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Thread: Bitcoin frenzy

  1. #71
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    Default Re: Bitcoin frenzy

    Quote Originally Posted by Norman Bernstein
    It's not just fiat currency that is based on faith. Any commodity is also based on a certain amount of faith. If you are a farmer, with a silo full of corn, you have faith that the corn will have value, when you go to sell it... faith that it will be worth at least what it cost you to produce, plus something more, for profit. Sometimes it does... occasionally, it does not... but, by and large, that silo full of corn will retain it's value, and possibly rise in value. If history didn't show that it would, farmers wouldn't be filling those silos full of corn. So, it doesn't take all that much 'faith', to be a farmer.
    Not just commodities, anything will hold value is based on faith. And Norman is exactly right, what is that faith based on. That's what we mean with the word "intrinsic value". One of the dogmas, if you will, of value investing in stocks is that a company's intrinsic value is precisely equal to its discounted future earnings. Corn, to use Norman's example, has an intrinsic value that is common to all commodities: it value as a food, fuel, etc.
    The common mantra of gold bugs has always been: fiat money has no intrinsic value, its based only on faith. As I pointed out in post 58, I do not believe that statement is true. But it has certainly been taken up by the bitcoin aficionados. It is one of the many ironies of our time (they seem to be growing greater and greater the last few years), that the there is an overlap between those traditional gold bugs (who believed the only safe way to store wealth was in gold coins) and bitcoin investors.

    Bitcoin has ZERO/none/nada/zilch intrinsic value. That does not mean it cannot work as a speculation tool to make money (by my definition, I would call it gambling). I am not even being critical of those that do speculate with it. But they should know and accept what they are doing. jeezus sakes alive, do not risk your money without understanding the true risks. Do not fool yourself into thinking it is anything other than a gigantic scheme of trading bits. My computer has billions of bits in it right now, they are not worth much. They are worth nothing unless they are storing/calculating valuable information. Bitcoin does not do that!!!

    And make no mistake about it, you can bitch and moan all you want about our crooked banking system, but governments of the world are not going to sit idly by for long and let this go unregulated. When that happens, the whole thing could come crashing down to zero. Even if it doesn't happen, it could go to zero.

    By you guys logic, it should have made no difference to the stock price of companies like Enron and WorldCom when it was discovered there was no significant business backing their market capitalization. Guess what, they crashed to zero when the market came to its senses and realized there was no intrinsic value to those stocks. But hey, the company's could have closed their doors, laid off all employees, and stopped all business, and there was no reason that their existing stock could not have kept being traded and made money. Heck, there was no company to issue new stock, if anything the stock value should have gone up when the company closed its doors. Of course that is absurd....

  2. #72
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    Default Re: Bitcoin frenzy

    Norman, have you seen this? Bitcoin to a tee.

    "Fact is that which enough people believe. Truth is determined by how fervently they believe it."
    --- Charles Pierce
    The best statement I've seen from this latest carnage came from a student who lived through it -

    "My generation will not allow this to continue!"

    Remember voting age is 18. Read it and weep reds.

  3. #73
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    Default Re: Bitcoin frenzy

    Quote Originally Posted by John of Phoenix View Post
    Norman, have you seen this? Bitcoin to a tee.

    "Fact is that which enough people believe. Truth is determined by how fervently they believe it."
    --- Charles Pierce
    There is a reason my signature has stayed in place so long... to me, it represents one of the great truths about today's society!
    "Reason and facts are sacrificed to opinion and myth. Demonstrable falsehoods are circulated and recycled as fact. Narrow minded opinion refuses to be subjected to thought and analysis. Too many now subject events to a prefabricated set of interpretations, usually provided by a biased media source. The myth is more comfortable than the often difficult search for truth."







  4. #74
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    Default Re: Bitcoin frenzy

    Quote Originally Posted by Norman Bernstein View Post
    And just what is the basis of their belief? Anything tangible? Is there a REASON it would rise in value... or fall in value?

    Too many speculators involved at present. If you was involved 5 years ago it was a different scene, and a good means to make micro-payments without getting stiffed by the likes of Visa or Western Union taking a slice, so it is still very much used to transfer wealth, as you say, with no middle man. Exchanges will take a slice when you want to buy or cash out, but that can be done privately without an exchange being involved.


    When I buy a stock, I might have a reason to believe that it will continue to pay the dividend I was promised, when I bought it. The reason? Perhaps a 60 year history of continuous dividend payouts... it doesn't take much 'faith' to observe the history and conclude that the likelihood of profit will continue. Is it absolutely guaranteed? Of course not. Sometimes, businesses exhibit reversals, and the value of their stock falls, or they cut their dividend... but I have a REAL and TANGIBLE basis to invest.

    Agreed, see where you are coming from.


    ...because the younger generation often doesn't have a frame of reference, nor the understanding of history, to appreciate the parameters. Today's 25 year old entrepreneur was only 16 years old at the end of the last significant recession... and has lived the last 9 years in the context of a bull market. He has NO appreciation for what an economic downturn means... so when he sees that bitcoin values have skyrocketed, he's eager to climb aboard the bandwagon. There are few advantages to being old... but perspective is one of them.

    Yeah, did you buy into Berkshire Hathaway? Class A shares are $275,000 EACH. Makes Bitcoin look cheap. Yeah, i know, there is "stuff" behind the shares, but that stuff can also lose value and get wiped out, Lehmans Brothers as an example.




    What is a bitcoin, a placeholder for? Nothing more than the speculative excesses of people. Bitcoins have value, when you pay for them, using money that has recognized value.... and if you're lucky enough to sell them for more than you paid, you receive money that has recognized value. When you think about it, bitcoin is really just a transfer mechanism, with which, you are gambling with the value that you pay or sell bitcoins.

    Agree, but would we be having the same conversation at $3, 5 years ago?
    Spaced it out if it makes sense. I guess its a bit like arguing about religion, you either believe in or not.....think i might take the agnostic viewpoint.
    Last edited by skaraborgcraft; 12-12-2017 at 04:22 PM.

  5. #75
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    Default Re: Bitcoin frenzy

    Quote Originally Posted by skaraborgcraft View Post
    Cant work this advanced setting mode, my response is buried in your quote. My name is not Satoshi......
    I presume the response you wanted to post was:

    Just got one in the post today. I might PM you for some more info.
    You're more than welcome to... I'm a huge fan of the Brunton AutoProp... and Ian bought a pair of them for his new boat, based on my recommendations, which rather surprised me, since he's got twin counter-rotating engines, which I would have expected would render one of the AutoProp's advantages (the complete lack of propwalk) moot. However, he does get the benefit of auto-pitching, as well as increased speed, over fixed pitch props.

    To cut to the chase (sorry for the thread drift here): the one piece of advice I'd give any new AutoProp owner is this: don't bother buying the special end-cap zinc. They make it of a different alloy, which is either higher, or lower, on the glavanic scale (I can't remember which), and from the very beginning, it wouldn't last a month... it just falls off. It's far better to put a pair of decent egg-shaped zincs on the prop shaft... I have done this every year, for the past 20 years, and at the end of the season, the two zincs are about halfway corroded, but the prop shows no corrosion whatsoever. I just paint over the prop nut, each year (using one of those really marvelous prop spray cans... expensive, but it works almost perfectly).
    "Reason and facts are sacrificed to opinion and myth. Demonstrable falsehoods are circulated and recycled as fact. Narrow minded opinion refuses to be subjected to thought and analysis. Too many now subject events to a prefabricated set of interpretations, usually provided by a biased media source. The myth is more comfortable than the often difficult search for truth."







  6. #76
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    Default Re: Bitcoin frenzy

    Arghhhhhhh..... guess what i just ordered this evening, not more than an hour ago.....prop zinc. Thanks for the warning, be interesting to see how long it lasts up here.

  7. #77
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    Default Re: Bitcoin frenzy

    Quote Originally Posted by skaraborgcraft View Post
    Arghhhhhhh..... guess what i just ordered this evening, not more than an hour ago.....prop zinc. Thanks for the warning, be interesting to see how long it lasts up here.
    The conditions for electrochemistry where you are might be different... so it's worth giving it a try. However, dollars to donuts, after a month or two, it won't be there! (Don't forget the shaft zincs, just in case).
    "Reason and facts are sacrificed to opinion and myth. Demonstrable falsehoods are circulated and recycled as fact. Narrow minded opinion refuses to be subjected to thought and analysis. Too many now subject events to a prefabricated set of interpretations, usually provided by a biased media source. The myth is more comfortable than the often difficult search for truth."







  8. #78
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    Default Re: Bitcoin frenzy

    I just cashed out of almost all my bitcoin etfs and etns - the rise has stalled out for a bit so I will wait for some long term surge. I can hardly believe I almost tripled the value of a quite troubled Roth IRA and now it holds safe cash with no tax due on the gains ever (Roths are only taxed at time of creation). I also captured modest bitcoin gains outside that account.

    I will reveal my secret weapon - the simple way to track bitcoin that isn't yet done within the US and something all the financial catv channel gurus are wishing for. It's a pair of ETNs on the Stockholm Stock Exchange which track the bitcoin price in either Euros or Kronor. The names are something like bitcoin tracker one but seems to change depending on the context. The ticker changes as well, so to find the right one on your trading platform just do a symbol lookup for the word bitcoin.

    Symbol lookup should show you a Swiss stock that doesn't remotely track bitcoin. It should show the US etfs BTSC (hyper volatile nonsense etf), GBTC (very overpriced tracker but at least legal for retirement accounts) and 2 Swedish apparently pure tracker etns. The latter can only be traded for the hour or two that NYC and Swedish market hours overlap. You may wonder what good the Kronor version is, but note you can avoid the pointless US "wash sale" rules by alternating between Euro and Kronor. None of this is a recommendation; please inform yourself about various pitfalls.

    Next week may bring some downdafts in price because I think they will start allowing short sale investors. Also the price charts may be forming a "head and shoulders" triple top which in the stock world often leads to mindless selling for a while. Wait for the mindless buying to get established again, and there may arise even better ways to invest, especially for the US states that restrict buying actual cryptocurrency.
    Last edited by rudderless; 12-14-2017 at 12:26 PM.

  9. #79
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    Default Re: Bitcoin frenzy

    P.S. while watching a good weekly Bloomberg TV show called something like ETF IQ, they showed Mark Cuban saying he invests in bitcoin via the Swedish ETN too. That gives some confidence in the ETN management which has more inherent risks than with ETFs. They also mentioned a Swedish Ethereum coin ETN, which I think can spread risk because one crypto coin tends to leapfrog the other in value. So I am modestly back into coin mania, sometimes investing only my previous crypto profits or else balancing other coins with bitcoin.

  10. #80
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    Default Re: Bitcoin frenzy

    Checked it today?

    The best statement I've seen from this latest carnage came from a student who lived through it -

    "My generation will not allow this to continue!"

    Remember voting age is 18. Read it and weep reds.

  11. #81
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    Default Re: Bitcoin frenzy

    Quote Originally Posted by John of Phoenix View Post
    Checked it today?



    if you have any bitcoin... today is NOT the day you want to check on it.

  12. #82
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    Default Re: Bitcoin frenzy

    Quote Originally Posted by John of Phoenix View Post
    Checked it today?

    how low before you buy in John?
    Simpler is better, except when complicated looks really cool.

  13. #83
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    Default Re: Bitcoin frenzy

    When it all collapses, I'm going to enjoy a feast of delicious schadenfreude!
    "Reason and facts are sacrificed to opinion and myth. Demonstrable falsehoods are circulated and recycled as fact. Narrow minded opinion refuses to be subjected to thought and analysis. Too many now subject events to a prefabricated set of interpretations, usually provided by a biased media source. The myth is more comfortable than the often difficult search for truth."







  14. #84
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    Default Re: Bitcoin frenzy

    Quote Originally Posted by Paul Pless View Post
    how low before you buy in John?
    I'm with Norman. I've seen this movie many times before.
    The best statement I've seen from this latest carnage came from a student who lived through it -

    "My generation will not allow this to continue!"

    Remember voting age is 18. Read it and weep reds.

  15. #85
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    Default

    Rudderless, it's good that you made a profit in your IRA. Now if you bought back in on the 18th, after a little sell off, you paid somewhere around 18K. Today, four days later it is trading below 13k.

    I hope you haven't had to suffer these losses.

    Regardless, it illustrates my earlier point,this is gambling, not investing. Something I hope you agree, people shouldn't be doing this IRA money.

    Also, you did point out s critical point in today's investing world that most people do not know:. ETFs in general are inherently safer, structurally speaking, than ETNs. But of course, there are market risks that can make this telatively insignificant.




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  16. #86
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    Default Re: Bitcoin frenzy

    Quote Originally Posted by rudderless View Post
    P.S. while watching a good weekly Bloomberg TV show called something like ETF IQ, they showed Mark Cuban saying he invests in bitcoin via the Swedish ETN too. That gives some confidence in the ETN management which has more inherent risks than with ETFs. They also mentioned a Swedish Ethereum coin ETN, which I think can spread risk because one crypto coin tends to leapfrog the other in value. So I am modestly back into coin mania, sometimes investing only my previous crypto profits or else balancing other coins with bitcoin.
    Mark Cuban can afford to gamble... and 5 will get you 10 that the amount of money he gambles on bitcoin is VERY small, compared to his assets.

    I don't personally know ANYONE who can afford to do that, myself.....

    ....and *I* certainly wouldn't be so foolish.

    At least, Dutch tulip bulbs were pretty, to look at.
    "Reason and facts are sacrificed to opinion and myth. Demonstrable falsehoods are circulated and recycled as fact. Narrow minded opinion refuses to be subjected to thought and analysis. Too many now subject events to a prefabricated set of interpretations, usually provided by a biased media source. The myth is more comfortable than the often difficult search for truth."







  17. #87
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    Quote Originally Posted by Norman Bernstein View Post
    Mark Cuban can afford to gamble... and 5 will get you 10 that the amount of money he gambles on bitcoin is VERY small, compared to his assets.

    I don't personally know ANYONE who can afford to do that, myself.....

    ....and *I* certainly wouldn't be so foolish.

    At least, Dutch tulip bulbs were pretty, to look at.
    Mark Cuban is a good guy, but he can be all over the page n his ideas and advice. I remember a few years ago hearing him say ndividuals should stay out of any individual stock nvestment. Nowhere supports a swedish etn for bitcoins?



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  18. #88
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    Default Re: Bitcoin frenzy

    Quote Originally Posted by peb View Post
    Mark Cuban is a good guy, but he can be all over the page n his ideas and advice. I remember a few years ago hearing him say ndividuals should stay out of any individual stock nvestment.
    Lots of very sage investment folks have said the same thing for years.... John C Bogle, the dean of the mutual fund industry, was one of them...

    ...and with the exception of people with crystal balls, it was generally good advice. Anyone who invested in an S&P 500 index fund starting in January 2009 would have benefitted to the tune of over 15%/yr, in growth.... not at all shabby, and not requiring ANY investment savvy.
    "Reason and facts are sacrificed to opinion and myth. Demonstrable falsehoods are circulated and recycled as fact. Narrow minded opinion refuses to be subjected to thought and analysis. Too many now subject events to a prefabricated set of interpretations, usually provided by a biased media source. The myth is more comfortable than the often difficult search for truth."







  19. #89
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    Default Re: Bitcoin frenzy

    Quote Originally Posted by peb View Post
    Rudderless, it's good that you made a profit in your IRA. Now if you bought back in on the 18th, after a little sell off, you paid somewhere around 18K. Today, four days later it is trading below 13k.

    I hope you haven't had to suffer these losses.

    Regardless, it illustrates my earlier point,this is gambling, not investing. Something I hope you agree, people shouldn't be doing this IRA money.
    I pretty much re-bought coin at top of the market, and considered selling my taxable holdings (ethereum rather than bitcoin) at the bottom. I would then immediately reinvest into another type coin fund to anticipate a rebound, but harvest tax losses that could postpone about half of this years income taxes (my state tax even exceeds federal). I still might do that, but lean towards non-action and treating this as a mini version of the 2013 crash where bitcoin fell about 80% but now sits at about 25 times higher value. There were then I-told-you-so schadenfreude type articles such as this one http://beta.latimes.com/business/hil...207-story.html

    I only invested about 5% of my savings in bitcoin vehicles and 5% in Ether vehicles, a percentage that only inflicts real pleasure or pain if it entirely doubles or goes to zero. I was disappointed that Ether eventually fell the same amount as bitcoin rather than doing the more usual opposite, but that is evidence this was a knee jerk crash with later rebound. Also disappointed with my Swedish trading which due to safety rules by the NYC intermediary would only allow me to trade during 2 pre-dawn hours my time, and having to specify limit protection numbers which made trades cumbersome to follow crazy price action. That NYC opening time is the most volatile, and anyway my mind isn't sharp at predawn hours. BTW those "fringe" Swedish ETNs are actually managed from London by a gravitas-sounding CEO with familiar North American accent.

    My overweight of coin into IRAs would be bad for most, but let's not incite a ban on them. In my Roth I didn't put the total amount back into coins, just the actual and substantial gains that coins had made. So the original pre-coin amount stays in conventional investments, although it is painful to see my earlier coin gains sag in value. I have another coin-shrunken IRA, but I depend on neither for my present early retirement. My earlier strategy of Bogle conservative stock and bonds for retirement vs. speculative into regular savings resulted in modest little IRAs and better regular savings. So now I reverse the strategy and put the speculation into the expendable but tax sheltered areas.

    My non-retirement savings was the last thing I reluctantly put into coins. But I think I deserve the chance to risk that portion that stems from extreme frugality, like never ever having a cell phone or rarely using or insuring even a new vehicle for theft or damage to itself. My only luxury of recent years has been to buy 2 small boats that came up on this forum, but aside from that find me backpacking staggering grocery loads home without the unused vehicle (good exercise too).

    However, here is why I think this crypto stuff is a valid, useful intn'l supertrend which can have legs rather than a dead end bubble. These videos show how particularly Ethereum could spread world prosperity and peace by enabling folks in the developing world even more than the developed world. It can be used for even non-financial transfer transactions like business automation, insurance, loan, and property deed documentation. In the developed world we at least have inefficient alternatives for this now, but there will be some gain with the blockchain approaches. There will be resistance at first, because the tax system has to change to follow sometimes secret transactions (mine not secret since I don't directly buy coin).



    ...and "How Bitcoin is Changing the World": https://www.youtube.com/watch?v=T2zH-T_hmLs
    Last edited by rudderless; 12-23-2017 at 06:17 PM.

  20. #90
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    Default Re: Bitcoin frenzy

    $10,882.41 -4.10%
    Today's Open$11,348.02

    Today's High$11,751.26
    Today's Low$9,199.59
    Change$-465.61
    Market Cap$0.183T
    Supply16,808,925
    Skip

    ---This post is delivered with righteous passion and with a solemn southern directness --
    ...........fighting against the deliberate polarization of politics...

  21. #91
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    Default Re: Bitcoin frenzy

    bitcoin not doing so good lately.

    i still don't really get it, even though i've read 3-4 articles telling me what it is.

  22. #92
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    Default Re: Bitcoin frenzy

    Quote Originally Posted by AlanMc View Post
    bitcoin not doing so good lately.

    i still don't really get it, even though i've read 3-4 articles telling me what it is.
    maybe reading history would help.

    280px-Tulip_price_index1.svg.png

    A currency has value because you can buy things with it. An American dollar will always be accepted by the government for paying your taxes, and since government tend to be huge players in their economies, it makes sense for them to be the issuers of currency. They pay people with it, they accept it in payment, therefore, the government currency has value, which in part reflects the credibility of the government. Andrew Jackson's famously bad policies in regard to paper currency and central banking, for example, caused chaos and broke a lot of the farmers who voted for him.

    https://en.wikipedia.org/wiki/Specie_Circular

  23. #93
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    Default Re: Bitcoin frenzy

    Quote Originally Posted by peb View Post
    Not just commodities, anything [that] will hold value is based on faith.
    I will disagree with that.

    Currency value is based on faith - the belief that I can use the currency as an intermediary for buying things I want and selling things I need. As long as sufficient numbers have faith in the short term, there is faith to some degree in the long term. But I cannot eat fiat currency. But then I cannot eat gold either.

    But commodities are different. There are people who have an actual need to possess the commodity and those who have a supply. The need to possess gives the commodity an actual value. In the desert water has an intrinsic value. What the suppliers are willing to sell for may not be the usual currencies. One could demand food for water. And a new water source would cause a decrease in the value of existing water supplies, but still the value is there.

    The value of a commodity will vary depending on supply and demand, but that does not mean the value is based on faith.

    Because of faith in a currency, some will require payment in the currency. That will give the currency a value. If your employer requires you accept currency in exchange for your labor, currency certainly has value to you.

    Just because a currency or a commodity does not have the value one thinks it should have, does not mean it does not have value.
    Life is complex.

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