Agree re:CAPE. Meanwhile, people are ignoring the relatively attractive valuations of small, value, plus developed and emerging ex-US markets. While retail investors pile onto overvalued US stocks, these are now slowly catching back up and starting to get ahead. Funny thing about all of this to me is that people are always fighting the last proverbial war. Ten years ago, US stocks and tech in particular were in the doghouse - no one was buying them then.
TL;DR A lot of investors buy high and sell low. We're seeing that now with crypto as well as US stocks.
My main issue is conflating the potential for an approach to technology with something like, say, Bitcoin specifically. Yes, many blockchain applications exist, but that doesn't translate into profits from investing in cryptocurrencies.
I've always liked the saying 'sell pickaxes to the miners' - rather than investing in the virtual gold, why not sell things to those who want to go find it? The real winners will likely be the companies who facilitate things (much like active trading platforms make money while the options traders on them often lose money overall).
I know what it means but have no idea how profitable it is or whether those profits are guaranteed or fleeting. Best I can tell it's like any service (business, not investment): depending on demand and competition, you can make money for a time, then stop at some point. So far that has never been an issue for people investing in the global stock market (i.e. the global stock market persists even as individual stocks, sectors, industries, even whole countries have crashed in the past).
Statistically, everyone trading across all different asset classes evens out, so ... sure, if you're consistently good at finding needles, power to you. Most people aren't. Many people however think they are. I prefer not to worry about it either way.
Rates have been declining for years (decades, really), but so has inflation. The spread hasn't actually changed that much.
> Imagine a society not based on consumerism and quarterly report increases. Gasp!
I have literally no idea what that would look like or how Bitcoin would play a role. I guess hodlers who bought early would be rich and normal people poor?
A good way to get high returns is to simply use a low-cost, tax-efficient combination of stock and bond index funds. After taxes and fees, the results compound in your favor. I have no interest in gambling on even higher returns - those are plenty for me. If you want to maximize your chances of getting rich as well as getting poor, yes, you can put it all on Bitcoin, or Tesla, or 32 at the roulette wheel, but I'm more interested in growing a nest egg than taking those risks.
We have fairly little data on gold as a freely available modern asset class (around 50 years), but yes, in small amounts it can limit volatility and potentially even increase returns (or at least: risk-adjusted returns). That said, over the long haul, independently, it has tended to roughly track inflation. I'm not against it, just see it as something of limited utility to an ordinary investor.
I mean if you're literally talking about the difference between 'buying physical servers' and 'buying Bitcoin' ... well, it seems to me you're missing out on a range of other options, like: investing in companies developing new hardware, for starters. Personally, I just lease what I need at going rates, which get ever cheaper. And by cheaper I mean: in dollar terms - so to keep up with that, I don't see the need to hold highly volatile Bitcoins when I can just hold inflation-adjusted Treasury bonds.
The thing I don't get (and I have the same skepticism about gold ETFs) is that if one is trying to hedge extreme scenarios (e.g. high inflation or even monetary collapse) ETFs being 'protected' could easily fall through. I sort of understand holding one's own gold or Bitcoin, but through and ETF just seems like all the speculation with none of the crisis portability.
You had it with 'we can make infinite coin types' - who cares about what is adopted today? People change platforms every few years. What happened to MySpace? What's happening to Facebook even now? Where did TikTok come from? There is turnover.
A deflationary asset class encourages hording, not spending or using in other ways. There's also no real limit to the number of crytocurrencies that might appear later (see: MySpace replaced by Facebook), unlike gold. As for inflation: safe government bonds have historically kept up with that over the long haul, so no big loss there.
Sure, not always. To clarify: I mean stocks are shares in companies, which generally generate profits. Yes, some companies may not, or may even go under, but none of this is an issue if you hold a diversified set of stock and bond indexes for the long haul (I'm talking about equities as an asset class, not any one stock). Stocks are stakes in companies - bonds pay a risk premium - crypto, gold, etc... don't generate income, which by definition makes them speculative.
> Only 1 of the original companies of the Dow Jones is still in it today
Small companies become bigger, driving returns. That's why you don't just buy the DJIA but rather index the whole market. Of course there will be turnover - the point isn't to lock into any one stock - don't look for the needle, buy the haystack (i.e. a broader-market index).
If you want to include crypto in the haystack, sure, fine, whatever, but at market weights, it's going to be a very small portion of the investable market of stocks, bonds, cash and other asset classes. At some point, it's enough to just keep it simple and broad. A fraction of percent of this or that won't make or break a diversified portfolio.
Even if you accepted it as a diversifier, all cryptos combined still have a relatively small market cap, so I don't really see the point in adding them to a stock/fixed-income portfolio. It's a bit like frontier markets: sure, they're possible to invest in, but expensive, small and won't make a big difference at market weights.
Stocks are shares in profitable companies. They have risks, sure, but they also have expected returns based on sound fundamentals and a long history of generating income.
I assume so these days, but TIPS didn't exist when this article was written. And probably not exclusively TIPS in any case (but perhaps combined with equities, etc.).
Sounds like you need a 'third place' - I had one for a while, then it closed down (and I moved). But when you find one, they're great: https://en.wikipedia.org/wiki/Third_place
That was the most remarkable thing to me - that's just one pixel moving around. Imagine if we had two, or four, or eight? Pretty quickly we get amazing and complex results.
I don't know. Egyptian pyramids are a source of endless fascination for modern scientists and laypeople alike. Corpses add to the intrigue, don't they?
In most cases on twitter/facebook, the author's official account post is going to be the main area for discussion. For places like here or reddit, alerts are an option.