All Things Personal Finance

[computerwiz]

17 hours ago, jdcarlson said:

I know there is a lot of "buzz" around crypto investing in recent years. I would NOT recommend that. It is not based on any "backed" medium of exchange (i.e., the dollar which is backed by the US, or the pound sterling which is backed by the UK).  It is based solely on what public opinion thinks it is worth.

 

That mentality is what sets us so early as investors.  You think it is just about the value.  That's not it at all...

 

It's the technology that has the appeal.  That's where the value lies.  It's not set to any specific nation.  There's no middleman that dictates whether I can send you money or not.  It can be banned, but not stopped.  You'd have to take down basically the entire internet to effectively take it down.  No worries about a storm taking your bank down.  Bitcoin in particular has been around 16 years and has not been hacked.  Etc. etc. etc.

 

All that being said, I don't apply it to other crypto.  Other crypto is similar, but they are more akin to stocks than coins.  The majority of the rest have companies behind them.

 

However, I would further argue that they're superior to stocks, because they are generally locked to their code.  In stocks, you have to worry about companies doing reverse splits or releasing more shares or having bad earnings reports or making one stupid decision (talking about you Bud Light) and tanking their shares.  I find that stocks are MORE risky than coins.....as long as you know how to do your research into crypto.  There's lots of tools...you just need to learn them.

 

I've dabbled in both the stocks & crypto world.  I have had WAY more success in crypto than stocks.  It just takes time, careful research, and understanding.  In stocks, you can just throw your money at big name companies (like Apple) and be alright in the long-term.  In crypto, 99% of coins fail.  Which is why careful research is needed.  One can easily argue that JWs don't have time for that.  Thankfully I have a job where I can afford to do that.  😬

[jdcarlson]

One's approach to investing will determin how one makes selections.

 

There is a defference between an "investor" and a "speculator".

 

An "investment" entity will look at a potential investment and analyze its potential for future earnings. An "investor" looks at things with a five or ten year horizon. A prime example of an investor is Warren Buffett (Berkshire Hathaway). His portfolio does not "churn." He analyzes a potential investment to see what it might earn in the next decade. Based on that, he makes his investments.

 

Few investment companies have built the long term success as Mr. Buffett with Berkshire Hathaway. Although the value of an investment in Berkshire Hathaway will vary up or down, over a 20 year period is has seen increase in value matched by few other companies. Berkshire grows based on the earnings of the entities in which it invests, not on someone else's idea of what it might be worth.

 

Bitcoin is a medium of exchange, not an entity the produces anything it can "sell" to someone else. It does not generate income or revenue on it's own. The income from Bitcoin (or any crypto currency) will depend on other's idea of what it is worth.

 

A good investment will generate income from something it does (as in a service company) or something it makes (as in manufacturing), or something it sells (as in a store). 

 

The following URL link will demonstrate the volitality of Bitcoin (which principles will apply to any crypto investment).

 

https://www.investopedia.com/articles/forex/121815/bitcoins-price-history.asp

 

Thanks,

 

Jim

[computerwiz]

6 hours ago, jdcarlson said:

Although the value of an investment in Berkshire Hathaway will vary up or down, over a 20 year period is has seen increase in value matched by few other companies.

 

I bet their returns didn't look anything like Bitcoin's. 

 

 

 

Well, stick with what you know. But it blows my mind how we've had 16 years to look at Bitcoin and how it works and the results (which speak for themselves) and how the cycles work and yet it's still scary. 

 

You got company after company opening ETFs for Bitcoin. What do they know?

 

You got countries adopting Bitcoin as legal tender. What do they know?

 

You got places spending millions on Bitcoin farms. What do they know?

 

You got a potential president that wants to have a Bitcoin reserve. What does he know?

 

Just saying...

[computerwiz]

 

Probably nothing....  😉

[computerwiz]

This is why I get into crypto. 50% profit in 45 days.