OT: Stock and Investment Talk
- Thread starter RU-05
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2020 returns as of 12/30:
Composite return = +19.5%
Based on a weighted average of our 7 retirement accounts (doesn't include our cash/CDs or daughter's 529). Top performing account came in at 34.6% based on the power of FGCKX (Fidelity Growth Company K). Our low was 12.8% for our new/current 401k account (I moved companies in late 2019). Played it too safe with this account for the first half of 2020 and couldn't catch up to the S&P 500. This account has great index options, but very light on the managed funds.
Overall, pretty happy. Stayed cool during the corona crash and made a few good pivots throughout the year. Onwards to 2021!!!!!
Composite return = +19.5%
Based on a weighted average of our 7 retirement accounts (doesn't include our cash/CDs or daughter's 529). Top performing account came in at 34.6% based on the power of FGCKX (Fidelity Growth Company K). Our low was 12.8% for our new/current 401k account (I moved companies in late 2019). Played it too safe with this account for the first half of 2020 and couldn't catch up to the S&P 500. This account has great index options, but very light on the managed funds.
Overall, pretty happy. Stayed cool during the corona crash and made a few good pivots throughout the year. Onwards to 2021!!!!!
Don't care about catching the biggest fish, want to catch the most fish at the end of the day! :)
1)Doesn't it have value now? Currently selling for $28K per. Now that value may be super volatile, but isn't that it's value?
2)Like silver it does not need to be the most appealing, it could be the 4th(or 2nd or 10th) and it could still be a viable store of value. And it does seem to have more appeal amongst younger folks, to them what's going on in their phones is as real as a gold bar, which could give it legs.
I'll also add this, and to me this argument kind of works both ways.
Crypto is digital computer currency, pretty abstract, not at all tangible. Similarly though, I could buy "gold" in the form of GLD. Or I might buy physical gold, have it stored somewhere, and then have confirmation of ownership via computer, or a piece of paper. I already move most of my money around online. My Etrade account is completely digital. I probably handle less then 5% of my money in a physical form, and I've never held any sort of precious metal outside of a gold necklace. And I think that stands for 99% of the population, very few people are going to actually own a significant amount of physical gold, or have a significant portion of their dollars stacked up in a safe.
So to me, why do we need crypto when everything, from dollars to gold is already digital? But on the other hand, why not Crypto if all these other options are also digital?
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I feel they have McDonald on so as to have a wider range of opinions. They have some guys who are really into bitcoin, (Tom Lee predicted 300% 2021 upside on that very show you speak of) and then they have McDonald as a balance.
He has also been very bearish on the overall market, so again, a wider range of opinions, as many on there are of the opinion that overall market is going up.
It's the range of opinions on the shows that I like.
As per UVXY I really didn't understand what the deal was with that. I like the straightforwardness of owning a stock. Similarly options trading sounds unnecessarily complicated. But whatever he was talking about in terms of owning calls on UVXY because of the potential for a 10x return if volatility spikes? That did catch my interest.
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I believe you are confusing speculative value vs intrinsic value. Can you calculate the intrinsic value of the asset for me? If no, that's a problem.
It does have value. But it’s price is far and away speculation driven. Remember Tulipmania?
It’s sort of like Tesla, but at least with Tesla, if it goes bankrupt, it can sell off its assets to partially pay back creditors. And it employs people and adds to the velocity of money which are positive externalities.
My main concern with bitcoin is what’s stopping the US government from creating its own cryptocurrency if the tech proves itself?
Or Visa? Or MasterCard? Or Apple? Or Google? Etc.
I mean value as in what it costs to buy bitcoin right now. It's $28K per coin. That's what it is currently valued at.
It's true it doesn't have an intrinsic value, and that is why it is so volatile, but that doesn't mean it doesn't have an actual current value.
No arguments here.
Very much like Tesla. Sure Tesla has significant physical assets, but the current sky high value of TSLA is based upon the BELIEF that people will want to own TSLA stuff(cars and beyond) in the future. And that goes for Solar and weed stocks. The converse is true of oil. All about the belief of what people will want in the future.
It's price is what it is. You can put words in parenthesis in front of it, but if you want to buy some right now, you need to pay that current price.
The finite amount is actually bitcoin. Gold is still being discovered and no one knows for sure how much there is on earth. I agree that bitcoin is a difficult concept to absorb, but I've read up a lot on it, enough that in my age of retirement, I believe that a portion of my portfolio should be in it. I'm very glad I am.
Government can make their own cryptocurrency, I agree. What makes them stop making more of it, similar to printing more money? That devalues whatever crypto they decide to manufacture. Bitcoin will forever only have a sum total of 21.5 million "coins". That makes it a pretty good hedge vs inflation and devaluing of fiat currencies. I don't know how government can regulate it though since it is used worldwide and is the defacto currency of some countries (Venezuela, Nigeria for example). It continues to gain "value" with institutional acceptance (PayPal, Square, Ruffer, Guggenheim, John Tudor, Citi, MassMutual) from those that are far smarter than I am. Comparing tulips to bitcoin is really not valid.
I'd actually argue, the dollar, and other gov't currencies are already digital currencies, with a physical paper option. Certainly lots of people still like the option.
Ha, nope, but I don't own it because I want to use it. I own it because I believe that others believe in it.
It's certainly somewhere on the Tulips to Gold spectrum. At some point it may work it's way towards the Tulips end, but right now it's running towards the gold side.
I'm willing to ride that momentum.
No and I don't intend to. I use it as a store of value, digital gold if you will. Tulips came and went never to come back. Bitcoin has been around for 12 years+/-. It has proven its resilience. Now its in the early phase of its acceptance. In any event, I'm not here to proselytize ownership, just trying to simplify the subject, which is a totally new concept to absorb. A weak analogy would be the early stages of electric vehicles that got 20 miles to a charge, couldn't go faster than 50 mph. Most people said the public would never accept electric vehicles.
The digital aspect is only one part of bitcoin. The dollar is not finite, whether in paper or digital versions.
An ownership stake in a business has value irrespective of the price someone may quote for said ownership stake at a given point in time. Same with items such as bonds or other securities which have a claim on cash flows. Each and every stock you purchase represents your ownership stake in the entity, and you, as an owner, are entitled to receive your share of the income of the enterprise. That has value, and you can actually calculate a range of what that is worth.
When you buy a stock, you are allowing a management team to direct how the cash earned by the business is directed subject to oversight by a board of directors which, as a shareholder, you can help elect. There is intrinsic value to such instruments.
Bitcoin, and gold, lack those items. Neither will pay you a dividend. What you describre as value is simply the price someone else will pay for it at a given time. That is very different than an investment that can be objectively analyzed and valued. Purchases of bitcoin are by definition speculations. That doesn't mean they are bad, but they shouldn’t be viewed as investments, either.
Ya, I'm definitely not thinking the dollar is finite, whether paper or otherwise. Just that it has a digital aspect to it.
But what are the other aspects of bitcoin?
No, it’s far more than semantics. And it matters, because people should have a sense for where there money is “invested.”
Bitcoin is certainly different then a company, no argument there. It's a product, not the thing that makes the product, maybe that's a good way to put it?
I hate to say this. But I watched this attitude as a 16 year old summer intern doing work at a small Wall Street firm (those are now extinct) a computer does now and watching the Apollo 11 astronauts land at what's now South Street Seaport for their ticker tape parade. I watched people my age say "what could go wrong I've got portfolio insurance" in 1986, I watched the first generation of day traders in the early 90's and the dot.com'ers in the late 90's. I saw the big short develop in 2006-7.
All I can say is "beware". Or as Hal Holbrook said in "Wall St." "You're on a roll kid. Enjoy it while it lasts, cause it never does."
That is irrelevant.
An investment has value whether or not someone quotes a price for said instrument at a point in time. If you own a business, you are entitled to the earnings of that business subject to what I discussed in my earlier post.
lf you own something that will only lead to cash when you sell it, it’s not an investment. It’s a speculation. There may be room is ones portfolio for speculations, but people should understand the difference between that and an investment. Probably not a good idea to have a portfolio of speculative positions.
If the market for bitcoin closed for a period of time, how would you determine the value?
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It's a relatively small position and I've already pulled my initial "investment" so it's all good.
I get it, you're talking the vernacular of the investing world, and I should try to adhere to that usage, but I'm not sure dictionary definitions should be considered irrelevant when we are discussing semantics.
The language matters and should influence how people view their portfolio allocation. Having capital deployed in a variety of instruments that are intrinsically valuable because they produce cash flows is very different than owning instruments that will only lead to cash if someone turns up to pay a price for it. That is not semantics,
You should definitely listen to Frida. He's the real deal and has been investing well before this March (to say the least). The most important thing for you to remember (and all of us) is that what is working now in this raging tech/growth bull market isn't going to be what works when the market goes back to normal or becomes bearish.
Now, I do think the party will continue in 2021 for the reasons I have mention numerous times, but planning for the winds to change is something we all must do.
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1) a store of value (increased acceptance as stated in a previous post) due to its finite quantity
2) currency (although not widely used, it has been increasing in its use as currency)
3) censorship resistant alternative source of wealth
4) hedge against inflation/devaluation of fiat currencies
There are redundancies in my points above but its uses will increase and vary over time as more widespread acceptance continues. The underlying blockchain technology has the potential to be truly disruptive in thousands of industries.
To Frida's and TKP's points, diversification is the best longterm way to invest and grow your personal wealth. To many, myself included, a portion should be allocated to new technologies/industries/disruptors in order to not fall into the FOMO category and dive in when things are priced too high. Always do your investment homework.
Serious question: Can you even name 5 people who use crypto currencies in the manner you describe?
