Investment discussion

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Re: Investment discussion

Postby Marcuse » Fri Dec 22, 2017 10:10 pm

satan_n_stuff wrote:
Marcuse wrote:http://www.bbc.co.uk/news/business-42457983

Bitcoin has lost a third of its value. Pop.

Is anyone at all surprised by this?


We did have a discussion in discord where an argument was made (by whom I won't say because I don't like dragging people into discussions they don't choose to engage in) that Bitcoin would simply continue to appreciate in value because demand would continue to increase.
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Re: Investment discussion

Postby Grimstone » Sat Dec 23, 2017 1:28 am

Bitcoin will indefinitely appreciate in a sense because only so many will ever be 'mined' and as time goes on more and more bitcoin will permanently fall out of circulation. IMO this is a bad quality for a currency to have since who would want to spend money that continually appreciates in value(or in this case scarcity)? Without any regulating body I think it will always be a volatile and unstable currency.
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Re: Investment discussion

Postby BROWNRECLUSE » Sat Dec 23, 2017 2:41 am

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Re: Investment discussion

Postby cmsellers » Sat Dec 23, 2017 2:42 am

Bitcoin seems to me analogous to gold. Because the human population continues to grow faster than the supply, the long-term trend is up. However it's so incredibly volatile that it doesn't make sense to invest in except long-term, and if you're going to invest long term there are other options which offer a better rate of return with less uncertaintly.

Grimstone wrote:Without any regulating body I think it will always be a volatile and unstable currency.

Spoken like someone who has never tried to hire a hitman over the internet.
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Re: Investment discussion

Postby Grimstone » Sat Dec 23, 2017 4:00 am

Except gold's value isn't purely speculative but also realized through an actual demand/purpose.
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Re: Investment discussion

Postby cmsellers » Sat Dec 23, 2017 5:04 am

Grimstone wrote:Except gold's value isn't purely speculative but also realized through an actual demand/purpose.

There's an actual demand/purpose for cryptocurrencies. It's the same source of demand as the dark web: criminals and the paranoid.
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Re: Investment discussion

Postby Grimstone » Sat Dec 23, 2017 5:15 am

Perhaps, but what percentage do they account for? I'd guess that they're in the extreme minority and that whatever the number really is it will only get smaller the more mainstream bitcoin becomes.
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Re: Investment discussion

Postby satan_n_stuff » Sat Dec 23, 2017 11:14 am

Marcuse wrote:
satan_n_stuff wrote:
Marcuse wrote:http://www.bbc.co.uk/news/business-42457983

Bitcoin has lost a third of its value. Pop.

Is anyone at all surprised by this?


We did have a discussion in discord where an argument was made (by whom I won't say because I don't like dragging people into discussions they don't choose to engage in) that Bitcoin would simply continue to appreciate in value because demand would continue to increase.

In the long run it probably will, but there's literally no way this was going to be anything other than a bubble. Things don't suddenly increase in value by an order of magnitude without an identifiable reason, the reason in this case being speculation.
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Re: Investment discussion

Postby Windy » Sun Dec 24, 2017 2:30 am

It might have popped but the price is still higher than it was a month ago, and much higher than it was at the start of the year.
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Re: Investment discussion

Postby selena81 » Tue Dec 26, 2017 1:26 am

Marcuse wrote:
satan_n_stuff wrote:
Marcuse wrote:http://www.bbc.co.uk/news/business-42457983

Bitcoin has lost a third of its value. Pop.

Is anyone at all surprised by this?


We did have a discussion in discord where an argument was made (by whom I won't say because I don't like dragging people into discussions they don't choose to engage in) that Bitcoin would simply continue to appreciate in value because demand would continue to increase.


One of the biggest misconceptions about scarcity is 'buy now, any object can only increase in value as copies get lost (antique vases break) while the total market grows (by account of growing world population)'. But this has proven untrue for stuff like stamps or starwars toys: the price for those rare items has fallen with more then 50% in the last decade as demand lapsed. Only your grandpa collects stamps anymore, and starwars was only insanely expensive when the prequel trilogy was overhyped.

I recall a study of centuries-old houses in Amsterdam that showed that in the very long run their price pretty much moved with inflation. Which goes to show that you shouldn't get obsessed with the whole 'compound interest makes you rich if you have 50 years patience' idea: you can only expect to 'let your money work for you' if you live in a society that pays much more for money then for labor (which was true in the 19th century, but not in times of quantitative easing: money is no longer a limiting factor in production).

As to bitcoin: it has a market with criminals and with people in countries that have high costs of banking. The first will change as law-enforcement gets a grip, the latter will change as low-cost internet-based banks make their way across the globe.


As to long-term investing:
Some ideas from an actuary (not that you should take their word as gospel):
buy risky stuff in your 20s and 30s, in order to get the most out of the market risk premiums. If you get very lucky you may enjoy early retirement, if you are very unlucky there is still enough time to make up for the difference (especially if you expect some salary-increases in your future).
switch to safer bets as you get closer to retirement, you don't want to be the guy that loses his entire pension in the next 'dotcom crash' and needs to keep on working

It doesn't really matter where you invest, be it stocks or bonds or real estate or gold or emerging markets or whatever. Look for low maintenance costs of your portfolio, and make sure you diversify your economic interests as much as possible (never invest in your own employer!)

rule of thumb: in order to get an inflation-adjusted pension you need to save 20% of your gross income during your entire working life (which is generally considered unreasonably much, so instead you can f.i. buy a house and pay of the mortgage so you can live cheap)
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Re: Investment discussion

Postby Cobra-D » Mon Feb 05, 2018 4:40 pm

Looks like bitcoin crashed hard recently and other big cryptocurrencies as well. This of course hit me very hard seeing how I had a lot in bitcoin cash, sadly I'm down to a dollar from the 5 dollars I had in it
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Re: Investment discussion

Postby Absentia » Mon Feb 05, 2018 5:16 pm

It's down almost 10% already today. Headline: Obvious Speculative Bubble Bursts
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Re: Investment discussion

Postby IamNotCreepy » Mon Feb 05, 2018 10:12 pm

So it's not just cryptocurrencies tanking today. At one point, the Dow was done about 1600 points, but has bounced back to *only* being down about 1200 points, or 4.6% as of market close.

I think a recession is on its way.
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Re: Investment discussion

Postby JamishT » Tue Feb 06, 2018 12:02 am

IamNotCreepy wrote:So it's not just cryptocurrencies tanking today. At one point, the Dow was done about 1600 points, but has bounced back to *only* being down about 1200 points, or 4.6% as of market close.

I think a recession is on its way.


Ehhhhhhhh. At the bottom of the big recession, the Dow was somewhere around 9000, and even with the drop today it's above 20,000. Markets go up and down, and also the markets are not the economy. Is it possible that we are heading into a sustained recession? Sure, it's possible, but I think it's far too early to say that definitively.
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Re: Investment discussion

Postby Windy » Tue Feb 06, 2018 12:14 am

tfw you lose a million dollars in a week
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