Cryptocurrencies

[rkbabang]

  If someone offers you a gamble- put $1k with a 50% chance of winning $1mm and a 50% chance of losing the $1k, if you don't take the bet then you can claim Warren Buffett disciple status but you'll still be an idiot.

 

Gold's market cap ($7tn) is a simple proxy for a non-sovereign depreciation and censorship resistant store of value.  Should bitcoin be worth $1tn, $3tn, $5tn, $7tn - I don't know.  You don't need a scale to know a man is fat.

 

The problem with this reasoning is that you can:

 

A. Attach it to anything

B. It has no upper or lower bounds.

 

Which is how speculative bubbles start and end. Under this reasoning, there’s almost no upper limit to pay for bitcoin - and no way to even determine a price that makes sense or not.

 

It’s easy to say “the upside is infinite and the downside is capped”, but the truth is you’re picking statistics at random. Why should there be a 50% chance of 1000-1 odds on bitcoin? How do you know it’s not a 1% chance of 10-1 odds - how would you do this in a rigorous way?

 

It seems too easy to fool yourself with these number games.

 

As we're the idiots on probalility, and have material expertise in blockchain; a few comments.

 

Ultimately investor X is forecasting an expected value, at time X, over a range of possibilites, and acting on it. If the forecast for XYZ is $7.50, after Q2 earnings are released, and investor X can buy XYZ today for $6.00; investor X should buy XYZ today and sell on the Q2 earnings release in expectation of a $1.50/share profit. Investor X could actually make more/less on the day, but expects to make $1.50.

 

The coin flip is just a simplification of the same thing; 50% x $1payoff +50% x $1loss = $0.00 EMV = unbiased coinflip. It doesn't matter how many times one flips the coin, to make a profit - we just need a payoff>cost. We just differ on how it might be achieved - tossing bones works for us  ;)

 

The premise of the Bitcoin/Gold equivalency is that Bitcoin displaces a % of the existing gold market interested in store of value. Take the $ displaced, divide by the max possible 21M Bitcoin, and there's your value. Maybe this is valid 80 years from now, but TODAY, if you need to run from your homeland - are you putting your money primarily in gold, or Bitcoin? History has repeatedly demonstrated the utility of gold, Bitcoin ... not so much.

 

SD

 

 

 

 

 

If you need to run from your homeland and take your entire net worth with you and you know there is a good chance that you may be stopped and searched at any number of borders that you will be crossing, you would be insane to take gold.

[roughlyright]

If you bought #Bitcoin

 

1 day ago: Up 14%

1 week ago: Up 41%

1 month ago: Up 61%

3 months ago: Up 222%

6 months ago: Up 240%

1 year ago: Up 108%

2 years ago: Up 400%

3 years ago: Up 1840%

4 years ago: Up 5300%

5 years ago: Up 2470%

6 years ago: Up 12800%

[DooDiligence]

If worms had machine guns, birds wouldn't fuck with them.

 

Tell me how you would have known?

[rkbabang]

How could you not have known the moment you understood what Bitcoin was?  If you don't get it yet, you will still be asking "how could you have known?" 20 or 30 years from now when people who bought under $100k are rich.

 

Oh, and you are correct about worms with machine guns. Not seeing how Bitcoin is still worth only a small fraction of what it will be worth is like knowing that worms are acquiring machine guns and not understanding that the birds are  screwed.

[Gregmal]

How could you not have known the moment you understood what Bitcoin was?  If you don't get it yet, you will still be asking "how could you have known?" 20 or 30 years from now when people who bought under $100k are rich.

 

Oh, and you are correct about worms with machine guns. Not seeing how Bitcoin is still worth only a small fraction of what it will be worth is like knowing that worms are acquiring machine guns and not understanding that the birds are  screwed.

 

Seth Klarman, one among many underperforming value investors, with a denigrating and condescending tone around his remarks, called Bitcoin a "trading sardine". In fact here is what he had to say: 

 

"There is the old story about the market craze in sardine trading when the sardines disappeared from their traditional waters in Monterey, California. The commodity traders bid them up and the price of a can of sardines soared. One day a buyer decided to treat himself to an expensive meal and actually opened a can and started eating. He immediately became ill and told the seller the sardines were no good. The seller said, 'You don't understand. These are not eating sardines, they are trading sardines.'

 

Like sardine traders, many financial-market participants are attracted to speculation, never bothering to taste the sardines they are trading. ... trading in and of itself can be exciting and, as long as the market is rising, lucrative. But essentially it is speculating, not investing. You may find a buyer at a higher price — a greater fool — or you may not, in which case you yourself are the greater fool."

 

Meanwhile, yesterday, Klarman got a life raft when Abbvie decided to acquire Allergan, a position he found to be more to his liking. Nevertheless, on his "value investment", Mr. Klarman is still said to have lost over $100M as his basis was significantly higher than the acquisition price. Prior to the acquisition, Mr. Klarman was likely down 30-40% on his AGN position.

 

What I find hilarious is the premise that "OMG DONT BUY THIS ITS SPECULATIVE, ITS FOR MORONS, ITS A MANIA, YOU MIGHT LOSE BIG!!!!", when these guys then go and end up suffering the exact fate they snidely predict others will, buying "their own" type of investments!

 

They underperform, then they need to make excuses why they are missing things. SO they disparage the people that are making money rather than say, "I didn't see that way to make money".They play the "sound and responsible fiduciary" card, but as a money manager, your job is to make money, not be a fiduciary. Give me all your money and I'll buy 30 acres and bury it in a fortified compound and have it guarded by people with AK-47's all day.. I'm not raising capital on that despite being a great fiduciary. Make money, or shut up. A good money manager is fine waiting for things, but also needs to be able to see what is working and what is not and how to capitalize on what is working. Sure there are a lot of idiots buying Bitcoin, and Tesla, and Beyond Meat. Figure out how to make money off the idiots.... Not sit there and whine and make excuses and disparage those who are actually making money...

 

[SHDL]

How could you not have known the moment you understood what Bitcoin was?  If you don't get it yet, you will still be asking "how could you have known?" 20 or 30 years from now when people who bought under $100k are rich.

 

Oh, and you are correct about worms with machine guns. Not seeing how Bitcoin is still worth only a small fraction of what it will be worth is like knowing that worms are acquiring machine guns and not understanding that the birds are  screwed.

 

Seth Klarman, one among many underperforming value investors, with a denigrating and condescending tone around his remarks, called Bitcoin a "trading sardine". In fact here is what he had to say: 

 

"There is the old story about the market craze in sardine trading when the sardines disappeared from their traditional waters in Monterey, California. The commodity traders bid them up and the price of a can of sardines soared. One day a buyer decided to treat himself to an expensive meal and actually opened a can and started eating. He immediately became ill and told the seller the sardines were no good. The seller said, 'You don't understand. These are not eating sardines, they are trading sardines.'

 

Like sardine traders, many financial-market participants are attracted to speculation, never bothering to taste the sardines they are trading. ... trading in and of itself can be exciting and, as long as the market is rising, lucrative. But essentially it is speculating, not investing. You may find a buyer at a higher price — a greater fool — or you may not, in which case you yourself are the greater fool."

 

Meanwhile, yesterday, Klarman got a life raft when Abbvie decided to acquire Allergan, a position he found to be more to his liking. Nevertheless, on his "value investment", Mr. Klarman is still said to have lost over $100M as his basis was significantly higher than the acquisition price. Prior to the acquisition, Mr. Klarman was likely down 30-40% on his AGN position.

 

What I find hilarious is the premise that "OMG DONT BUY THIS ITS SPECULATIVE, ITS FOR MORONS, ITS A MANIA, YOU MIGHT LOSE BIG!!!!", when these guys then go and end up suffering the exact fate they snidely predict others will, buying "their own" type of investments!

 

They underperform, then they need to make excuses why they are missing things. SO they disparage the people that are making money rather than say, "I didn't see that way to make money".They play the "sound and responsible fiduciary" card, but as a money manager, your job is to make money, not be a fiduciary. Give me all your money and I'll buy 30 acres and bury it in a fortified compound and have it guarded by people with AK-47's all day.. I'm not raising capital on that despite being a great fiduciary. Make money, or shut up. A good money manager is fine waiting for things, but also needs to be able to see what is working and what is not and how to capitalize on what is working. Sure there are a lot of idiots buying Bitcoin, and Tesla, and Beyond Meat. Figure out how to make money off the idiots.... Not sit there and whine and make excuses and disparage those who are actually making money...

 

You have a point; however, with professional money managers it’s probably not as simple.  Mike Burry apparently took his “just find value and make money” mandate a bit too literally and bought a huge amount of CDS on subprime mortgage bonds before anyone else in 2005.  His LPs balked, and not only that, they kept withdrawing money even as the bet was paying off like crazy.  Some (like Greenblatt) called him a liar tried to sue him.  Now if that is what happens when you make strange, exotic bets managing OPM, it’s not at all surprising that most money managers shy away from (and even criticize) them.

 

Anyway, I thought I’d mention this as I think these things tend to be a good source of market inefficiencies.

[Casey]

Every time bitcoin goes up, people act like the price suddenly got more logical and they're a genius for having their name listed on 1 slot of a magic distributed internet list.

 

Not only that - you're the fool for not wanting to pay $13,000 to take their place!

 

Let them stay on the list.

[SnarkyPuppy]

Every time bitcoin goes up, people act like the price suddenly got more logical and they're a genius for having their name listed on 1 slot of a magic distributed internet list.

 

Not only that - you're the fool for not wanting to pay $13,000 to take their place!

 

Let them stay on the list.

 

Have any more wisdom to share?

[SharperDingaan]

"They play the "sound and responsible fiduciary" card, but as a money manager, your job is to make money, not be a fiduciary. A good money manager is fine waiting for things, but also needs to be able to see what is working and what is not and how to capitalize on what is working. "

 

Like it or not, a money manager IS a fiduciary; forget that, and you will have a very short professional life.

A PM is restricted by the funds investment policy, and has little say; some policies WILL allow crypto up to X% of the portfolio, but restrict it only to Bitcoin and related derivatives, so that the PM can profit from both long AND short positions.

 

SD

 

 

[rkbabang]

Another answer to the question "Why is Bitcoin better than gold?"

 

https://www.foxnews.com/science/nasa-headed-towards-giant-golden-asteroid-that-could-make-everyone-on-earth-a-billionaire

 

And yes the author of this article has no grasp of economics if he thinks simply increasing the supply of gold could make everyone a billionaire.

 

[Spekulatius]

Another answer to the question "Why is Bitcoin better than gold?"

 

https://www.foxnews.com/science/nasa-headed-towards-giant-golden-asteroid-that-could-make-everyone-on-earth-a-billionaire

 

And yes the author of this article has no grasp of economics if he thinks simply increasing the supply of gold could make everyone a billionaire.

 

Buying bitcoin is like going long human greed, stupidity  and short crappy currencies. If you think about this, it seems like a winning strategy  :o.

 

The above is pulled from twitter, but I forgot the source.

[SharperDingaan]

Another answer to the question "Why is Bitcoin better than gold?"

 

https://www.foxnews.com/science/nasa-headed-towards-giant-golden-asteroid-that-could-make-everyone-on-earth-a-billionaire

 

And yes the author of this article has no grasp of economics if he thinks simply increasing the supply of gold could make everyone a billionaire.

 

Buying bitcoin is like going long human greed, stupidity  and short crappy currencies. If you think about this, it seems like a winning strategy  :o.

 

The above is pulled from twitter, but I forgot the source.

 

Quite agree. Snake oil pushers of sh1te coin to raise the boats of all crypto ...

and leveraged comex Bitcoin futures and options to help yourself to the panics  ;)

 

SD

 

[DooDiligence]

Comments?

 

 

Disclaimer: I don't understand the implications of this verse & am posting simply because I enjoyed the artistry & wanted to share.

 

;D