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Comment by westurner | Hacker News Reader

Over the past 7 years, Bitcoin has outperformed every security and portfolio that Jack Bogle has recommended.

Over the 7 years from 1993-2000, a portfolio of stocks with ".com" in the name far outperformed every other asset class out there. If you held that portfolio for the 7 years following, from 2000-2007, you would most likely go bankrupt.

How does one go bankrupt from holding an asset?

The "most likely" in that statement is in the sense that you still need to eat, and so if all you've got are assets that are worth 1/100th of what you paid for them, you're probably pretty deeply in debt in the rest of your finances. In the dot-com boom, it wasn't uncommon for people to mortgage their homes to buy stocks, to quit their day jobs to day-trade stocks, or to owe hundreds of thousands in AMT on stocks that were worth less than the tax bill when it came due, all situations that could and did lead to bankruptcy.

Those companies no longer exist so the stock value==0.

This is pretty disrespectful to Jack Bogle.

Vanguard is almost singlehandedly responsible for returning trillions of dollars of costs, in the form of fees and underperformance by active managers, back to investors. Millions of investors have benefited.

and what does that have to do with talking about an area with no domain knowledge?

there are plenty of esoteric and dubious assets in the vanguard obligatory diversification model. Get bitcoin in the 1% allocation right next to CDO-ABACUS-2007-SENIOR

Vanguard never owned subprime CDO paper in its money market funds.

only the investment grade CDOs of longer terms

Bitcoin has been a bubble since $1 and $100 to these people.

What evidence is there that it isn't a bubble? People buy Bitcoin only because they think they can sell it higher. Eventually, you will run out of greater fools.

Over the past 7 years, Bitcoin has outperformed every security and portfolio that Jack Bogle has recommended.

Same deal (give or take a few name and parameter changes) as with the preconditions for every speculative bubble - and crash - since the beginning of time, basically.

7 years is a tiny sample size if you are hoping to retire off it (unless of course you cash out your millions during that time). His advice makes sense if you are looking at a 30 year retirement horizon - it may not be there in 30 years.

Interesting.. the stock market will probably be there, just not necessarily the individual stocks you are currently invested in. Unless ICOs take off... now despite all of scams, ICOs allow a global stock market. Now maybe participating in that is dangerous.. maybe not.

>the stock market will probably be there, just not necessarily the individual stocks you are currently invested in

Part of the beauty of index investing - names can rotate in and out of your benchmark based on whatever criteria the index uses (e.g. market value) but you're not bound to a company that drops from the index (you are, however, exposed between the time it becomes ineligible and the next rebalance).

We'll see how well Bitcoin does during the next recession. Plenty of investments seem great when the markets and economy are doing well, but turn into disasters when the markets crash.

I wonder if a crash would be good for Bitcoin's price. I think it is a bubble but it seems like an asset that would gain traction in times of fear/uncertainty in the fiat economy.

People will need to sell their Bitcoins to purchase essentials, but whom will they sell their digital baubles to?

People not experiencing the recession who may be in other countries.

I think it depends on the timing and scope of the crash. Given the current level of doubt, it's still a highly speculative asset that bears significant risk. History suggests a crash would spark a "flight to quality" in which people would likely dump bitcoin in favor of low-risk assets.

What he probably means is if you missed the boat, it is too late to get on.

Sure, it may still double or triple in the next few months. Or it can loss 50% over a matter of days

So did tulip bulbs in Holland in the 17th century. It's still not enough to make it a smart choice.

Bitcoin has greatly outperformed tulips.

Is this a joke? If so its really funny. If not...you definitely are missing the point

false dilemma

try to enjoy yourself

I think they just grew more tulips to meet demand?

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

Only on paper, my friend. Let's see all those bitcoin holders try to realize those profits.

Isn't that true for all investments though? If all holders liquidate the price crashes.

But that only happens if the company is insolvent or otherwise failing. If that isn't the case, new buyers would come in because the stock represents a share of something that has actual value. There is no such underlying asset beneath bitcoin. It's only value is speculative.

Apparently that is enough to sustain it. Many people have successfully liquidated their position and found new buyers.

How about when adjusted for volatility?

How do you do that? It seems hard to me to attach hard $ to volatility. If you go with a rebalancing approach like frequently done for lazy portfolios you'd likely benefit from volatility, would you not?

https://www.investopedia.com/terms/r/riskadjustedreturn.asp

It still outperforms every other asset class. http://charts.woobull.com/bitcoin-risk-adjusted-return/

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