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Comment by bognition | Hacker News Reader

Why do articles like this keep showing up on HN? So the guy called the burst of a previous bubble, guess what lots of people did but that is bound to happen when thousands of people are crying bubble every day for years. Inevitably when the market crashes there will be a lucky few who think they predicted it.

Next, even if he is some savant that can see bubbles coming how does that qualify him to make blanket statements about Bitcoin?

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Agreed. I also believe we'll enter an economic crisis (smaller than the 2008 one) in 2018, in part because an economic crisis seems to happen every 10 years or so, and in part because the stock bubble is looking to burst sometime soon and it will bring other things down with it (because of the overall panic in the market, as it tends to happen).

There's a high chance I'm going to be wrong about the year, but if I do get it right, I'm going to refer to myself as "the man who called the 2018 economic crisis" around here afterward.

Well if he's an expert on investments then it qualifies him to make a statement on bitcoin as an investment. You don't have to agree, or believe him, but it's pretty easy to see that many people are throwing money at it in hopes that more people continue to throw money at it.

Sure but that can be said of any speculative trader going long on an asset. It doesn't make it a bubble.

Of course, a bubble is something that popped so can only be defined post hoc. There's some good reasoning in this letter though.

Yeah but an equity investment has intrinsic value. Either through future earning to which as a shareholder you are entitled or to the residual value of the company if you shut it down now. You can trade it in a speculative way, and if it starts to trade at a level that cannot be justified by its intrinsic value, then we are in bubble territory too.

>Why do articles like this keep showing up on HN?

Because it doesn't take many upvotes to push something to the front page. (I believe at the time of your comment, it had ~20 upvotes.)

To simplify, you have 2 competing philosophies about cryptocurrencies:

1) the idealists about BTC/Ethereum empowering decentralization

2) the skeptics that believe digital currencies are hype

Each side has a group of people submitting stories. And apparently, each side has enough critical mass (e.g. ~20 votes) to constantly push their opposing agendas to the front page.

E.g. for Ethereum... Whether it's a positive story ("Learn to Write Smart Contracts") or a negative story (schadenfreude about DAO meltdown), both will continue to make the front page for years. I refreshed HN front page an hour ago and it had 3 stories about bitcoin.

Or to look at it another way, BTC stories keep appearing because there are not enough upvotes for other stories unrelated to cryptocurrencies.

I think early momentum accounts for frontpaging too - 20 upvotes in 2 minutes raises faster than 20 up votes across 24h

Howard Marks is an incredibly well respected investor, and this memo makes a lot of good points.

That said, his underlying criticism of crypto boils down to the usual ad hominem / appeal to authority kinds of attacks. I was hoping for a well reasoned critique, but there is far better criticism of the actual technology and economics on HN.

But his point isn't just that crypto is junk, he assumes that his audience will take his word on that and devotes little effort to defending that position. What he is really doing is using crypto as an example of how overheated and risk-seeking the broader market is.

Personally I think he's right about the market, including crypto prices. (Though I'm guessing that a growing number of people are hedging their portfolios with crypto speculation, and the jury is out on how the asset class will fare in a broad-based correction.) I think he's wrong on his dismissal of the technology and asset class.

I agree that his attack on crypto currency is not well reasoned. He says himself he doesn't understand it. But the rest of the memo makes good points.

That's strictly editorializing on CNBC's part. Howard Marks is known for quite a few things and calling the tech bubble is nowhere near the top of the list.

Not only that but even with the dot-com bubble, the internet still exists and tech companies are still booming.

Yes there was short-term fall out from the dot-com craze, but it didn't fundamentally change anything.

Crypto is absolutely in a bubble. It will pop eventually. That doesn't mean it will become obsolete or invaluable. I believe the tech is here to stay. It may not be as lucrative for the get-rich-quick-sheep, but it will get used.

> Yes there was short-term fall out from the dot-com craze, but it didn't fundamentally change anything.

This guy is an investor, the memo has been sent to "Oaktree Clients". If one had invested in DrKoop, theGlobe.com or Pets.com, their fundamentals as far as disposable income or outlook on retirement might've shifted dramatically.

It's like trying to persuade someone whose retirement funds were all in Enron to take it easy, because electricity still exists.

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