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Crypto Currency

Valued Contributor

Re: Crypto Currency

For those that believe in Crypto ...one of my favorite books that has ben around forever is " Extraordnary Popular Delusions and the Madness of Crowds"   It explains many things.  I may need to go look for   my copy.  It has been put up for many years in  the old trunk.    

 

 

Message 51 of 64
Valued Contributor

Re: Crypto Currency


Shenron wrote:
Overstock accepts bitcoin, so does newegg. Tons of Non profits accept it. You can buy tons of stuff with it. Must be nice to have Warren Buffet do your thinking for you. Amazon is bubble, are you high? Show me a website that doesn't use aws. They are taking over the world. As far as value of bitcoin its fluctuating but to say its not of value I disagree with. But there are a lot of incorrect statements being made about spending crypto and just regurgitated negative sentiment by its authors own admitting comes from Warren buffet and tycoons invested in big banks. I agree with Deepkc.

How do I have Warren Buffet do my thinking.  I researched Bitcoin and discovered it was unusable for a currency.  Amazon is a bubble.  AWS is the only part of Amazon that is profitable.  The rest of it a big loser.  Their P/E is 329 and their return on invested capital is a minuscule 3 percent. That is worse than auto manufactures that can be had for p/e in single digits.  Why did they buy whole foods?  Grocery stores are highly competitive and Whole food was losing market share.  But they paid over market value for it.  And the reason they did it was to show increased revenue.  So it can appear like they are growing.   Bitcoin is a ponzi scheme.  

 

How many items have you bought with Bitcoin?  Less places are accepting not more.  But whatever nothing I say will convince you as you think you will get rich quick.  

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Message 52 of 64
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Valued Contributor

Re: Crypto Currency


frogman1 wrote:


How do I have Warren Buffet do my thinking.  I researched Bitcoin and discovered it was unusable for a currency.  Amazon is a bubble.  AWS is the only part of Amazon that is profitable.  The rest of it a big loser.  Their P/E is 329 and their return on invested capital is a minuscule 3 percent. That is worse than auto manufactures that can be had for p/e in single digits.  Why did they buy whole foods?  Grocery stores are highly competitive and Whole food was losing market share.  But they paid over market value for it.  And the reason they did it was to show increased revenue.  So it can appear like they are growing.   Bitcoin is a ponzi scheme.  

 

How many items have you bought with Bitcoin?  Less places are accepting not more.  But whatever nothing I say will convince you as you think you will get rich quick.  


A 329 P/E and and  3 return on capital.  When real world interest rates catch up they will be toast unless they pay for everything with their own stock as the currency much like bitcoin.   I refer back to my old book (see above) and  Ben Grahams The Intellegent Investor published around 1929.   A 329 means profits and sales are doubling every year and will for over the next decade.  Go find one that can do that.

 

I will stick to my old boring S&P 500 and Dow Jones 30 index funds and maybe a little  Russell 2000 midcap.  

 

 

 

 

Message 53 of 64
Valued Contributor

Re: Crypto Currency

Good news for the people who are telling me I am stupid.  Bitcoin is  on sale today.  You should load up. 

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Message 54 of 64
Regular Contributor

Re: Crypto Currency

Bitcoin could be 5k tomorrow or 0. Or 10k. 

 

Its hard to to put a value on bitcoin because it is backed by hype. Or hope. What’s the real value of bitcoin .? The 19k last month or the 11k today ?  

Message 55 of 64
Valued Contributor

Re: Crypto Currency

Even lower today.  Great buying opportunities for people who believe in crypto currencies. 

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Message 56 of 64
Senior Contributor

Re: Crypto Currency

As always, I don't look at the price of bitcoin versus fiat currencies day-to-day because it isn't relevant to my portfolio.  I buy small amounts weekly ($100 automatically, sometimes $150) and have since 2012.  If my crypto value goes over 12% of my net worth, I sell.  If it goes well under 6%, I re-buy.  These automatic investments are easy, free, fast and secure.

 

The thing about "nobody uses bitcoin" is totally untrue.  When I worked, I had 3 different websites that accepted bitcoin for purchases selling legal items to normal people and we did 5-10% of our sales in bitcoin because we offered a 10-15% discount over Paypal.  Bitcoin is no longer a good value as a currency due to protocol limitations which the developers are debating and working on.  Long term, LN and SW should overcome most of the issues with high transaction fees but miners still need to earn their stake back so there's a balance.

 

Since I don't invest more than 6% of my after-income savings in crypto, it is NOT a major risk for me.  I've done well (6 figures realized and paid taxes on, but the upside is higher) but I also don't watch the price day to day unless I am transaction off-market.

 

When I rent my boats I invite others to join me and I only accept bitcoin as payment with a guaranteed rate lock.  So if they send me $1000 in deposit via Bitcoin today and we sail in 6 months, I will reprice it at their request.  It's an effortless process that doesn't involve banks or delays since I can settle it all off-chain instantly and without fees.

 

I don't invest in alt-coins (I do buy some Monero but it isn't a major stake of mine).  I monitor the code debates on Bitcoin only, and I like what I see.

 

I hate inflationary currencies (per Rothbard, Mises, Hayek) and I think people who trust inflationary currencies and progressive economics are fools destined to work until they're in the grave.  I believe they have a right to their opinion, but the only reason I "trust" fiat currencies is I know it's a method to extract wealth from the consumer class to the producer class -- not that this is a bad thing for me, but it's a horrible thing for working class folks.

 

As for crypto, I am fine if Bitcoin went to $0, I'd be down about 10% of my net worth (as the price is today when I checked after getting 7000 PMs on Facebook lol).  But I am more worried that it would bubble spike to $50,000 leaving me having to liquidate and pay taxes on money I don't want to earn yet.

 

The last time I really looked at Bitcoin's price closely, it was around $2800.  Haven't cared about it since.  It goes up, I buy $100/$150.  It goes down, I buy $100/$150.  It's inconsequential money -- I don't invest what I can't afford to lose.

 

I also buy gold and silver bullion in similar amounts.  I also buy stocks, bonds, ETFs about 3x as much.  I also invest in real estate rentals about 3x as much.  It's all about leveraging all of the various commodity and asset markets and I love me some high risk, high volatility.

Message 57 of 64
Valued Contributor

Re: Crypto Currency


ABCD2199 wrote:

 

 

I hate inflationary currencies (per Rothbard, Mises, Hayek) and I think people who trust inflationary currencies and progressive economics are fools destined to work until they're in the grave.  I believe they have a right to their opinion, but the only reason I "trust" fiat currencies is I know it's a method to extract wealth from the consumer class to the producer class -- not that this is a bad thing for me, but it's a horrible thing for working class folks.

 

 


Well who has large amounts of fiat currencies sitting on their desk?  You invest in companies or you buy government bonds. The interest rates governments have to pay on their bonds are based on the perceived risk of owning them and the likely hood that they will print them like crazy and their value will go down along with the stability of the countries economy.  That is why German Bonds, US Bonds, Russian Bonds and Venzuluan bonds vary greatly in interest rate.  And with Trump printing up money to give to the super rich, US Bonds rates will go up.  

 

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Message 58 of 64
Established Contributor

Re: Crypto Currency


frogman1 wrote:


Well who has large amounts of fiat currencies sitting on their desk?  You invest in companies or you buy government bonds. The interest rates governments have to pay on their bonds are based on the perceived risk of owning them and the likely hood that they will print them like crazy and their value will go down along with the stability of the countries economy.  That is why German Bonds, US Bonds, Russian Bonds and Venzuluan bonds vary greatly in interest rate.  And with Trump printing up money to give to the super rich, US Bonds rates will go up.  


In my defense, it's only a couple thousand worth...

 

IMG_1749.JPG

Message 59 of 64
Regular Contributor

Re: Crypto Currency

Money printing or increasing the supply has been going on well before trump. When Nixon took us off gold standard in 1971, the was the start of the decline. 

Message 60 of 64