptocurrencies, in fact, when the crappy one will be out, the capital will concentrate in the great ones which will improve their worth.
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  #148  
Old 07.05.2018, 11:57
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Re: Get started trading crypto currencies

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I would debate if some cryptocurrencies are productive assets or not.

According to Serguey Brin, cryptocurrencies have been directly responsible for a significant raise of the computing market. Therefore, it appears productive.

And it certainly has been productive for companies like Binance, who in return you can buy the binance coin and have a return on your trading transactions...

I do not know how much these 2 old people understand cryptocurrencies. I acknowledge they did well in their own field, nonetheless that does not make them expects in technologies they might not comprehend. So I would take their comment as potentially out of the scope of their competencies and kindly disregard it, or at least, take it with reserves.
I think it's extremely risky to say "these guys are old, the world has moved on". That's happened countless times, for example in the 2000 tech bubble when everyone was piling into overpriced stocks and got crushed later. Disregarding a comment from these men in the field of finance is a bet I wouldn't want to take.

I would disagree completely with it being a productive asset. Cryptocurrencies don't do anything. They don't earn anything for you.
It sure has been productive for the peddlers of these new cryptos but only because they sell it to people who buy it in the hope of selling it to someone else later at a higher price.

Gold is another example of an unproductive asset. Over the long term, decent productive assets kill unproductive assets in investment returns. It will be the same story for cryptos.
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  #149  
Old 07.05.2018, 12:02
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Re: Get started trading crypto currencies

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I think it's extremely risky to say "these guys are old, the world has moved on". That's happened countless times, for example in the 2000 tech bubble when everyone was piling into overpriced stocks and got crushed later. Disregarding a comment from these men in the field of finance is a bet I wouldn't want to take.

I would disagree completely with it being a productive asset. Cryptocurrencies don't do anything. They don't earn anything for you.
It sure has been productive for the peddlers of these new cryptos but only because they sell it to people who buy it in the hope of selling it to someone else later at a higher price.

Gold is another example of an unproductive asset. Over the long term, decent productive assets kill unproductive assets in investment returns. It will be the same story for cryptos.

what about cash? is cash a productive asset?
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  #150  
Old 07.05.2018, 12:04
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Re: Get started trading crypto currencies

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I think it's extremely risky to say "these guys are old, the world has moved on". That's happened countless times, for example in the 2000 tech bubble when everyone was piling into overpriced stocks and got crushed later. Disregarding a comment from these men in the field of finance is a bet I wouldn't want to take.

I would disagree completely with it being a productive asset. Cryptocurrencies don't do anything. They don't earn anything for you.
It sure has been productive for the peddlers of these new cryptos but only because they sell it to people who buy it in the hope of selling it to someone else later at a higher price.

Gold is another example of an unproductive asset. Over the long term, decent productive assets kill unproductive assets in investment returns. It will be the same story for cryptos.
I agree about old people. I am trying to communicate that it's not because they say it that it's necessarily true. There are real factors like age and possible grasp of latest technologies which can influence and moderate their comment. Now I am not saying old people = zero understanding of technologies, in fact they might even be more knowledgeable on that field than me, and surely there are out there some older people better than me.

I'm just pondering.


Maybe it's not "productive" as per definition. I think it's all in the link of directly generating a revenue or not. For Augur, it would be productive since you'd get an income if your contribution was correct. It also somehow relates to some form of gambling too, so it's not 100% clear.
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  #151  
Old 07.05.2018, 12:07
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Re: Get started trading crypto currencies

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what about cash? is cash a productive asset?
I would say no.

Cash is almost guaranteed to lose value over the long term through inflation. It has no 'productivity' in itself...

However, a company making cash flow, a bond paying income in cash, these are productive assets.

"What the wise man does in the beginning, the fool does in the end"
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  #152  
Old 07.05.2018, 12:10
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Re: Get started trading crypto currencies

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I agree about old people. I am trying to communicate that it's not because they say it that it's necessarily true. There are real factors like age and possible grasp of latest technologies which can influence and moderate their comment. Now I am not saying old people = zero understanding of technologies, in fact they might even be more knowledgeable on that field than me, and surely there are out there some older people better than me.

I'm just pondering.


Maybe it's not "productive" as per definition. I think it's all in the link of directly generating a revenue or not. For Augur, it would be productive since you'd get an income if your contribution was correct. It also somehow relates to some form of gambling too, so it's not 100% clear.
I understand what you mean. It's not good to follow 'authority' without any critical independent thinking. That would make it more like a religion.

But using common sense, why does anybody buy bitcoin, especially as a significant % of a portfolio rather than a small punt? What makes somebody think that this price that they paid for a bitcoin is reasonable? There is no way to value it. It has no intrinsic value.

Ben Graham wrote The Intelligent Investor in 1949 and it applies just as much today as it always has.
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  #153  
Old 07.05.2018, 13:21
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Re: Get started trading crypto currencies

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But using common sense, why does anybody buy bitcoin, especially as a significant % of a portfolio rather than a small punt? What makes somebody think that this price that they paid for a bitcoin is reasonable? There is no way to value it. It has no intrinsic value.

Ben Graham wrote The Intelligent Investor in 1949 and it applies just as much today as it always has.
The same as holding a 100USD note. Today you can exchange it for a pair of shoes. What if tomorrow the value of the USD drops a lot and you actually need 1000USD for the very same pair?
What if you exchange it in Switzerland for 100chf yesterday and today it's only worth 10chf (minus bank fees)?

That is in fact similar with BTC (Bitcoin), expect that currently it's value is rather fluctuation (In fact not so much lately). Something which made difficult to actually understand the value of a coffee in BTC because yesterday it could have been 0.0000001BTC and today it could be 0.0000000001BTC. So out of "confort" we revert to translate that value in USD so we can more or less understand. Yet in fact it's the same principle, BTC has a value and a market determines its price. A change since the one defining value of traditional moneys are the banks and governments.

Think how much improvment BTC has brought to people in Zimbabwee where there money had a funny value (1 00000000000 ZW$ for a coffee).


I don't see that valuation issue as a significant problem, even if, for daily transactions it can be confusing or lack of repairs.
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  #154  
Old 07.05.2018, 13:51
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Re: Get started trading crypto currencies

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The same as holding a 100USD note. Today you can exchange it for a pair of shoes. What if tomorrow the value of the USD drops a lot and you actually need 1000USD for the very same pair?
What if you exchange it in Switzerland for 100chf yesterday and today it's only worth 10chf (minus bank fees)?

That is in fact similar with BTC (Bitcoin), expect that currently it's value is rather fluctuation (In fact not so much lately). Something which made difficult to actually understand the value of a coffee in BTC because yesterday it could have been 0.0000001BTC and today it could be 0.0000000001BTC. So out of "confort" we revert to translate that value in USD so we can more or less understand. Yet in fact it's the same principle, BTC has a value and a market determines its price. A change since the one defining value of traditional moneys are the banks and governments.

Think how much improvment BTC has brought to people in Zimbabwee where there money had a funny value (1 00000000000 ZW$ for a coffee).


I don't see that valuation issue as a significant problem, even if, for daily transactions it can be confusing or lack of repairs.
That post was confusingly written and hard to understand, but to me it seems like you are trying too hard to convince yourself that Bitcoin are a good investment based on ideals and principles as opposed to actual facts.
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  #155  
Old 07.05.2018, 14:00
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Re: Get started trading crypto currencies

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The same as holding a 100USD note. Today you can exchange it for a pair of shoes. What if tomorrow the value of the USD drops a lot and you actually need 1000USD for the very same pair?
What if you exchange it in Switzerland for 100chf yesterday and today it's only worth 10chf (minus bank fees)?

That is in fact similar with BTC (Bitcoin), expect that currently it's value is rather fluctuation (In fact not so much lately). Something which made difficult to actually understand the value of a coffee in BTC because yesterday it could have been 0.0000001BTC and today it could be 0.0000000001BTC. So out of "confort" we revert to translate that value in USD so we can more or less understand. Yet in fact it's the same principle, BTC has a value and a market determines its price. A change since the one defining value of traditional moneys are the banks and governments.

Think how much improvment BTC has brought to people in Zimbabwee where there money had a funny value (1 00000000000 ZW$ for a coffee).


I don't see that valuation issue as a significant problem, even if, for daily transactions it can be confusing or lack of repairs.
I would also not consider a USD note as an investment. It's a currency that can easily and quickly be converted to goods, services or indeed investment assets. Holding cash over long periods of time is a terrible idea since it's a guaranteed way to lose money (value).

Cryptocurrencies may indeed have some function as a currency where there are populations without bank accounts, access to payment systems, etc. However, just because a currency has a function, doesn't make it a productive asset and it doesn't make it wise to speculate that you'll be able to sell this asset for a higher price in the future - which is the entire concept of 'investing' in bitcoin.
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  #156  
Old 07.05.2018, 15:45
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Re: Get started trading crypto currencies

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That post was confusingly written and hard to understand, but to me it seems like you are trying too hard to convince yourself that Bitcoin are a good investment based on ideals and principles as opposed to actual facts.
Meh I'm just multitasking.

Facts are there, look this type of article, talking quickly about fiat currency value:
https://www.cnbc.com/2018/01/16/skep...yre-wrong.html
I actually read more significant article about it, I just don't see the point to make a summary here.

I'm not trying to convince anyone, let alone myself, I'm just debating that Fiat currencies have a value somehow...virtual.

I never say bitcoins are a good investment. As for cryptocurrencies, well... I don't know if it's a good investment. We agree on risky one. Good as in "generating a profit"... well... I think it's more like one which can be good, which is why I am trying. In fact if you read the topic from the start, I was here during harder times as well and always see it's potential and always aware of the risks and losses.
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Old 07.05.2018, 16:18
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Re: Get started trading crypto currencies

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Meh I'm just multitasking.

Facts are there, look this type of article, talking quickly about fiat currency value:
https://www.cnbc.com/2018/01/16/skep...yre-wrong.html
I actually read more significant article about it, I just don't see the point to make a summary here.

I'm not trying to convince anyone, let alone myself, I'm just debating that Fiat currencies have a value somehow...virtual.

I never say bitcoins are a good investment. As for cryptocurrencies, well... I don't know if it's a good investment. We agree on risky one. Good as in "generating a profit"... well... I think it's more like one which can be good, which is why I am trying. In fact if you read the topic from the start, I was here during harder times as well and always see it's potential and always aware of the risks and losses.
I think, if you're that way inclined, bitcoin can be a gamble in a small part of a quality portfolio, as can gold or other assets classically defined as a 'hedge' for bad times (however I would certainly not place a crypto in the same league as gold since it's ridiculously volatile and with limited history).

Just be aware that over the long-term, productive assets will most likely have far superior returns than any non-productive asset, especially productive assets carefully chosen and bought at fair value or better. Be aware also that predicting a higher price in the future is a gamble and on an extremely volatile vehicle.

(p.s. I'm using bitcoin as a synonym for crypto)
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  #158  
Old 07.05.2018, 20:24
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Re: Get started trading crypto currencies

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The thing is with Tech stocks, your research is not going to be very different to everyone else so it's reflected in the price.

To put research into perspective $10,000 invested in gold in 1942 it would be worth $400,000 today, buying the S&P500 index & reinvesting dividends would be worth $51,000,000.
10000 bucks invested in BTC 8 years ago would be worth just shy of a billion.
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Old 07.05.2018, 20:49
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10000 bucks invested in BTC 8 years ago would be worth just shy of a billion.
Firstly, how likely do you think it is that somebody would have bought BTC at the low, buying 10,000 USD (not a small amount for such a speculative and unknown product) and then continuing to hold it all the way up to a billion?

Secondly, stocks and other assets have fundamentals which tend to improve with time, such as earnings. This basically tells you if the company is still at a decent price or not, and is what drives the share price up over time (short term, the stock market is a voting machine, long term it's a weighing machine). This means that you can always use the fundamentals and intrinsic value to judge whether you should stay invested or move funds elsewhere. With bitcoin, there is no such fundamental value. It's only going up because of the euphoria around it, which is completely impossible to judge. The past price doesn't matter. What matters is, how is the business, and can I buy it at a fair price or better?

Thirdly, I find it highly likely that in a few years it'll be more like '10,000 bucks invested in bitcoin would've been worth nearly a billion and then fell to zero'.
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Old 07.05.2018, 20:55
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Re: Get started trading crypto currencies

Maybe I should have added the word hypothetically to save your fingers.
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