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  #181  
Old 28.05.2021, 20:42
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Re: Dogecoin

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Multiplied by x 10
The tulip mania never lasted so long & tulips can produce more tulips over time.
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  #182  
Old 28.05.2021, 20:46
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Re: Dogecoin

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The tulip mania never lasted so long & tulips can produce more tulips over time.
Comparing crypto to tulips is meaningless. Even if centralized banks digital currencies will be adopted, then it will be more likely based on on early technology of block chain which crypto’s define. It’s more sustainable then tulips. However, there is the main question of block chain technology’s real value in the future and its tokens versus speculative value defined by uninformed FOMO investors that we are seeing right now
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  #183  
Old 28.05.2021, 21:21
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Re: Dogecoin

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Comparing crypto to tulips is meaningless. Even if centralized banks digital currencies will be adopted, then it will be more likely based on on early technology of block chain which crypto’s define. It’s more sustainable then tulips. However, there is the main question of block chain technology’s real value in the future and its tokens versus speculative value defined by uninformed FOMO investors that we are seeing right now
Bitcoin has never hit anything like the value of a tulip at the peak of the bubble, 10 times salary, way more than a house in Amsterdam.
Th value of the technology is irrelevant, as far as bitcoin is concerned it uses too much power, ultimately is controlled by the Chinese so I would run a mile based on that alone.
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  #184  
Old 29.05.2021, 10:13
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Re: Dogecoin

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The tulip mania never lasted so long & tulips can produce more tulips over time.
Exactly. The cryptocurrency market has been growing rapidly for more than a decade, and it has recovered from multiple large corrections over that period, every time. So there is no "mania" or bubble.

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Bitcoin has never hit anything like the value of a tulip at the peak of the bubble, 10 times salary, way more than a house in Amsterdam.
Indeed. No out-of-control growth; Bitcoin is growing at a sustainable pace and is not in a bubble.

Thanks for underscoring this point.

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Th value of the technology is irrelevant, as far as bitcoin is concerned it uses too much power, ultimately is controlled by the Chinese so I would run a mile based on that alone.
The Chinese essentially control the mining of the few remaining Bitcoins. Who cares? There are plenty of Bitcoins already in circulation.

You seem fixated on Bitcoin; really, you should research the whole cryptocurrency market before you miss out even more. Read up on proof of stake vs proof of work, too. Bitcoin is just one of more than 4,000 cryptocurrencies.

Last edited by Guest; 30.05.2021 at 02:21. Reason: Typos
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  #185  
Old 29.05.2021, 12:42
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Re: Dogecoin

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Bitcoin has never hit anything like the value of a tulip at the peak of the bubble, 10 times salary, way more than a house in Amsterdam.
Th value of the technology is irrelevant, as far as bitcoin is concerned it uses too much power, ultimately is controlled by the Chinese so I would run a mile based on that alone.
Betting against Bitcoin’s not coming back is like trying to short sell Tesla’s stock or betting against the US market.
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  #186  
Old 29.05.2021, 13:00
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Re: Dogecoin

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Betting against Bitcoinís not coming back is like trying to short sell Teslaís stock or betting against the US market.
Still not a reason to hold an asset with an intrinsic value of zero.
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  #187  
Old 29.05.2021, 13:49
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Re: Dogecoin

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Betting against Bitcoinís not coming back is like trying to short sell Teslaís stock or betting against the US market.
Tesla puts worked quite well for me.
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  #188  
Old 29.05.2021, 13:57
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Re: Dogecoin

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Still not a reason to hold an asset with an intrinsic value of zero.
I always wonder about why there is so much hype about something having intrinsic value or not. What really matter is that the asset purchased now can be worth much more in the future despite its volatility. Who cares if it is speculative temporary value or true inherent value. Money is money. Any growth stock can drop in value for unforeseeable period of time in the future like e.g. GoPro which used to trade much higher many years ago. Same with crypto currencies, technically speaking they can be worth zero but the likelihood that it will ever happen is very small.

This is really relative viewpoint and often the whole topic of intrinsic versus extrinsic value becomes a philosophical discussion.
https://www.bloomberg.com/news/artic...e-ok-with-that
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  #189  
Old 29.05.2021, 14:06
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Re: Dogecoin

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I always wonder about why there is so much hype about something having intrinsic value or not. What really matter is that the asset purchased now can be worth much more in the future despite its volatility. Who cares if it is speculative temporary value or true inherent value. Money is money. Any growth stock can drop in value for unforeseeable period of time in the future like e.g. GoPro which used to trade much higher many years ago. Same with crypto currencies, technically speaking they can be worth zero but the likelihood that it will ever happen is very small.

This is really relative viewpoint and often the whole topic of intrinsic versus extrinsic value becomes a philosophical discussion.
https://www.bloomberg.com/news/artic...e-ok-with-that
Wut?
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  #190  
Old 29.05.2021, 14:09
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Re: Dogecoin

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I always wonder about why there is so much hype about something having intrinsic value or not. What really matter is that the asset purchased now can be worth much more in the future despite its volatility. Who cares if it is speculative temporary value or true inherent value. Money is money. Any growth stock can drop in value for unforeseeable period of time in the future like e.g. GoPro which used to trade much higher many years ago. Same with crypto currencies, technically speaking they can be worth zero but the likelihood that it will ever happen is very small.

This is really relative viewpoint and often the whole topic of intrinsic versus extrinsic value becomes a philosophical discussion.
https://www.bloomberg.com/news/artic...e-ok-with-that
Without any intrinsic value, it's valued by the greater fool method of valuation, when new greater fools stop buying at a higher the price starts to fall & will likely end at zero.

It's different this time are the most expensive words in investment.
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  #191  
Old 29.05.2021, 14:19
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Re: Dogecoin

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Exactly. The cryptocurrency market has been growing rapidly for more than a decade,and it has recovered from multiple large corrections over that period, every time. So there is no
"mania" or bubble.


Indeed. No out-of-control growth; Bitcoin is growing at a sustainable pace and is not in a bubble.

Thanks for underscoring this point.


The Chinese essentially control the mining of the few remaining Bitcoins. Who cares? There are plenty of Bitcoins already in circulation.

You seem fixated on Bitcoin; really, you should research the whole cryptocurrency market before you miss out even more. Readi up on proof of stake vs proof of work, too. Bitcoin is just one of more than 4,000 cryptocurrencies.
Not sure how you can define "sustainable" - with stocks you can look at p/e, growth prospects etc. and come up with an educated guess about what the stocks real value is and what it should be worth in a few years and thus your growth rate compared to purchase price.

What is a sustainable growth rate for crypto?

The problem with crypto is I could lose it all. I'm reasonably confident of having a decent retirement by investing in growth and quality stocks. With crypto I guess I *could* get crazy rich, but (imho more likely) I turn out to be the fool wearing the emperor's new clothes. Not a gamble I'm willing to take.
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  #192  
Old 29.05.2021, 14:29
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Re: Dogecoin

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Without any intrinsic value, it's valued by the greater fool method of valuation, when new greater fools stop buying at a higher the price starts to fall & will likely end at zero.

It's different this time are the most expensive words in investment.
Isn’t it the same theory that applies with stocks? The stock value increases based on how much investors are willing to pay. More people buy, the higher market capital gets. If the value is too high, someone will eventually sell. If the value is too low, someone will eventually buy. In the same manner, crypto coins change the owners.
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  #193  
Old 29.05.2021, 14:38
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Re: Dogecoin

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Isn’t it the same theory that applies with stocks? The stock value increases based on how much investors are willing to pay. More people buy, the higher market capital gets. If the value is too high, someone will eventually sell. If the value is too low, someone will eventually buy. In the same manner, crypto coins change the owners.
Not really as for most companies (at least excluding meme stocks like gamestop) prices are in the medium to long term driven by company fundamentals.

In the short term yes it can be driven by investor behaviour. But most of us equity folks are here for the very long term. For instance, people (myself included) can get a little rattled by corrections of 25% - but if your retirement date is decades away it's an irrelevance. Just means you are buying at a cheaper price.
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  #194  
Old 29.05.2021, 14:43
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Re: Dogecoin

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Not really as for most companies (at least excluding meme stocks like gamestop) prices are in the medium to long term driven by company fundamentals.
If I look at the “fundamentals” of major companies that I own, I could swear that they should be going up 10-20% per year but they don’t. One day you can find article about how great the stock “x” is and the next day there’s an article saying how bad the stock “x” is. Clear market manipulation in both cases whether it is equity or crypto. Same thing overall.

Similar thing with crypto, if you HODL them then your chances to gain are much higher. If one misses crypto summer I, there will be another crypto summer II after crypto winter I, and so on and so forth …
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  #195  
Old 29.05.2021, 14:46
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Re: Dogecoin

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If I look at the “fundamentals” of major companies that I own, I could swear that they should be going up 10-20% per year but they don’t. One day you can find article about how great the stock “x” is and the next day there’s an article saying how bad the stock “x” is. Clear market manipulation in both cases whether it is equity or crypto. Same thing overall.
If the business is making 10-20% more profit each year in the long term it will be worth 10-20% (compounded by the number of years ) more.

If the share price has fallen when profits have been rising and you think that profit rise is sustainable it's a buying opportunity. I currently think Alibaba for instance is far too cheap.

Look at, for instance, Tesla. Clearly it has very strong growth potential, has only just broken into profit, and hence should be trading at a high p/e. But people got overexcited and it went up to 1400 - probably too high a multiple. Now it's trading at a more reasonable 550 (you might think that's still expensive or you might not). Ultimately fundamentals win out.
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  #196  
Old 29.05.2021, 15:09
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Re: Dogecoin

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If the business is making 10-20% more profit each year in the long term it will be worth 10-20% (compounded by the number of years ) more.

If the share price has fallen when profits have been rising and you think that profit rise is sustainable it's a buying opportunity. I currently think Alibaba for instance is far too cheap.

Look at, for instance, Tesla. Clearly it has very strong growth potential, has only just broken into profit, and hence should be trading at a high p/e. But people got overexcited and it went up to 1400 - probably too high a multiple. Now it's trading at a more reasonable 550 (you might think that's still expensive or you might not). Ultimately fundamentals win out.
That’s exactly point with e.g. Bitcoin. The chart somewhat resembles Tesla’s chart. It was growing based on sentiments until people got overexcited, skittish and crash came. Now it’s trading within more reasonable range 30-40k

Then you get folks like Cathie Woods who predicts Tesla will be trading several thousands USD higher in the future while Bitcoin at 500k
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Old 29.05.2021, 15:24
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Re: Dogecoin

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Thatís exactly point with e.g. Bitcoin. The chart somewhat resembles Teslaís chart. It was growing based on sentiments until people got overexcited, skittish and crash came. Now itís trading within more reasonable range 30-40k

Then you get folks like Cathie Woods who predicts Tesla will be trading several thousands USD higher in the future while Bitcoin at 500k
But Tesla will ultimately be determined by fundamentals and has been to a good extent already. Bitcoin has none. Hence 30-40k being "reasonable" is an unsupportable statement.
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  #198  
Old 29.05.2021, 18:56
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Re: Dogecoin

easy way to value is to look at discounted cash flow and the easiest of those are perhaps fixed income government bonds as they are relatively 'secure' and give a known return.

next step may be stocks as you can value the dividend stream plus value of the retained earnings and have to factor in growth and risk.

where does this leave other things such as oil, copper, gold. commodities are determined by inventory, reserves, production capacity, demand and supply.

gold and bitcoin fall into their own category and i do think of bitcoin as a form of digital gold (though not everybody agrees with this categorization). for these high inventory, low supply items, you could use a stock to flow model and bitcoin does appear to follow it well. as bitcoin is relatively new, there remains questions over its longevity. gold has history and desirability for jewellry. bitcoin is more gold than gold in that its intrinsic use/value is very limited.

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Old 29.05.2021, 19:17
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Re: Dogecoin

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But Tesla will ultimately be determined by fundamentals and has been to a good extent already. Bitcoin has none. Hence 30-40k being "reasonable" is an unsupportable statement.
This thumb suck number is just a guesstimated result of supply and demand, appetite for risk, buy/sell limits defined by traders. The price is governed by what market believes it should be worth.

High valuation of Tesla is what lured by Musk investors believe in. It’s similar to what happened to Bitcoin when Musk announced on Twitter that Tesla bought $1.5B of BTC and planned to accept it as a payment. I hardly can see the difference between BTC and Tesla in their valuation based on fad. Perhaps Musk knows it all too well and tries to get involved in energy savvy mining of BTC instead.

https://www.cnbc.com/2021/04/06/tesl...s-analyst.html
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Old 29.05.2021, 21:06
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Re: Dogecoin

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Isnít it the same theory that applies with stocks? The stock value increases based on how much investors are willing to pay. More people buy, the higher market capital gets. If the value is too high, someone will eventually sell. If the value is too low, someone will eventually buy. In the same manner, crypto coins change the owners.
The value of stocks should be based on what investors are willing to pay for their expectations of future cash flows.

BTC doesnít have any cash flows. As far as I am aware BTC has no intrinsic value (canít be used for anything else other than as money). Itís value is based on mutual trust alone. I canít see any practical reason why people will ditch CHF or USD which are backed by security and stability of central banks in favour of BTC, which is only backed by this mutual trust which in turn is influenced by tweets from an erratic Musk who seems to know nothing about macro economics.

Stocks have bubbles too but they also burst. People buy stocks without evaluating future cash flows in a realistic way.. Many people would say this is (or at least was) the case with Tesla.
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