The Stock Market, Investments, and Investing Thread
#21
(06-20-2019, 08:54 PM)billydingdong Wrote:
(06-19-2019, 09:08 PM)Rhyme or Reason Wrote: I think the long game with bitcoin is as a hedge against gov over reach and hyperinflation...but that's just my simpleton opinion.

I think you're on to something with your 'simpleton' opinion, and I'd like to expand on it further. I find the topic fascinating.

Also I’ve been meaning to do a Bitcoin post and my thoughts on bitcoin as an investment, so here it is. Long post incoming…

Traditionally gold has been the standard hedge against inflation. We saw gold prices surge from the 70's to early 80's when the US went off the gold standard (1971) and inflation went batshit crazy.  We saw this all over again from 2009 - 2013 when the Fed started implementing 'quantitative easing' and the markets were expecting inflation after the Fed had pumped a metric fuckton of money into the financial system through low-interest bail-out loans. That inflation never materialized, at least in the CPI, but gold still went up regardless.

And...we're still seeing the effects of the inflation bogeyman increasing the price of gold even today. Many believe that the fed is signalling that it will drop interest rates soon.  Lower interest rates means more loans which means increased money supply which means higher inflation. Today gold shot up ~2.5% to a five year high.

The value proposition of gold is that it's believed to be a scarce resource and it's been universally recognized as a store of value and medium of exchange for millennia. This is reflected in it's market value, and at today's price gold's total "worth" (market cap) is around $7.5 trillion dollars.

So what does Bitcoin have to do with this?

Put simply, Bitcoin could eat into some of gold’s market share and become an alternative store of value and a sort of reserve currency. It is also a ‘scarce resource’ as there will only be 21 million bitcoins created.

There's a strong bull case for Bitcoin:

+ It’s the most well-known crypto currency and currently has 57% dominance of the total crypto market based on market cap.

+ It’s the longest-running blockchain and the network’s security has not been compromised

+ Its use is becoming more normalized and ‘visible’. There were 637 ATMs in June 2016 and today 3 years later there are 4,894.

+ Bitcoin's market cap is a mere 2% of gold market cap ( ~$170 billion for BTC to ~$7.5 trillion for gold)

+ It’s more easily transferable than physical gold since transfers happen on a globally distributed network/ledger

+ Major brokerages (Fidelity, TD Ameritrade, Etrade) are signalling to make Bitcoin trading open to public, which would facilitate wider adoption.

+ It’s seen price appreciation and increase in demand in crisis situations (Brexit, Venezuela collapse, Argentina election)

+ It’s shown to make tech improvements (albeit slowly) e.g. Segregated witness, Lightning Network.

In short, with sizable current adoption, evidence of continued increased adoption, recent historical increases in demand in situations of unrest, and relative ease of transfer, it has enormous potential for more growth and improving its legitimacy as a store of value.

There are also reasons to be skeptical….and I’m not going to get into that here  But all told, IMO you could do a lot worse as a ‘store of value’ hedge on a speculative asset and portfolio wild card.

Disclosure: I hold ZERO Bitcoin, but I do hold Ethereum.


Sources

Fed Rate Cut (June 19, 2019)
https://www.reuters.com/article/us-globa...TL02X?il=0

Gold Price :
https://goldprice.org/

Inflation Data:
https://www.minneapolisfed.org/community...rates-1913

Bitcoin Price + Market Cap :
https://coinmarketcap.com/

Bitcoin at Fidelity
https://www.bloomberg.com/news/articles/...-few-weeks

Bitcoin trading at Etrade
https://www.bnnbloomberg.ca/e-trade-is-c...-1.1250240

Bitcoin Trading at TD Ameritrade
https://www.tdameritrade.com/investment-...ading.page

Bitcoin after Brexit (2016)
https://techcrunch.com/2016/06/23/bitcoi...-year-low/

Bitcoin in Argentina
https://www.ft.com/content/44bfb5b8-7d4d...85092ab560

Bitcoin in Venezuela
https://www.bbc.com/news/business-47553048

It's interesting you posted that

But said you don't hold BTC and ETH instead

(Since ETH is not a Store of Value)
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#22
+1 for bitcoin. I'm a bear in everything else right now.
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#23
(06-22-2019, 12:28 AM)whiteknightrises Wrote: It's interesting you posted that

But said you don't hold BTC and ETH instead

(Since ETH is not a Store of Value)

Personally I see both ETH + BTC foremost as speculative assets (and neither as stores of value), and with that I'm more convinced of ETH's long-term utility and that it will see greater price appreciation for a variety of reasons.

However, I might be wrong and BTC could completely blow ETH out of the water... I'm willing to talk more about it in the the Crypto thread if anyone is interested.
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#24
I came across a great resource a few weeks ago, and I've been messing around with it a lot:

https://portfoliocharts.com/

If you are investing and trying to reach a savings goal, seeking financial independence, or already there, portfolio construction is an incredibly important topic for those looking to maintain and increase their wealth while also determining an acceptable risk profile.

This site is remarkable, and it shows historic returns since 1970 of various allocations of various investment classes. I've been using mostlythe DIY 'My Portfolio' section where you can manually input the asset allocations.

The data I find most interesting:

+ Annual Return Values (avg real annual return, standard deviation, % of years a given asset allocation lost money)
+ Range of portfolio values/returns over long time time frames
+ Time horizons to reach a savings target based on starting capital and contributions
+ Maximum portfolio losses (i.e. drawdowns) and time to recover
+ Safe portfolio withdrawal rates (once savings goal is reached)

Check it out! I know for most of you it's 'a bunch of numbers and graphs and shit', but I imagine someone here will find it informative.
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#25
(06-25-2019, 12:27 AM)billydingdong Wrote:
(06-22-2019, 12:28 AM)whiteknightrises Wrote: It's interesting you posted that

But said you don't hold BTC and ETH instead

(Since ETH is not a Store of Value)

Personally I see both ETH + BTC foremost as speculative assets (and neither as stores of value), and with that I'm more convinced of ETH's long-term utility and that it will see greater price appreciation for a variety of reasons.

However, I might be wrong and BTC could completely blow ETH out of the water... I'm willing to talk more about it in the the Crypto thread if anyone is interested.

Bitcoin is a SoV. Ethereum is not.
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#26
(06-25-2019, 12:27 AM)billydingdong Wrote:
(06-22-2019, 12:28 AM)whiteknightrises Wrote: It's interesting you posted that

But said you don't hold BTC and ETH instead

(Since ETH is not a Store of Value)

Personally I see both ETH + BTC foremost as speculative assets (and neither as stores of value), and with that I'm more convinced of ETH's long-term utility and that it will see greater price appreciation for a variety of reasons.

However, I might be wrong and BTC could completely blow ETH out of the water... I'm willing to talk more about it in the the Crypto thread if anyone is interested.

I think that ~a~ smart contract platform will capture a lot of value (make people a lot of money)

But I'm not sure that's gonna be ETH.

They keep pushing back the roadmap and shit

Granted, they have the most developers, investors, and overall ecosystem so they have a good shot

But they keep failing to deliver (latest announcement: ETH 2.0 "might" be released Jan. 2020) and the price has been taking a shit in Satoshis since mid-2017
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#27
(06-07-2019, 09:42 PM)samifon Wrote:
(06-07-2019, 03:54 AM)whiteknightrises Wrote: Buy Bitcoin, thank me later

Bitcoin's massively overrated. How high do you think it'll go?

You can dollar cost average into bitcoin, and you can also determine the amount that you would like to put in.  I tend to suggest that guys start out by putting anywhere between 1% and 10% of their quasi-liquid investment portfolio value into bitcoin, and of course, guys have to determine their own amounts based on their view of bitcoin as compared with other assets and their risk tolerance in that regard while they are still attempting to learn about the asset class.

There is a decent amount of information out there and even arguments suggesting that bitcoin is not necessarily a correlated asset, so that should be a good thing, and along the way and with the passage of time, we will see whether the non correlation is true, reverse correlation or partially correlated plays out.

Billydingdong does make several decent points in his post on the bitcoin topic in this thread, which shows that he has some decent ideas about what bitcoin is offering in terms of both sound money and a kind of hedge against dollar based investments (even though he seems to kind of retract some of what he had said in his later post), and like mentioned by whiteknightrises probably billydingdong should own a bit of bitcoin, even if the ownership amount is just a small amount of his total portfolio, and especially since he kind of already has decent ideas about the overall proposition of what bitcoin is offering though he seems to believe that ethereum actual offers something meaningful besides smoke and mirrors. 

In my opinion it is a BIG ASS distraction for billydingdong or anyone else to  longterm invest into ethereum because it is a different thing from bitcoin and truly is not really adding much value to the concept of hedge or sound money (or storage of value), even though ethereum is a vehicle for a lot of dumb money to get into crypto and to scam a lot of people through ICOs, but whatever, that ponzi scheme of complexity around ethereum could take 20 years before it collapses, so if anyone invests into ethereum they likely need to be careful in terms of their timing and not to get stuck in ethereum at the wrong time (which some of the contracts related to ethereum lock up value on purpose, which seems to help the ponzi scheme to keep going if enough of the value is locked up in various likely to be shitty and meaningless contracts), even though ethereum probably should have collapsed already had it not been a kind of piling on effect of continued smoke and mirrors propositions, bitcoin imitations and decent marketing to suck in more and more dumb money regarding convoluted tech and convolution regarding what value that it might offer exactly beyond pie in the sky vaporware whitepapers in which any kind of value proposition that could develop through the various ethereum based platforms might NOT end up getting absorbed into bitcoin on a longer time horizon, anyhow.

(06-25-2019, 03:15 PM)whiteknightrises Wrote: I think that ~a~ smart contract platform will capture a lot of value (make people a lot of money)

But I'm not sure that's gonna be ETH.

They keep pushing back the roadmap and shit

Granted, they have the most developers, investors, and overall ecosystem so they have a good shot

But they keep failing to deliver (latest announcement: ETH 2.0 "might" be released Jan. 2020) and the price has been taking a shit in Satoshis since mid-2017


Yes... lots of smoke and mirrors in the Ethereum space, including the extent that they supposedly have "a lot of" developers (quality of developers?) or any kind of solid investors or any kind of solid ecosystem that is not one BIG ASS house of cards ready to fall at any moment or at least devolve into more contradictions and conflicting messages about what value it is that ethereum is actually providing, and surely, like billydingdong mention, these matter related to ethereum could be elaborated more in the crypto thread, or talk about bitcoin in the bitcoin thread.
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#28
(07-20-2019, 03:22 AM)JayJuanGee Wrote: In my opinion it is a BIG ASS distraction for billydingdong or anyone else to  longterm invest into ethereum because it is a different thing from bitcoin and truly is not really adding much value to the concept of hedge or sound money (or storage of value), even though ethereum is a vehicle for a lot of dumb money to get into crypto and to scam a lot of people through ICOs, but whatever, that ponzi scheme of complexity around ethereum could take 20 years before it collapses, so if anyone invests into ethereum they likely need to be careful in terms of their timing and not to get stuck in ethereum at the wrong time (which some of the contracts related to ethereum lock up value on purpose, which seems to help the ponzi scheme to keep going if enough of the value is locked up in various likely to be shitty and meaningless contracts), even though ethereum probably should have collapsed already had it not been a kind of piling on effect of continued smoke and mirrors propositions, bitcoin imitations and decent marketing to suck in more and more dumb money regarding convoluted tech and convolution regarding what value that it might offer exactly beyond pie in the sky vaporware whitepapers in which any kind of value proposition that could develop through the various ethereum based platforms might NOT end up getting absorbed into bitcoin on a longer time horizon, anyhow.

Well...I guess that's your opinion. But respectfully, it seems like you don't know what you're talking about.

Especially the section I colored in blue above.

Putting aside the weird syntax, that's an interesting statement, and I'd like to know: what are you talking about here? How does some of the contracts related to ethereum that 'lock up value on purpose keep the ponzi scheme going?  And since you're cautioning others against Ethereum, what does this have to do with its price, value, and viability?

I seriously do not understand what you're saying here, and I bet you don't either. I've never heard anything like this, so an explanation would be helpful.

(07-20-2019, 03:22 AM)JayJuanGee Wrote: Yes... lots of smoke and mirrors in the Ethereum space, including the extent that they supposedly have "a lot of" developers (quality of developers?) or any kind of solid investors or any kind of solid ecosystem that is not one BIG ASS house of cards ready to fall at any moment or at least devolve into more contradictions and conflicting messages about what value it is that ethereum is actually providing, and surely, like billydingdong mention, these matter related to ethereum could be elaborated more in the crypto thread, or talk about bitcoin in the bitcoin thread.

Whatever you say...

But it's a lot of frothy hand waving and low-value commentary. Better to provide sources.

Here's one, an actual source, on dev adoption: https://medium.com/@ElectricCapital/dev-...6df4ff1fd2
  • Ethereum has the biggest developer team in crypto. On average, 216 developers contribute code every month to Ethereum’s repos. This is undercounting the number of Ethereum developers since we do not include ecosystem projects like Truffle.
  • Bitcoin’s developer ecosystem is very healthy 10 years after launch. On average, more than 50 developers per month contribute to Bitcoin’s repos. This is undercounting the number of Bitcoin developers since we do not include ecosystem projects like wallets.

And I'm not going to get started with legit enterprise participation (Societe Generale, Ernst + Young, Microsoft Azure, Samsung, BBVA) and promising ERC tokens (DAI, Chainlink, BAT, Augur)

Saying that the Ethereum project is a 'ponzi scheme' and all 'smoke and mirrors' is [edit] bordering on ridiculous.

Explaining what you meant in the blue text above would be a good start in seeing why you think this way despite strong evidence to the contrary.
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#29
(07-21-2019, 02:50 AM)billydingdong Wrote:
(07-20-2019, 03:22 AM)JayJuanGee Wrote: In my opinion it is a BIG ASS distraction for billydingdong or anyone else to  longterm invest into ethereum because it is a different thing from bitcoin and truly is not really adding much value to the concept of hedge or sound money (or storage of value), even though ethereum is a vehicle for a lot of dumb money to get into crypto and to scam a lot of people through ICOs, but whatever, that ponzi scheme of complexity around ethereum could take 20 years before it collapses, so if anyone invests into ethereum they likely need to be careful in terms of their timing and not to get stuck in ethereum at the wrong time (which some of the contracts related to ethereum lock up value on purpose, which seems to help the ponzi scheme to keep going if enough of the value is locked up in various likely to be shitty and meaningless contracts), even though ethereum probably should have collapsed already had it not been a kind of piling on effect of continued smoke and mirrors propositions, bitcoin imitations and decent marketing to suck in more and more dumb money regarding convoluted tech and convolution regarding what value that it might offer exactly beyond pie in the sky vaporware whitepapers in which any kind of value proposition that could develop through the various ethereum based platforms might NOT end up getting absorbed into bitcoin on a longer time horizon, anyhow.

Well...I guess that's your opinion. But respectfully, it seems like you don't know what you're talking about.

Especially the section I colored in blue above.

Putting aside the weird syntax, that's an interesting statement, and I'd like to know: what are you talking about here? How does  some of the contracts related to ethereum that 'lock up value on purpose keep the ponzi scheme going?  And since you're cautioning others against Ethereum, what does this have to do with its price, value, and viability?

I seriously do not understand what you're saying here, and I bet you don't either. I've never heard anything like this, so an explanation would be helpful.

(07-20-2019, 03:22 AM)JayJuanGee Wrote: Yes... lots of smoke and mirrors in the Ethereum space, including the extent that they supposedly have "a lot of" developers (quality of developers?) or any kind of solid investors or any kind of solid ecosystem that is not one BIG ASS house of cards ready to fall at any moment or at least devolve into more contradictions and conflicting messages about what value it is that ethereum is actually providing, and surely, like billydingdong mention, these matter related to ethereum could be elaborated more in the crypto thread, or talk about bitcoin in the bitcoin thread.

Whatever you say...

But it's a lot of frothy hand waving and low-value commentary. Better to provide sources.

Here's one, an actual source, on dev adoption: https://medium.com/@ElectricCapital/dev-...6df4ff1fd2
  • Ethereum has the biggest developer team in crypto. On average, 216 developers contribute code every month to Ethereum’s repos. This is undercounting the number of Ethereum developers since we do not include ecosystem projects like Truffle.
  • Bitcoin’s developer ecosystem is very healthy 10 years after launch. On average, more than 50 developers per month contribute to Bitcoin’s repos. This is undercounting the number of Bitcoin developers since we do not include ecosystem projects like wallets.

And I'm not going to get started with legit enterprise participation (Societe Generale, Ernst + Young, Microsoft Azure, Samsung) and promising ERC tokens (DAI, Chainlink, BAT, Augur)

Saying the Ethereum project is a 'ponzi scheme' and all 'smoke and mirrors'  is ignorant at best, and deceptive and infantile at worst.

Explaining what you meant in the blue text above would be a good start in seeing why you think this way despite strong evidence to the contrary.


I am not going to waste my time providing you any further facts, logic or my various conclusions in the direction that I already asserted.  

I stand by my previous assertions, and if you are comfortable about the solidness of ethereum's various projects, or the soundness of the money supply or the fact that there is not a pattern of behavior regarding locking up ethereum and lack of transparencies in that direction, then all  the power to you about believing that they are actually going to be able to deliver anything of value including getting BIG names on board to keep the thing floating long enough for you to make money.

Sure, you are right that you might be able to make money, and the whole thing will not crash on you before hand.  Perhaps?  Perhaps?  In the end, it is your choice regarding how much of your value to allocate to such projects, how much time and money to invest into it, and if you believe in what seems to be a continuously shifting narrative that hardly makes any sense to me.  Actually, they have had a few upgrades that were going to come to ethereum that have been rescheduled, so let's see if the ethereum 2.0 actually launches early in 2020 as seems to be the currently anticipated rescheduled date for launch.  Going to fix ethereum?  Maybe?  Will the price go up and get pumped?  Maybe?  Let's see?  

Funny that one of your initial posts describing bitcoin seemed to have at least some decent understanding of bitcoin, but you seem to be drinking the koolaide that either ethereum is the same thing as bitcoin, bitcoin is deficient or ethereum is bitcoin 2.0 or some of the other nonsense pump talking points about various investors in ethereum and its supposedly offering something of value, apart from its seeming to lack of a clear monetary policy, but that does not matter, does it? 

I understand that if you believe that ethereum and bitcoin are kind of similar, then that could rationalize why you would put money into ethereum rather than bitcoin, but you fail to realize that ethereum mostly has value becuase of bitcoin, in other words, bitcoin is the dog that gives any value to ethereum, the tail.   

But, yeah, if you want to fantasize that the tail is wagging the dog, rather than reality, that is your choice to NOT put any value at all into bitcoin.  Would be interested to hear what kinds of percentages that you are allocating rather than arguing about the merits or lack thereof, because as long as you are putting your money where your mouth is then it should not really matter whether you are right or I am right because over time, the value should come through the appreciation of your investment, no?  Isn't this thread about investment strategies, and perhaps how to allocate or take protective measures rather than trying to argue the value of one investment over another?  Those are personal choices, and so there can be more prudent ideas just in regard to allocation, and guys can still profit a lot from a variety of scenarios if they set up their allocations in ways that are prudent, at least prudent in terms of their own finances, cashflow, other investments, timeline, risk tolerance, views of the various assets, and skills and time that can be dedicated to investing (whether active or passive).
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#30
(07-21-2019, 03:21 AM)JayJuanGee Wrote: I am not going to waste my time providing you any further facts, logic or my various conclusions in the direction that I already asserted.  

I stand by my previous assertions, and if you are comfortable about the solidness of ethereum's various projects, or the soundness of the money supply or the fact that there is not a pattern of behavior regarding locking up ethereum and lack of transparencies in that direction, then all  the power to you about believing that they are actually going to be able to deliver anything of value including getting BIG names on board to keep the thing floating long enough for you to make money.

...

Then it's pretty hard to take you serious, mate...

If you think Ethereum is a 'BIG ASS distraction', and if you're not willing to explain what you mean when pressed on your reasons -- then it looks like we've reached an impasse. Seeing that you're not willing to 'provide further facts or logic' when all you've made are assertions, I don't see why I or anyone else should agree with your take as anything more than pseudo-eloquent rambling.

It would’ve been great if you would’ve answered my question in good faith:
  • How and where do smart contracts ‘lock up value’? What does this mean and how does it effect the viability of Ethereum even if there are poorly written smart contracts?
And also:
  • Why would companies like Samsung, BBVA, Society Generale, Microsoft, Google, etc. utilize and build tools on top of something that is so obviously a ‘Ponzi scheme’ and ’smoke and mirrors’? What do you know that they don’t?
Like I said, I still don’t think you understand the subject very well, and your meandering response away from my question did nothing to invalidate that. edit: There are indeed a lot of concerns and valid criticisms against Ethereum, I'm aware of many of them and willing to discuss them elsewhere. However you're not making them here.

Anyways, probably best we get back to talking about conventional investments (stocks, bonds, etc) here.
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#31
(07-21-2019, 04:12 PM)billydingdong Wrote:
(07-21-2019, 03:21 AM)JayJuanGee Wrote: I am not going to waste my time providing you any further facts, logic or my various conclusions in the direction that I already asserted.  

I stand by my previous assertions, and if you are comfortable about the solidness of ethereum's various projects, or the soundness of the money supply or the fact that there is not a pattern of behavior regarding locking up ethereum and lack of transparencies in that direction, then all  the power to you about believing that they are actually going to be able to deliver anything of value including getting BIG names on board to keep the thing floating long enough for you to make money.

...

Then it's pretty hard to take you serious, mate...

Your decision about whether to take me serious or not remains your choice.

I believe that I already gave you decent reasons why I am not going to go into detail about your decision to invest in ethereum. That is your choice. I am going to try to take you seriously, until you might start getting too annoying by trying to get me to argue with you about something that you love... so go ahead, invest in ethereum... that's your choice. Why do we need to get into too many details about our perceptions of merits or lack thereof, we already made our points, and this thread is not even about attempting to justify specific investment choices, right?


(07-21-2019, 04:12 PM)billydingdong Wrote: If you think Ethereum is a 'BIG ASS distraction', and if you're not willing to explain what you mean when pressed on your reasons -- then it looks like we've reached an impasse.

Exactly... so it should be a good reason to move on. If you take the matter to the crypto thread or create an ethereum thread, I would likely not participate, because I could give two shits, so I doubt that there is any reason for me to further elaborate on as much as I am interested in exploring your area of interest of ethereum, so there are likely other like minded folks out there with whom you can commiserate about the topic and the likely direction of that cluster-fuck of a mess that you believe is a worth-while investment.

(07-21-2019, 04:12 PM)billydingdong Wrote: Seeing that you're not willing to 'provide further facts or logic', I don't see why I or anyone else should agree with your take as anything more than pseudo-eloquent ramblings.

You don't need to agree with me. I don't care. There are a decent amount of people who do agree with me, but why would it matter very much? I made my points already, but you want to dwell on the points that I have not made or that I fail or refuse to make.

(07-21-2019, 04:12 PM)billydingdong Wrote: It would’ve been great if you would’ve answered my question  in good faith:
  1. How and where do smart contracts ‘lock up value’? What does this mean and how does it effect the viability of Ethereum even if there?

Whether the practice of locking up ethereum is wide-spread or not, you are going to deny that projects on ethereum do not have lock in periods? Whatever, I don't care to go look up and attempt to quantify the statement, so if I happen to be wrong about the extent of the practice, then so what? I am not purposefully attempting to spread information. If you deny that there are locking up going on, then good enough for me. I am still not going to go research further because there are a sufficiently large number of reasons in my own thinking about why ethereum is a bunch of smoke and mirrors and failure to deliver promises, etc. coupled by a bunch of wishful get rich quick 14 year olds who are likely to result in a lot of disasters, so good luck investing in that crap.. you could get many more years of pumps based on network effects, which I will concede some of ethereum's network effects have brought some value to the whole ponzi scheme smoke and mirrors disasters waiting to happen.

(07-21-2019, 04:12 PM)billydingdong Wrote: And also:

  • Why would companies like Samsung, BBVA, Society Generale, Microsoft, Google, etc. utilize and build tools on top of something that is so obviously a ‘Ponzi scheme’ and ’smoke and mirrors’? What do you know that they don’t?

  • Merely because some BIG companies are building on ethereum does not mean that they are building on a solid foundation, but surely they could help for the charade to play out longer and take many more years before the house of cards falls.. .because there are additional dumbasses trying to prop up the cards with toothpicks.


    (07-21-2019, 04:12 PM)billydingdong Wrote: Like I said, I still don’t think you understand the subject very well, and your meandering response away from my question did nothing to invalidate that.

    I don't claim to be an expert on ethereum, so maybe your insightfulness and your access to information that I do not know is going to make your investment pay off greater than what I would have predicted. That's good for you, and could be an opportunity cost for me. You believe in it, so why would it matter what I think beyond just rebutting or attempting to rebut what I said, which you seem to have sufficiently did or tried or at least in your thinking, so should not matter too much more about how much information I don't have to back up my assertions beyond what I already provided, right?


    (07-21-2019, 04:12 PM)billydingdong Wrote: Anyways, probably best we get back to talking about conventional investments (stocks, bonds, etc) here.

    Sounds good. You still did not discuss your allocations of your portfolio in terms of ethereum, or the way that you might plan to address various risks with ethereum, to the extent that you perceive them. Seems that allocations and decisions about apportioning risks seems more relevant than whether any particular guy believes in the fundamentals of an asset. There should always be some considerations about plans to accumulate an asset to the allocation that guys believe are appropriate to their own circumstances, ways to study and account for changing circumstances that might cause tweaking of plans, and thoughts on circumstances that might cause liquidation of some or all of the investment.
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    #32
    JayJuanGee Wrote:You don't need to agree with me. I don't care. There are a decent amount of people who do agree with me, but why would it matter very much? I made my points already, but you want to dwell on the points that I have not made or that I fail or refuse to make.

    My response in the Crypto Thread:
    https://www.swooptheworld.com/forum/show...7#pid13587

    ---------------

    Getting back on topic..

    As to personal investment, I won't go into too many details but I have my portfolio divided into a (1) permanent portfolio (long-term and stable) and (2) variable portfolio (hunches and speculation).

    I got this idea from Harry Browne's book Fail-safe Investing.

    The permanent portfolio has an asset allocation of:
    • total US stock market index
    • long-term US treasuries
    • gold,
    • REITs index (very small allocation)
    • cash (t-bill etf) 
    It's the primary basis of my wealth, and it's my disciplined approach that has low historic volatility and a decent return profile. It also is a sort of guard-rail so that I don't do anything erratic the next time the stock market loses a 1/3 of its value. I hope to talk more about this in another post.

    The variable portfolio is stocks + other investments I want to wager on or trade. Crypto makes up a large portion of my variable portfolio, and most of the crypto is in  ETH, but also some Litecoin, Monero, and Zcash. Keep in mind that I see crypto as speculative at this point - it's an emerging asset class and it's not clear at all to me who the long-term winners and losers are going to be. I also have/had data center REITs, senior housing REITS, mortgage REITs, emerging market ETFs, tech stocks, etc.
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    #33
    Great thread --- personally I am in a phase of my career where I'm doing less consulting work (= earning less) and spending more on my fledgling online businesses.

    Therefore, my net worth has been trending slightly negatively for the last year or so.

    While I still maximally invest in my tax advantaged accounts each year (and have that money in various index funds + near-monopoly tech stocks), the rest of my money is sitting in a ~2.2% interest bearing savings account.

    All told, I've probably got 2-3 years of living expenses in the savings account rather than in the market.

    While this seems like a lot, is it? My worst-case scenario would be needing to sell investments during a downturn to pay for my life/business expenses. Is 2-3 years cash in the bank overdoing it? If so, how much would you keep "in cash" versus invested?
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    #34
    (07-28-2019, 12:43 AM)RoadTo100 Wrote: Great thread --- personally I am in a phase of my career where I'm doing less consulting work (= earning less) and spending more on my fledgling online businesses.

    Therefore, my net worth has been trending slightly negatively for the last year or so.

    While I still maximally invest in my tax advantaged accounts each year (and have that money in various index funds + near-monopoly tech stocks), the rest of my money is sitting in a ~2.2% interest bearing savings account.

    All told, I've probably got 2-3 years of living expenses in the savings account rather than in the market.

    While this seems like a lot, is it? My worst-case scenario would be needing to sell investments during a downturn to pay for my life/business expenses. Is 2-3 years cash in the bank overdoing it? If so, how much would you keep "in cash" versus invested?

    Under normal circumstances I try to project my cashflow 6-18 months in advance, and how far I go in advance depends, in part on the certainty of my income stream and if I  have some BIG ticket item expenses that might extend out for a decent amount of time.  

    Accordingly, it  sounds to me that you are going through a period of time that justifies having a longer timeframe for certainty of cashflow, and of course, no one wants to be in a position of having to cash out of any asset that is at a time that is not of his choosing.

    You can probably only narrow down the amount of cash that you have, if you rethink the liquidity of your other assets too, and it is pretty rare that you will ever have enough confidence to know exactly which way an asset might go, but sometimes going through a reallocation will also force you to consider an update about how you feel about each of your assets and cause you to better understand if your 2-3 years of projecting your cashflow ahead is reasonable for your circumstances.

    Another thing that I do is that when I am projecting cashflow, I will project the lowest reasonable income and the highest reasonable expenses, so frequently along the way, I will end up having more money available than I had anticipated in my projection.   This will also cause me to have higher comfort in terms of investing higher portions of my cashflow with a kind of knowledge that I have already framed my matter in highly conservative ways and for worser case scenarios, so I will frequently have a decent amount of cushion here and there along the way that I am going to be able to draw from.
    Reply
    #35
    (07-28-2019, 12:43 AM)RoadTo100 Wrote: Great thread --- personally I am in a phase of my career where I'm doing less consulting work (= earning less) and spending more on my fledgling online businesses.

    Therefore, my net worth has been trending slightly negatively for the last year or so.

    While I still maximally invest in my tax advantaged accounts each year (and have that money in various index funds + near-monopoly tech stocks), the rest of my money is sitting in a ~2.2% interest bearing savings account.

    All told, I've probably got 2-3 years of living expenses in the savings account rather than in the market.

    While this seems like a lot, is it? My worst-case scenario would be needing to sell investments during a downturn to pay for my life/business expenses. Is 2-3 years cash in the bank overdoing it? If so, how much would you keep "in cash" versus invested?

    I write this as someone with skin in the game, and my take on it is this... Cash has two purposes:

    1) Cash for living expenses and major purchases. We need cash to live, and everyone should have a cash savings buffer to cover living expenses in the event of a rainy day. The common wisdom is 3 - 6 months, but personally I'm more comfortable with a year... In you case two to three years sounds like a lot, but money is personal. I would also argue that it isn't a bad idea to set some aside in the event of an anticipated outlay (new roof, newer car, knee surgery, orthodontics etc).

    This is separate from....

    2) Cash as a portfolio position. When considering that inflation erodes cash's value, cash and cash equivalents (money market funds, CDs, etc) are historical long-term losers in a portfolio. So why hold cash at all? Simple: it's value typically erodes very slowly (i.e. it's non-volatile) and can be used to purchase other assets when their prices retrace. Maintaining a target percent cash allocation (like say 20%) and being disciplined can ensure a certain amount of volatility smoothing.

    If stocks + bonds + gold increase in value to 90% of your portfolio making (your cash position 10%), then you sell the stocks + bonds + gold that have appreciated and you capture the gains. If stocks + bonds + gold decreases in value to 70% of your portfolio (making your cash position 30%), then you buy the assets that are at a relative discount.

    What is the advantage of this approach? It enforces discipline. If stocks + bonds + gold tend to go up (as the economy tilts toward prosperity and inflation) then you will be doing the first kind of rebalancing more often: selling assets for cash when they're likely at a high point. When stocks + bonds + gold, go down, you will be less likely to panic and SELL EVERYTHING NOW, miss out on future appreciation, and you can reap the benefit of a buying opportunity.

    Personally, I prefer to target 20% as a baseline cash allocation with rebalancing bands triggered at 15% and 25%. I may miss out on some gains in a bull market, but the ride down when the market takes a shit is a lot softer, it's a buying opportunity, and most importantly I won't be tempted to take the loser's bet of trying to time the market -- I remember demoralized colleagues in 2009 completely exiting the market and in hindsight that obviously was not a good decision.

    ----

    So those are my thoughts on cash. As for logistics, a high interest savings account is fine for living expenses, but for actual cash position in the portfolio, I prefer to use a cash equivalent in a brokerage account in the form of short-term treasury ETFs, since they are interest bearing, safe, and highly liquid: 

    iShares 1-3 Year Treasury Bond (SHY)
    https://www.ishares.com/us/products/2394...y-bond-etf

    Vanguard Short-Term Treasury ETF (VGSH)

    https://investor.vanguard.com/etf/profil...folio/vgsh
    Reply
    #36
    Market took a huge shit yesterday (Aug 5) with the S+P 500 plunging 3% on news of Trump tariffs and then China's currency devaluation.

    It's recovered about 1/2 of that today, but based on what I'm reading and listening to, the consensus seems to be that we're on the precipice of a bear market. The Federal Reserve also cut the fed funds rate about a week ago, the first time since 2008. Gold and treasuries, traditional safe haven assets, have been going up.

    What are y'all's strategies? Anyone revising plans with the changing economic winds?

    Mine is the same as always:

    35% US equities
    25% Long-term US treasuries
    20% cash
    15% gold
    5% REITs

    And when, anything spikes or plunges 1/3 of it's value, I'll rebalance.
    Reply
    #37
    (08-06-2019, 08:56 PM)billydingdong Wrote: Market took a huge shit yesterday (Aug 5) with the S+P 500 plunging 3% on news of Trump tariffs and then China's currency devaluation.

    It's recovered about 1/2 of that today, but based on what I'm reading and listening to, the consensus seems to be that we're on the precipice of a bear market. The Federal Reserve also cut the fed funds rate about a week ago, the first time since 2008. Gold and treasuries, traditional safe haven assets, have been going up.

    What are y'all's strategies? Anyone revising plans with the changing economic winds?

    Mine is the same as always:

    35% US equities
    25% Long-term US treasuries
    20% cash
    15% gold
    5% REITs

    And when, anything spikes or plunges 1/3 of it's value, I'll rebalance.

    Regarding the first part of your question regarding reason for the partial market rebound, of course, many times a market overreacts to some news or events such as the negative performance that seemed to have been caused by the little spat between china and the usa, including the Fed's last week's announcement to reduce interest rates, and then none of us is able to determine if the market correction is really going to be a longer term play or if it is just a fake out.

    Your strategy and your diversification seems decent, and maybe I am a bit more cocky on the inside because the last week has been good for me.  I mean the stock market went down 7% or 8%, but my BTC holdings went up a bit more than double that amount.  

    Where is your crypto (ETH assertedly from another of your posts) in your overall holdings, billydingdong?  Is ETH/Crypto less than 1% of your total holdings or is considered to be part of your cash allocation?

    I don't want to necessarily get into too many details of my total holdings, but maybe for the purposes of this post, my current overall distribution would be something like:

    20% income generating physical property

    20% 401k that has some diversification within it but largely a variety of index funds that are correlated to stock and fiat performance.

    56% bitcoin fund that is sub diversified currently about 95.5% bitcoin, 3.5% cash, 1% variety of shitcoins

    4% variety of other property that is not very liquid (most of which was part of an old business that so far I have chosen just to keep in storage, but might liquidate it at some point).

    Before 2014, I used to reallocate the 401k from time to time, but I have not been adding to that since 2014. Since late 2013, my BTC has served as a kind of reallocation of some of my total holdings into something that I thought might not be correlated to the dollar (kind of a gold substitute), but I have not really felt any need to reallocate since, but just to attempt to manage my BTC.  

    Of course, many guys might consider my BTC part to be a bit reckless,  but in about 2016, I had come to a tentative conclusion that I don't really need to engage in any more reallocating of my BTC than is contained within the fund and just how it frees off the pressures from my other assets that are largely sufficient to maintain me, if need be.  

    In other words, between 2013 and 2015, I had a goal to build up the BTC portion of my portfolio to around 10%, but the ongoing suppression of the BTC market during that time caused me to allocate close to 14%, which ended up being an o.k. decision, but admittedly it was a bit beyond my original intention, yet its relative value mostly just grew from late 2015 to its current status.  

    From time to time, I do come back to reflect on whether I need to consider any need to reallocate my BTC, but I don't really see any need to reallocate it or even to really react too much to current market conditions (or even BTC's 85% correction in 2018) because there may be some non-correlation going on, or even anti-correlation... It surely is not clear with any seemingly new asset class, and surely time will tell, so in that regard, I consider that the BTC portion will probably hold its own for a large number of years into the future.
    Reply
    #38
    (08-07-2019, 12:18 AM)JayJuanGee Wrote: Your strategy and your diversification seems decent, and maybe I am a bit more cocky on the inside because the last week has been good for me.  I mean the stock market went down 7% or 8%, but my BTC holdings went up a bit more than double that amount.  

    Where is your crypto (ETH assertedly from another of your posts) in your overall holdings, billydingdong?  Is ETH/Crypto less than 1% of your total holdings or is considered to be part of your cash allocation?

    ...


    As of now, my variable portfolio is about 3% of my total invested assets. I'm at a point where I have too much to lose and crypto is far too speculative for me at this point to give it a greater allocation. No way in hell I'd go 50% crypto in my portfolio, I don't have the stomach for that kind of volatility! Funny now that I have something to lose, my risk tolerance is a lot less these days.

    I differentiate my variable portfolio (all crypto at this point) from my permanent portfolio (listed above). I've had a lot of good luck with trades in the past, but it's been just that -- luck.
    Reply
    #39
    (08-07-2019, 07:52 PM)billydingdong Wrote:
    (08-07-2019, 12:18 AM)JayJuanGee Wrote: Your strategy and your diversification seems decent, and maybe I am a bit more cocky on the inside because the last week has been good for me.  I mean the stock market went down 7% or 8%, but my BTC holdings went up a bit more than double that amount.  

    Where is your crypto (ETH assertedly from another of your posts) in your overall holdings, billydingdong?  Is ETH/Crypto less than 1% of your total holdings or is considered to be part of your cash allocation?

    ...


    As of now, my variable portfolio is about 3% of my total invested assets. I'm at a point where I have too much to lose and crypto is far too speculative for me at this point to give it a greater allocation. No way in hell I'd go 50% crypto in my portfolio, I don't have the stomach for that kind of volatility! Funny now that I have something to lose, my risk tolerance is a lot less these days.

    I differentiate my variable portfolio (all crypto at this point) from my permanent portfolio (listed above). I've had a lot of good luck with trades in the past, but it's been just that -- luck.

    Fair enough.  Since I had estimated that maybe you were only in the 1% territory, it is interesting to hear that you are a bit more than I had expected with your about 3%.  Of course, depending at what stage of your investments are, you may be in a very accumulation stage or get into what is feeling more like a maintenance stage.

    Like I mentioned with my a bit more than 50% allocation into bitcoin, that came almost completely through BTC price appreciation rather than purposeful investment, and I provided my reasons for choosing not to reallocate, which largely remains that the totality of my non-bitcoin investments have largely been appreciating in approximately a range of performance that I have expected since I started into bitcoin in 2013, so therefore, and incidental reallocation that I have done has been largely just playing around rather than making any kind of significant dent... and really I could completely live decently off of the totality of my non-bitcoin investments and any kind of income that is generated through them, so therefor my bitcoin investment remains a kind of icing on the cake with my own developed strategies within to play around with it in terms of selling small amount of it as the price goes up and using that money to buy back as the price goes down, so that seems to have become a sufficient amount of feelings of downside insurance for me, even when we did this most recent 85% price correction from $19,666 to $3,122, I still felt that I had enough ongoing cushion to HODL down to $1k or even lower, and to keep buying in small increments on the way down, if that would have happened..  

    I have suggested several times that I believe that a 1% to 10% investment in bitcoin would be a good and prudent move for any guy, and of course, even if guys agree with the conclusion to invest 1% to 10% in bitcoin, guys are likely going to want to come to differing conclusions with the prudence of in that range, too, and also second-guessing about whether they believe that there is something "better than" bitcoin, and surely I would not recommend anything more than 1% in any crypto other than bitcoin, such as what you seem to have 3% in ethereum, which is surely beyond anything that I would recommend.. but also surely within your discretion what to do and how to do it.

    Of course, if any guy feels that he either has some specialized knowledge or some willingness to watch some non-bitcoin portion of his crypto investment closely, then the guy also has the discretion to do whatever he wants in terms of his allocations of value in non-bitcoin cryptos.

    By the way, I do anticipate keeping some kind of plan in bitcoin for at least 5 years, and of course, I am not exempt from either changing my mind or whatever, because surely I am not locked in, even if I have an already existing plan for decently long term of largely keeping the essence of my same plan that has been working pretty well and seems to have decent odds of continuing to work.

    (08-07-2019, 08:23 PM)JayJuanGee Wrote:
    (08-07-2019, 07:52 PM)billydingdong Wrote:
    (08-07-2019, 12:18 AM)JayJuanGee Wrote: Your strategy and your diversification seems decent, and maybe I am a bit more cocky on the inside because the last week has been good for me.  I mean the stock market went down 7% or 8%, but my BTC holdings went up a bit more than double that amount.  

    Where is your crypto (ETH assertedly from another of your posts) in your overall holdings, billydingdong?  Is ETH/Crypto less than 1% of your total holdings or is considered to be part of your cash allocation?

    ...


    As of now, my variable portfolio is about 3% of my total invested assets. I'm at a point where I have too much to lose and crypto is far too speculative for me at this point to give it a greater allocation. No way in hell I'd go 50% crypto in my portfolio, I don't have the stomach for that kind of volatility! Funny now that I have something to lose, my risk tolerance is a lot less these days.

    I differentiate my variable portfolio (all crypto at this point) from my permanent portfolio (listed above). I've had a lot of good luck with trades in the past, but it's been just that -- luck.

    Fair enough.  Since I had estimated that maybe you were only in the 1% territory, it is interesting to hear that you are a bit more than I had expected with your about 3%.  Of course, depending at what stage of your investments are, you may be in a very accumulation stage or get into what is feeling more like a maintenance stage.

    Like I mentioned with my a bit more than 50% allocation into bitcoin, that came almost completely through BTC price appreciation rather than purposeful investment (my  purposeful investment ended up becoming about 14% by the end of 2015 rather than my original intention to invest 10% into bitcoin), and I provided my reasons for choosing not to reallocate, which largely remains that the totality of my non-bitcoin investments have largely been appreciating in approximately a range of performance that I have expected since I started into bitcoin in 2013, so therefore, and incidental reallocation that I have done has been largely just playing around rather than making any kind of significant dent... and really I could completely live decently off of the totality of my non-bitcoin investments and any kind of income that is generated through them, so therefor my bitcoin investment remains a kind of icing on the cake with my own developed strategies within to play around with it in terms of selling small amount of it as the price goes up and using that money to buy back as the price goes down, so that seems to have become a sufficient amount of feelings of downside insurance for me, even when we did this most recent 85% price correction from $19,666 to $3,122, I still felt that I had enough ongoing cushion to HODL down to $1k or even lower, and to keep buying in small increments on the way down, if that would have happened..  

    I have suggested several times that I believe that a 1% to 10% investment in bitcoin would be a good and prudent move for any guy, and of course, even if guys agree with the conclusion to invest 1% to 10% in bitcoin, guys are likely going to want to come to differing conclusions with the prudence of in that range, too, and also second-guessing about whether they believe that there is something "better than" bitcoin, and surely I would not recommend anything more than 1% in any crypto other than bitcoin, such as what you seem to have 3% in ethereum, which is surely beyond anything that I would recommend.. but also surely within your discretion what to do and how to do it.

    Of course, if any guy feels that he either has some specialized knowledge or some willingness to watch some non-bitcoin portion of his crypto investment closely, then the guy also has the discretion to do whatever he wants in terms of his allocations of value in non-bitcoin cryptos.

    By the way, I do anticipate keeping some kind of plan in bitcoin for at least 5 years, and of course, I am not exempt from either changing my mind or whatever, because surely I am not locked in, even if I have an already existing plan for decently long term of largely keeping the essence of my same plan that has been working pretty well and seems to have decent odds of continuing to work.
    Reply
    #40
    After a volatile month in the financial markets, gold and treasuries are up big.

    Bitcoin not responding as 'store of value' at this moment in time. Maybe that changes as the year rolls on.

    Here are some 1 month charts of total stock market, bitcoin, gold and long-term treasuries.

    Total stock market

    [Image: ADS6LNC.jpg]

    Gold

    [Image: mKch5xi.jpg]

    Long-term Treasuries

    [Image: TXXHE0B.jpg]

    Bitcoin

    [Image: Ux5AFoE.jpg]
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