Comment by brunoac | Hacker News Reader

Comment by brunoac | Hacker News Reader

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Here is some facts

- There was a massive increase of money supply last year. That combined with the restrictions imposed on our economy by the pandemic means prices will certainly go up and purchasing power go down

- There are many indicators telling us the stock market is overvalued. Some of them: Warren Buffet indicator (cap-to-GDP), ev/ebitda, Shiller P/E, ...

- Commodities are historically at a low price

You should adjust your portfolio with the reality of the asset class (store of value, stocks, bonds, crypto, commodites, real state, ...).

You cannot predict if a crash is coming or not. And you should not. You should adjust your exposure related to risk. The greater the risk, less exposed you should be to that asset. It is not binary.

Right now

- Stocks are risky

- Gold and BTC as store of value to protect against inflation, not so risky

- Silver, oil, and other commodities, not so risky

- Bonds seems very risk also

- Real state I have no clue

> There was a massive increase of money supply last year. That combined with the restrictions imposed on our economy by the pandemic means prices will certainly go up and purchasing power go down

People have been saying this for ten years:

* https://economics21.org/html/open-letter-ben-bernanke-287.ht...

> Gold and BTC as store of value to protect against inflation, not so risky

The volatility of BTC is ridiculously high. It is not a good store of value. There is very little evidence for gold as a hedge against inflation:

* https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2078535

Or of having any practical investment utility:

* https://www.pwlcapital.com/will-gold-save-the-day/

> Silver, oil, and other commodities, not so risky

Commodities are volatile. Very risky. Oil went negative in 2020:

* https://news.ycombinator.com/item?id=24055237

TL; DR: do the opposite of what this fellow is suggesting.

Would you care to elaborate on why you consider BTC to not be risky?

Quite frankly, any asset that can go up 300% in a year (or 100% in 3mo) is prima facie a high-risk investment and can just as easily have a swing down of the same relative magnitude. Nothing in BTC’s history as an asset should give any reason to believe it’s currently a stable store of value, full stop.

Sure. Not an expert here.

Of course in the short-term is very risky and would not recommend anyone to make an entry right now. I have been reducing my exposure as the prices have been going up.

However when you look at the fundamentals of the technology and what all governments are doing to money I think it is not a so risky bet for a 3-year (don't know, maybe 10-year?) bear market with high inflation. One of the greatest assets in the world for keeping your purchasing power intact. If the government keeps printing, the price will keep going up. Just like the Venezuelan bolívar is >1 Million to 1 USD. A question comes to my mind: are Venezuelans thinking that the US dollar is too risky to buy?

BTC and any crypto essentially has no fundamentals and no indicators. It's like we can look at the stock and bond markets for things like interest rates, P/E ration, yield curve and a zillion others. Commodities are supply and demand for the most part. BTC just goes up from it's own hot air. You can look at it's record and say that it will keep going up because it's been going up. There's been dips before, but no one can say what triggered it other than a stampede. So long as there's no indicators, there's no negative indicators. So investors are happy.

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