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Perhaps I'm reading this wrong but he would have done better just sitting on the coins rather than trying to trade them. He claims with his method he started w

by nemo44x 10y ago

Perhaps I'm reading this wrong but he would have done better just sitting on the coins rather than trying to trade them. He claims with his method he started with $100 and bought Bitcoins valued at .05 which means he could have bought 2,000 BTC at this time. He claims his method netted a profit of roughly $20,000.00. BTC is trading at $1143.00 right now. If he would have bought those 2,000 coins and sold them right now he would have proceeds of $2,286,000.00, essentially all profit as it started from a $100 investment. Plus he'd be paying a long term capital gains tax and not the many short term taxes he'd have paid by day trading BTC. I suppose buy and hold would have been the better strategy.

tobyjsullivan 10y ago
I think he outted himself with this line: > those poor sods who think it’s a store of value and the price will go up for unknown reasons ...followed by an entire article based on the unfounded premise that Bitcoin will continue to rise. The only worthwhile advice in the whole article is nothing more than "buy low, sell high". Beyond that, you could effectively replace the word "Bitcoin" with "AAPL" or "AMZN" and it would be equally accurate. Any security which hasn't crumbled yet certainly looks like a good bet. That said, as one of those "poor sods", perhaps I'm just being a tad defensive.
tinco 10y ago
Buy and hold is only a good strategy if you have a diverse portfolio. The goal of the strategy is then to keep the value of your assets, and maybe make a nice percentage associated with growing economies. If you are operating however with an edge on the market, that is to say you have knowledge you think some percentage of the market does not have. For example you profoundly believe that Bitcoin will increase in value, as the author of the article does. In that case, buy and hold is only a mediocre strategy. At most you will make whatever the percentage is that the asset will grow. If instead you make use of the idea that between now and the mystical future bitcoin value increase, it will go both up and down, you can come up with strategies that make you more money than that value increase. I think it's possible to come up with a strategy that are guaranteed to make you more money, based solely off those two assumptions "Eventually it will increase" and "there will be fluctuations". Some simple ones I've come up with I think come close to it, but I've never dared to execute any of them. I wonder if there's people here who have.
- nemo44x 10y ago
  It would appear that in this instance his strategy of trading the asset numerous times over the years has led to significantly less yield than if he would have bought and held. If you have an edge on the market there's a good chance you're either breaking the law or deluding yourself. Not that some people haven't found legal edges and made vast fortunes from them - sophisticated mathematicians have for instance. But there's many more who confused dumb luck for alpha and ended up underperforming the market or broke over time. You're right though - buy and hold is generally best applied to a diverse set of assets. If you're making direct plays on companies and have little ability to influence the board and leadership then that's a lot of unhedged risk. Warren Buffet's advice is often confused with making directional stock plays. He buys enough to get board seats and can influence the direction of the company and has a track record of doing this well. Regular people will never have enough of a bankroll to qualify for a board seat or have influence on the management. And yes, many day traders and swing traders have some strategies based on short term changes in an asset but taxes are the killer. Short term capital gains are taxed the same as labor but with considerably more risk.

by nemo44x 10y ago

tobyjsullivan 10y ago

I think he outted himself with this line: > those poor sods who think it’s a store of value and the price will go up for unknown reasons ...followed by an entire article based on the unfounded premise that Bitcoin will continue to rise. The only worthwhile advice in the whole article is nothing more than "buy low, sell high". Beyond that, you could effectively replace the word "Bitcoin" with "AAPL" or "AMZN" and it would be equally accurate. Any security which hasn't crumbled yet certainly looks like a good bet. That said, as one of those "poor sods", perhaps I'm just being a tad defensive.

tinco 10y ago

Buy and hold is only a good strategy if you have a diverse portfolio. The goal of the strategy is then to keep the value of your assets, and maybe make a nice percentage associated with growing economies. If you are operating however with an edge on the market, that is to say you have knowledge you think some percentage of the market does not have. For example you profoundly believe that Bitcoin will increase in value, as the author of the article does. In that case, buy and hold is only a mediocre strategy. At most you will make whatever the percentage is that the asset will grow. If instead you make use of the idea that between now and the mystical future bitcoin value increase, it will go both up and down, you can come up with strategies that make you more money than that value increase. I think it's possible to come up with a strategy that are guaranteed to make you more money, based solely off those two assumptions "Eventually it will increase" and "there will be fluctuations". Some simple ones I've come up with I think come close to it, but I've never dared to execute any of them. I wonder if there's people here who have.

nemo44x 10y ago
It would appear that in this instance his strategy of trading the asset numerous times over the years has led to significantly less yield than if he would have bought and held. If you have an edge on the market there's a good chance you're either breaking the law or deluding yourself. Not that some people haven't found legal edges and made vast fortunes from them - sophisticated mathematicians have for instance. But there's many more who confused dumb luck for alpha and ended up underperforming the market or broke over time. You're right though - buy and hold is generally best applied to a diverse set of assets. If you're making direct plays on companies and have little ability to influence the board and leadership then that's a lot of unhedged risk. Warren Buffet's advice is often confused with making directional stock plays. He buys enough to get board seats and can influence the direction of the company and has a track record of doing this well. Regular people will never have enough of a bankroll to qualify for a board seat or have influence on the management. And yes, many day traders and swing traders have some strategies based on short term changes in an asset but taxes are the killer. Short term capital gains are taxed the same as labor but with considerably more risk.