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Cryptocurrency is comparable to a tech stock because computers? That's about the extent of what they have in common.

by diab0lic 9y ago

deleted 9y ago
[deleted]
sodafountan 9y ago
If you don't understand technology you're not going to understand crypto-currency, that's the point.
- TheAdamAndChe 9y ago
  This is wrong. You don't need to understand hashing and network algorithms to understand supply and demand. There's a fixed supply of bitcoins and a rising demand due to speculation. Anyone can see that that this is what is driving the growth, but blind speculation is how bubbles form, and bubbles always pop. Here[1] are the signs of asset bubbles. I've posted the signs I feel are most relevant to Bitcoin below. > Rationalizing borrowing, lending and purchase decisions based on expected future price increases rather than the ability of the borrower to repay. > Rationalizing asset prices by increasingly weaker arguments, such as "this time it's different" or "housing prices only go up." > A high presence of marketing or media coverage related to the asset. [1] https://en.wikipedia.org/wiki/Economic_bubble#Identifying_asset_bubbles https://en.wikipedia.org/wiki/Economic_bubble#Identifying_as...
rytill 9y ago
Compare it to something else then.
- diab0lic 9y ago
  Houses in 2008 where valuation was driven more by hype than some intrinsic value. Tech stocks in 2000 when the same thing happened. Or everyone's favorite tulips. I know people hate to hear this but unless you have a target price and a rational explanation as to why it's worth that much you're just gambling.
dominotw 9y ago
I was always curious about his stance with tech, why "he doesn't understand them well enough." ? What about them that he doesn't understand that he can with non-tech stocks.
- diab0lic 9y ago
  His game is identifying undervalued assets. If you're not confident you know how to value the asset you can't identify undervalued ones. I guess the point I was getting at was valuing a tech stock and valuing a crypto have little to do with one another. One is a business (which might be used as a speculative vehicle) while the other is a speculative vehicle. EDIT: More specifically anything with as much hype as crypto (and tech to a lesser extent) is not really in the value investing camp in which Buffet is trading. Avoiding them entirely is a very useful heuristic for him.
deleted 9y ago
[deleted]

Cryptocurrency is comparable to a tech stock because computers? That's about the extent of what they have in common.

deleted 9y ago

[deleted]

sodafountan 9y ago

If you don't understand technology you're not going to understand crypto-currency, that's the point.

TheAdamAndChe 9y ago
This is wrong. You don't need to understand hashing and network algorithms to understand supply and demand. There's a fixed supply of bitcoins and a rising demand due to speculation. Anyone can see that that this is what is driving the growth, but blind speculation is how bubbles form, and bubbles always pop. Here[1] are the signs of asset bubbles. I've posted the signs I feel are most relevant to Bitcoin below. > Rationalizing borrowing, lending and purchase decisions based on expected future price increases rather than the ability of the borrower to repay. > Rationalizing asset prices by increasingly weaker arguments, such as "this time it's different" or "housing prices only go up." > A high presence of marketing or media coverage related to the asset. [1] https://en.wikipedia.org/wiki/Economic_bubble#Identifying_asset_bubbles https://en.wikipedia.org/wiki/Economic_bubble#Identifying_as...

rytill 9y ago

Compare it to something else then.

diab0lic 9y ago
Houses in 2008 where valuation was driven more by hype than some intrinsic value. Tech stocks in 2000 when the same thing happened. Or everyone's favorite tulips. I know people hate to hear this but unless you have a target price and a rational explanation as to why it's worth that much you're just gambling.

dominotw 9y ago

I was always curious about his stance with tech, why "he doesn't understand them well enough." ? What about them that he doesn't understand that he can with non-tech stocks.

diab0lic 9y ago
His game is identifying undervalued assets. If you're not confident you know how to value the asset you can't identify undervalued ones. I guess the point I was getting at was valuing a tech stock and valuing a crypto have little to do with one another. One is a business (which might be used as a speculative vehicle) while the other is a speculative vehicle. EDIT: More specifically anything with as much hype as crypto (and tech to a lesser extent) is not really in the value investing camp in which Buffet is trading. Avoiding them entirely is a very useful heuristic for him.

deleted 9y ago

[deleted]