Investing Thread

[rocky_warrior]

vs the dollar, yep that's true. 

Not vs the $.  Just down around 74% for the past year.

It's actually pretty fun to see someone collapse in real time.

Not really fun.  That's the warning I would give to any crypto investor.

[MuggsyB]

This FTX story is insane. 

[tower912]

Not really.   

Harry Truman:   The only thing new in the world is the history you don't know.

[TSmith34, Inc.]

Not really.   

Harry Truman:   The only thing new in the world is the history you don't know.

Yeah, it's not even Enron level.

Trusting large amounts of money to a 20-something in a completely unregulated industry, a guy that lives in the Bahamas to avoid scrutiny? Bad risk management.

[Hards Alumni]

Not vs the $.  Just down around 74% for the past year.

That's not how this works.

[MU82]

"It's partly fraud and partly delusion. That's a bad combination. I don't like either fraud or delusion, and the delusion may be more extreme than the fraud."

-- Charlie Munger, on crypto.

[Hards Alumni]

"It's partly fraud and partly delusion. That's a bad combination. I don't like either fraud or delusion, and the delusion may be more extreme than the fraud."

-- Charlie Munger, on crypto.

He's 98, and made all of his money on central banking.

Eye don't see the point you're trying to make here. 

[jesmu84]

He's 98, and made all of his money on central banking.

Eye don't see the point you're trying to make here.

I'm sure Charlie was never involved in anything fraudulent

[TSmith34, Inc.]

From a link the NYT morning brief.

https://www.vox.com/future-perfect/23462333/sam-bankman-fried-ftx-cryptocurrency-effective-altruism-crypto-bahamas-philanthropy?campaign_id=9&emc=edit_nn_20221117&instance_id=77783&nl=the-morning&regi_id=98421546&segment_id=113408&te=1&user_id=65badcb7c07b4cd4815fe5e758510381

Again, this dude was seen as a leader in the crypto space. People put their trust and tens of billions of dollars in the hands of a guy that apparently couldn't read a balance sheet.

Unlike the Enron guys, I don't think he had bad intentions, but talk about being totally unprepared and over his head...

[MU82]

He's 98, and made all of his money on central banking.

Eye don't see the point you're trying to make here.

A guy regarded as one of the most successful investors ever offered his opinion on crypto, and I shared it.

Those reading can get as much or as little as they want out of what Munger said.

[TSmith34, Inc.]

He's 98, and made all of his money on central banking.

Eye don't see the point you're trying to make here.

There are definitely some parallels between crypto and wildcat banks

[JWags85]

From a link the NYT morning brief.

https://www.vox.com/future-perfect/23462333/sam-bankman-fried-ftx-cryptocurrency-effective-altruism-crypto-bahamas-philanthropy?campaign_id=9&emc=edit_nn_20221117&instance_id=77783&nl=the-morning&regi_id=98421546&segment_id=113408&te=1&user_id=65badcb7c07b4cd4815fe5e758510381

Again, this dude was seen as a leader in the crypto space. People put their trust and tens of billions of dollars in the hands of a guy that apparently couldn't read a balance sheet.

Unlike the Enron guys, I don't think he had bad intentions, but talk about being totally unprepared and over his head...

I don't buy that.  They hid behind "effective altruism" while doing really shady stuff.  They were also actively embezzling

https://twitter.com/Gold_Mansack/status/1593238242899402752?s=20&t=Z2-3ERAi-V-hQStmqAJckg

Not to mention SBF's trading fund, Alameda, was using FTX customer deposits to trade...while actively using those FTX customers trading information to front run and trade against them. 

They were way over their heads in how to run and manage a company/balance sheet with that much capital.  But they were also being shady, duplicitous, and dirty from the start.  Originally management of Alameda left a few years ago because they were uncomfortable with a lot of the activity...so SBF installed his GF as the new CEO

[rocky_warrior]

That's not how this works.

Ok.  What physical token of value would you like to compare it to?  A house?  A loaf of bread? Newspaper delivery?  A loaf of bread in Spain?  In the past year, it's dropped ~75% vs a loaf of a bread - everywhere.

edit:  Lets agree on the big mac index - which some argue is a true measure of inflation.
https://inflationchart.com/bigmac-in-btc/?time=1%20year&logarithmic=1

[jesmu84]

Ok.  What physical token of value would you like to compare it to?  A house?  A loaf of bread? Newspaper delivery?  A loaf of bread in Spain?  In the past year, it's dropped ~75% vs a loaf of a bread - everywhere.

edit:  Lets agree on the big mac index - which some argue is a true measure of inflation.
https://inflationchart.com/bigmac-in-btc/?time=1%20year&logarithmic=1

I prefer the Costco hot dog or Arizona tea index

[Hards Alumni]

Ok.  What physical token of value would you like to compare it to?  A house?  A loaf of bread? Newspaper delivery?  A loaf of bread in Spain?  In the past year, it's dropped ~75% vs a loaf of a bread - everywhere.

edit:  Lets agree on the big mac index - which some argue is a true measure of inflation.
https://inflationchart.com/bigmac-in-btc/?time=1%20year&logarithmic=1

I'd compare it to a currency with long term store of value.  Similar to what gold used to be.  Also, the ~75% number you're listing is not accurate.  It's like ~50% in Turkish Lira.  So, it varies significantly from country to country.  Much like GBP to USD has fallen ~25% this year.  Now, no doubt that BTC is down world wide in price.

Media and banks and a lot of people love to pile on and say, "BTC is going to zero!", but when it goes up, they're quiet, or they're investing in it themselves.

At this point, it's clear that there are a lot of financial institutions that are invested.  BTC is now heavily tied to the stock market.  Meaning, when the market goes up, BTC goes up.  When the market goes down, BTC goes down.  And it is much more volatile as a result of being a "speculative" asset.

As time goes by and more financial institutions will add BTC to their portfolios and the volatility will decrease.  I have no clue what this means for price, but I'm guessing up.  I don't really follow any other crypto stuff but BTC, and ETH a little. 

[rocky_warrior]

Media and banks and a lot of people love to pile on and say, "BTC is going to zero!", but when it goes up, they're quiet, or they're investing in it themselves.

I guess I'm somewhere in the middle.  But I definitely don't think BTC specifically is a good long term store of value.  Crypto overall has a long term future in our society, and BTC, ETH and others "gained" value because they were seen as novel and secure (hah!).  For a while I believed mining technology (GPUs) were a good investment because of the crypto craze (and they were) But at this point, crytpo "technology" is a dime a dozen, and it will only be widely accepted once a legitimate government issues one, and guarantees it's value the same as their physical currency. 

But really, is that even needed when we have credit cards, and very few of us ever even touch greenbacks anymore?  It's already a digital money society.  We'll see.

[Skatastrophy]

I'd compare it to a currency with long term store of value.  Similar to what gold used to be. 

This is a hot take. Holy smokes.

[Hards Alumni]

I guess I'm somewhere in the middle.  But I definitely don't think BTC specifically is a good long term store of value.  Crypto overall has a long term future in our society, and BTC, ETH and others "gained" value because they were seen as novel and secure (hah!).  For a while I believed mining technology (GPUs) were a good investment because of the crypto craze (and they were) But at this point, crytpo "technology" is a dime a dozen, and it will only be widely accepted once a legitimate government issues one, and guarantees it's value the same as their physical currency. 

But really, is that even needed when we have credit cards, and very few of us ever even touch greenbacks anymore?  It's already a digital money society.  We'll see.

If you're laughing at the security of BTC, then you honestly are out of your depth here.  BTC has never had a security risk in its existence.

Have centralized unregulated exchanges?  Yes, of course.

If you're asking, "Why should BTC exist?" then you should probably do a little bit of googling.

[Hards Alumni]

This is a hot take. Holy smokes.

If you feel that way, I guess.

[TSmith34, Inc.]

I don't buy that.  They hid behind "effective altruism" while doing really shady stuff.  They were also actively embezzling

https://twitter.com/Gold_Mansack/status/1593238242899402752?s=20&t=Z2-3ERAi-V-hQStmqAJckg

Not to mention SBF's trading fund, Alameda, was using FTX customer deposits to trade...while actively using those FTX customers trading information to front run and trade against them. 

They were way over their heads in how to run and manage a company/balance sheet with that much capital.  But they were also being shady, duplicitous, and dirty from the start.  Originally management of Alameda left a few years ago because they were uncomfortable with a lot of the activity...so SBF installed his GF as the new CEO

You may be right. From the limited amount I've read I didn't get that impression, but I admit I haven't been that closely following until now. Woof.

But how do we know that the girlfriend of a 20-something wasn't totally qualified to be the CEO, huh?

[MU82]

Turns out that lots of Congresspeople took donations from FTX and other crypto companies. FTX lobbied especially hard to keep Congress from enacting any laws that could be seen as possibly limiting the industry.

[JWags85]

You may be right. From the limited amount I've read I didn't get that impression, but I admit I haven't been that closely following until now. Woof.

But how do we know that the girlfriend of a 20-something wasn't totally qualified to be the CEO, huh?

My favorite quote about her thus far was

"Ellison was playing blackjack while able to see all the cards...except she didn't know how to play blackjack or any of the rules."

[muwarrior69]

So how is this any different than what Bernie Madoff did? I guess the SEC is just window dressing as nothing has changed.

[MuggsyB]

Turns out that lots of Congresspeople took donations from FTX and other crypto companies. FTX lobbied especially hard to keep Congress from enacting any laws that could be seen as possibly limiting the industry.

Apparently Fried was the 2nd largest "donor" to Democrat politicians and organizations (after Soros)and also "donated" to a few Republicans.  As far as the class action lawsuit I'm not sure how you could prove the celebs are liable? Nor should the political people or organizations be obligated to "pay back the money" like some are suggesting.  Accepting the money isn't illegal unless I'm missing something?

[rocky_warrior]

If you're laughing at the security of BTC, then you honestly are out of your depth here.  BTC has never had a security risk in its existence.

Have centralized unregulated exchanges?  Yes, of course.

I wasn't specifically talking about BTC (nor did I imply that I was).  And yes - just like someone can mug you and take your actual wallet, it is insecure. 

However, unlike the insecurity of your credit cards (with fraud protection)- it's really hard to claim theft or get your money back.