The Stock Market, Investments, and Investing Thread
#45
(08-15-2019, 11:53 PM)billydingdong Wrote:
(08-15-2019, 08:24 PM)JayJuanGee Wrote: [edited out]

[1] Not really. I think it's alright and better than most cryptos, especially in the short-term to next 3 or so years. But I still think it's pretty risky,

Fair clarification, and I largely agree with this, except that I have my doubts about whether a BTC bull market would be able to persist for 3 years, without some kind of meaningful correction - but I am kind of modeling on a kind of fractal representation of earlier BTC price performance bubbles, which have tended to get a bit out of control towards the upside and results in downwards violence, too. Sure it is possible that such upwards exponential price growth could get drug out towards a three year timeline, but the current evidence seems to be supporting a tentative thesis that upwards BTC price runs might be front run, rather than longer term manipulated downwardly first.. which would be the 3 year scenario.... I am not really wedded to a shorter timeline, and I understand that BTC is filled with surprises, including the fact that there could be some longer dragging out of the upcoming exponential price spurts, to the extent that they might happen.


(08-15-2019, 11:53 PM)billydingdong Wrote: and if I'm going to take on the risk, I'd rather invest in other coins that could multiply even more as the space matures and when the next hype wave comes.

I have already largely responded to that point, and surely I believe that thinking to be based on widespread erroneously framing of shitcoins as having some kind of meaningful value. Of course, you are going to continue to support such thesis for your own investment rationale, and hopefully that works out for you.

Just to repeat, one more time, for the benefit of possible clarification. I have already suggested that the performance of any of the shit coins, whether you are talking about ethereum or some other shit coin is largely already correlated to the successful performance of bitcoin, so their mere success would fail if bitcoin does not succeed. Of course, since, overall, they have lower market caps, and they already are partly built upon a culture of pumping crapola, it is quite reasonable that any or all of them can be pumped beyond the performance of bitcoin, but personally, I am not going to allocate much if any of my resources in the direction of such pumpening or a kind of vaporware marketing hype machine, rather than substance...

In other words, I can actually understand that people are going to see the matter differently than me, and therefore, I could understand some kind of minority (even perhaps up to 30% or 40%) of a portfolio put into various shit coins that a guy assesses as potentially profitable, but I would think that anything beyond 10% or 15% is a bit reckless.

(08-15-2019, 11:53 PM)billydingdong Wrote: [2] Where did I indicate I knew anything about the current market or where it was going...? I'm observing what's happening right now at this moment. I don't know what the hell is going to happen.

Fair enough that I may have been largely responding to your seemingly quasi-subconscious dig at bitcoin, and a kind of gloating of Gold's mediocre performance that has been getting a lot of recent press. I still would like to know the meaning of such, and I have heard a lot of people elated by gold's recent performance, which still remains somewhat problematic with some tensions between paper representations and physical representations, so I don't know what happens when push comes to shove and the manipulation is attempted, but few people still hold the physical gold, and even if they do, their physical gold remains highly manipulated by paper representations, in part due to their cumbersome abilities to actually demand and to get physical possession - which is also highly impractical, especially relative to the new world of digital scarcity that more and more of us are learning about recently through bitcoin.

(08-15-2019, 11:53 PM)billydingdong Wrote: I also won't tell anyone what to do -- everyone has to decide that on their own based on their own risk tolerance. For some one who took a lot of risk with their company and sold it for a lot and needs to put kids through school, short-term bonds may be okay. For someone with a steady job and a steady income, maybe a little more risk with equities and crypto is alright. For someone with a lot of capital or a windfall, maybe more real estate or a hedge fund.

You seem to be fighting the hypothetical. The hypothetical already assumes a $12k investment budget over the next 6 months with $6k available to invest immediately. Of course, personal circumstances are going to vary including risk tolerance and even views of the various asset classes, and even timeline for investing, but I think that I even allowed for at least a 2 year timeline in my hypothetical, so I would think that you should be able to come up with some kind of reasonable investment strategy for such a person, and even plugging in your own views of risk tolerance and views on the various asset classes - any person would need to plug in their own views after seeing how you might suggest to approach such a hypothetical budget.


(08-15-2019, 11:53 PM)billydingdong Wrote: Life circumstances and risk tolerance are highly individual. Personally, I wouldn't want to stomach a 40% drop in my overall portfolio, but in 2008, many did and they've been rewarded handsomely since.

Well you could easily factor those kinds of expectations into your budget. You are already doing something, so why not just describe what you are doing and how to plug $12k into that? Should not be that difficult, even including some concern that maybe guys, including yourself, might choose to keep some of it in cash.

(08-15-2019, 11:53 PM)billydingdong Wrote: For that reason, it's helped me to draw a line in the sand and distinguish between 2 portfolios: my permanent portfolio and variable portfolio.

My permanent portfolio is my long-term investment strategy. My variable portfolio is short term and medium term plays. Currently my variable portfolio is a little more than 3% of total value w/ Ethereum being around 70% of that 3% portion. I also have some other cryptos in there that I'm less optimistic about.

Permanent portfolio allocations as I've mentioned are:

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


You are saying that your permanent portfolio is about 97% and your variable portfolio is 3%?

Then with a $12k budget, you would be suggesting that a guy just invests the $6k right away in the proportions that you are invested, and every month invest $1k more in the allocations of your portfolio, no?

(08-15-2019, 11:53 PM)billydingdong Wrote: My reasoning is simple: Equities + REITS for times of prosperity, treasuries for times of recession, gold + REITs for times of inflation, and cash (equivalents) for times of deflation when the other assets go on sale. Historically the economy tilts toward inflation + prosperity, so I want to weigh toward equities.

And therefore, you are anticipating a longer than 2 year timeline of staying invested in your allocations, and perhaps reallocating on a regular basis, annually? or based on significant changes in the percentages, due to relative performance ?


(08-15-2019, 11:53 PM)billydingdong Wrote: Performance-wise since the 70's, this portfolio has slightly lower returns, but much lower volatility and drawdown than the standard 60% equities / 40% bonds. Also worth mentioning that my goal is preservation and modest growth... I don't need to take on more risk by going 100% equities.

I don't really disagree with your allocations, but maybe just your variable portion and its direction towards, mostly ethereum. I doubt that you have been investing since the 70s.

Hey I started investing in the 80s, but it took me almost until the early 2000s before I had enough value to really consider my allocations and reallocations to attempt to have more stability, but then I did attempt to mostly invest into stock index funds, too (which you consider as equities).

(08-15-2019, 11:53 PM)billydingdong Wrote: But these things are personal and to each their own. It's tough not to get FOMO in a bull market like in 2017 and the first half of this year, but it's times like now where I'm thankful I've diversified in the way that I have.

I believe that anyone is less likely to fomo if they have actually thought out their plan and just to stick with it. Surely, sometimes guys could take some time to reassess and even take from a portion of their total investments in order to invest in a direction that is different from their historical investments, but of course, it is much better to attempt to accomplish such strategizing around a reinvestment plan during periods in which you are NOT emotional or FOMO-ing, and sometimes if a guy's plan is well thought out, then it could take 5 years or more for the plan to either settle or to start to show pay off.

For example, when I got into bitcoin in late 2013, I had already pretty much established the totality of my investments, and I had never had gold in my investment, therefore, I saw bitcoin as a kind of gold substitute. So I took from the overall percentages of all of my investments and largely aimed towards allocating 10% towards bitcoin, and that took me about a year to accomplish. So my point is that any time that a new asset class or a new way of considering an investment portfolio is entertained, it could take a while to diversify out of the current status and into the new status, and I surely would consider that as a means to lessen feelings of FOMO-ing.

By the way, with my BTC investment, it took me several years to battle my urges towards FOMO-ing, so I had some of those kinds of feelings that caused me to screw up my plan on a couple of occasions, and then I did force myself to go back to my plan and to attempt to learn from my mistakes regarding getting emotional. Another thing that helps emotions, is if the investment wildly exceeds expectations, so in that regard, the amount of equity that gets built up, can also contribute to a kind of settling down of FOMO-ing inclinations.

(08-15-2019, 11:53 PM)billydingdong Wrote: [3] At this point I consider all the cryptos to be pretty damn risky even though I'm obviously bullish on the space as a whole. If I were advising my brother who  is in a similar situation as me and if he wanted to get into crypto, I would tell him to buy some mix of Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Monero, EOS, Cardano, Binance Coin,  Chainlink, and Quantum with a heavier weighting on Bitcoin and Ethereum.

Even though I differ a bit in regards to your thinking about throwing so much out there, because that level of diversification does not seem to be necessary. Usually, diversification is among differing asset classes rather than within likely correlated asset classes, but hey whatever, if you are erroneously considering those other coins NOT to be already correlated to bitcoin, then so be it. I suppose that I could agree with something that would be 80% bitcoin, 10% ethereum and 10% remainder of shitcoins (or some variation of that), but I am kind of cringing at myself for even writing it - even while I know that guys are going to end up doing something like that anyhow, so at least if I put some kind of qualification on it, I am not really recommending it, but I am saying that I could understand how something like that might be somewhat within reasonable long term thinking, perhaps.

(08-15-2019, 11:53 PM)billydingdong Wrote: For me, I'm willing to take on the risk of individual projects since my  permanent portfolio is pretty conservative.

Actually, that part makes sense, especially if you are attempting to make some active engagements with the space, too, and if you feel some kind of joy, excitement or interest in studying certain projects - while recognizing some potential value in them for some kind of technical contributions that they could possibly end up making - so long, as well, that you are not losing sight of some of the BIG picture contributions of the one who actually brought you and your shit coin buddies to the dance - and that security model of king daddy has no way been undermined by the existence of a bunch of projects that put out a series of marketing efforts in which part of their success seems to be reliant upon some kind of supposed or exaggerated (and perhaps non-existent) defects in bitcoin.
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RE: The Stock Market, Investments, and Investing Thread - by JayJuanGee - 08-16-2019, 01:00 AM

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