Similarly, an ETF inverse of Cathy Wood’s ARK fund has outperformed quite a bit over the last couple years.
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&t...
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&t...
Take I dunno, Bitcoin. As you increase the time window, showing a net loss is less and less possible. I'm not a crypto bull and I think it will tend towards zero someday but this is inarguable using current historicals.
Don't take this as advocacy, it's not. There's plenty of strong arguments against crypto without having to resort to such truisms
While in fiat currencies it may go on to inheritance feeding the market with liquidity, unused Bitcoin does nothing, so demand being equal price would increase.
In this model, the "cards" are the actual unit coins and the "players" are the type of coin (Bitcoin, Ethereum, etc).
So long as there's a vibrant enthusiast community, the assets will hold some value but except for a few mainstays, these things tend to atrophy over time.
For instance, yesterday I was helping an 80 year old neighbor clean out her garage. I found some wonderful vintage RadioShack calculators from the late 1970s. They're extremely rare and also, extremely worthless. The supply and price of something can both tend towards zero.
But you may be overlooking that they're also liquid, popular, benefit from network effects, the supply is algorithmically defined in many cases, and mostly fungible.
This should make for more interested communities.
If you've bought property, it's still gonna be there after you've died, ready to be repossessed. same with gold, shares or anything else, really?
And if it's been illegally repossessed you'll have a good chance to retrieve them again through lawful means too.
It's a pretty unique attribute that only applies to digital ...things that can only be touched with a cryptographic key
One of the primary goals of statecraft is to enshrine stores of wealth with those properties and most don't do that well at it.
In reality the most common regret they have is selling their coins when they should have kept them or trading them for newer hype coins that turned out to be vaporware.
The claim was that all stores of wealth have those properties. Crypto can suffer them faster but someone's real estate investment from say, the 2013 in Ukraine, 2003 in Syria, 1993 in Kosovo, 1983 in Rhodesia... Such things aren't immune.
Heck even without war the rules of who can invest in what can change and your assets can be seized like in Venezuela.
It's more common in crypto but these problems are perennial.
The primary argument against crypto is that it shows why an open, stable, well structured professional governing state is crucial to the preservation of property rights. It painfully highlights all the problems that happen when you create these assets in a way that's ideologically against statecraft.
You can see it as the crypto bros are reinventing government without using the g word as they discover the problems that are solved by regulations from first principles.
I mean, that was my point. It wasn't meant to be a 'truism', it was meant to illustrate that your investment making money isn't nearly as valuable if that value is lost because of problems that don't exist with other investments.
If I put money into a fund and the owner dies I can still get my money through the courts. If a crypto wallet owner dies and has the keys in his head, it is gone forever. Same thing with options for investing. If I have to use a crypto exchange to do my trading, then the chances of losing my assets increases exponentially.
Risk vs return is a fundamental proposition of all investments. Bitcoin certainly has higher risk, but the fundamental idea that risky investments need more return to justify them applies everywhere not just bitcoin.
Bitcoin on a thumb drive kept in a safe deposit box does not go missing.
Anyway you admitted that it is a riskier investment to hang on to then handwaved it when I said that no one is taking it into account.
This is downright silly. Might as well say if an asteroid hit the earth your money probably isn't safe.
> Anyway you admitted that it is a riskier investment to hang on
Than what? I admited that all investments have risk, and that like all investments some investments are safer than bitcoin and some are more dangerous. I would say the same thing about literally any investment. Even a savings account has some (miniscule) risk
> handwaved it when I said that no one is taking it into account.
You haven't presented any evidence that nobody is taking it into account. Obviously some people are and some aren't, but i'm not sure that distinguishes it from most other investments. You could argue that there is a higher porportion of people not taking it appropriately into account with bitcoin relative to say an index etf, which probably is true, but that is a hell of a goal post move from ">90% probability for crypto over a ten year period" to go to zero due to risk of investment being stolen.
Um, no? Flash memory cells hold a voltage. That voltage is not going to stay in there forever. It eventually leaks out and your data is corrupted. This isn't usually a problem because the cells refresh when powered on, and most people don't use flash drives for a decade -- but put it in a deposit box for more than a few years and you better cross your fingers when you plug it back in.
"During normal operation, the flash drive firmware routinely refreshes the cells to restore lost charge. However, when the flash is not powered the state of charge will naturally degrade with time."[0]
> Than what?
Than nothing. My point was that people say 'if you bought bitcoin you couldn't have lost money because on aggregate it has gone up'. This is incredibly misleading because many people bought bitcoin and lost it in an exchange collapse, or families had their investments disappear because the person managing it died or the wallet got phished with no recourse, or they forgot the passphrase, etc. This is a risk that is not mentioned when people proclaim the great investment that is bitcoin.
> You haven't presented any evidence that nobody is taking it into account.
Um... the person I responded to?
[0] https://www.ni.com/en-us/support/documentation/supplemental/...
It's why people do moving windows.
The enthusiasts don't actually pay for things in Bitcoin but instead horde it so it doesn't really serve a society function as much as it services an ideology.
The Bitcoin core, the true adherents, are approximately the same percentage of the public that did Liberty Dollars; sovereign citizen types that maintain sprawling websites attacking the Federal Reserve or proffering quack miracle cures.
It's a weird sideshow of frauds, scammers, ponzi schemes, multilevel marketing, occult and conspiracy theorists, the kind that listened to Bill Cooper on shortwave ... That's what will eventually be left propping up the value so it's whatever that group can muster. The boom/bust cycle of Bitcoin being approximately 4 years and aligning with presidential elections could be a coincidence... Let's see what 2025 brings.
Regardless, someday Bitcoin will be integrated into their paranoid delusions as part of the enemy plot and these last holdouts will abandon it.
But that's the long game. I might be talking 25 years here. Or maybe 25 months, who knows?
Regarding the long game, it could go longer. You might consider The Great Disappointment: https://en.wikipedia.org/wiki/Great_Disappointment
It was the purest bunk. Sincere bunk, well meaning bunk, but still bunk. It was proven wrong and wrong and wrong again, but not only did some people take their beliefs to their graves, but an offshoot is still going more than 150 years later.
Sure, it's a dead asset producing nothing and having not much use. But it's easier to transfer than stocks or bonds, and does not suffer of unexpected supply inflation.
The solution is flow weighting [1]. Fewer dollars went into Bitcoin when it was small than when it was big. (By definition.) So you weight the larger flows more heavily.
There is arbitrariness around choosing the delineations. But the basic idea is comparisons across totally-different fund-flow regimes are meaningless for purposes of explaining the present state of the world.
[1] https://www.investopedia.com/terms/w/weightedaverage.asp
Just as some people were Nicolas Bourbaki.
Including monthly investment doesn't really help, either.[1]
[1]: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&t...
ARK tripled in value from April 2020 to Feb 2021. So you get very different results by picking a start date in 2020 or earlier.
Just for kicks, though, here's ARKK versus VTI and cash since April 2020.[1]
[1]: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&t...
Include Michael Reeve's Stock Picking Goldfish too.
https://www.quiverquant.com/cramertracker/
The strategy logic is a bit different than the ETF is being rolled out - this one shorts all the tickers he is talking about the most (whether he is bearish or bullish) and hedges with a long position on the market.
Consider that the 1x (non-inverse fund) goes up 10% in a day. At the same time the inverse fund, which tracks it, falls 10%. Now consider the following day that the 1x fund falls 9%, to its original price. Consequently, the inverse fund goes back up 9%, but it's about 2% lower than its starting position. So you still lose money even though the original 1x fund is unchanged.
The better strategy is to buy puts or short the non-inverse, 1x version.
> An enterprising and clearly meme-savvy fund manager out there, Tuttle Capital Management has actually filed prospectuses for two Cramer-tracking funds:
The Inverse Cramer ETF (SJIM)
The Long Cramer ETF (LJIM)
Yet another ETF created for gullible meme-driven investors
I'm not saying ARK is good by any means, personally I'm not a fan of Cathie Wood at all. But context is important as well.
That fund is making big future growth bets. No one would go in with 100% of their portfolio on that.