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This makes me invest in crypto even harder. It is the natural extension of this rule. Crypto is more risky than stocks but the greater yields vs. stocks more

This makes me invest in crypto even harder. It is the natural extension of this rule. Crypto is more risky than stocks but the greater yields vs. stocks more than make up for it. You can say "you could lose it all in crypto" but that's what the bond people say about stocks and the math is showing that to be completely backwards. Opportunity cost is the real killer.

icebraining 9y ago
greater yields Are they? What's the average yield across the whole cryptocurrency market vs the US stock market?
- gfodor 9y ago
  It's very odd to hear the term "yield" be used to describe capital gains. Typically this term means return on investment from either interest or dividend income. Ie, the "safe" part of the return. For example it would be very strange to say an investment had negative yield (though it might have negative return), since yield is the money the investment "throws off" to the investor. If you are never planning to liquidate the investment, yield (and potential changes to it) is your primary concern. The only valid form of yield in crypto I think is earnings due to Proof of Stake deposits.
icelancer 9y ago
>> greater yields Past performance is no indicator of future returns. I am long cryptocurrency as well but the main attraction from an investment standpoint into cryptocurrency is twofold: 1) Volatility is incredibly high (useful for various reasons; does not come without a downside, also obviously) 2) Yield curves of US equities are trash A portfolio that is predominantly cryptocurrency is... pretty silly. It would be hard to reasonably argue against a majority share of equities and basic portfolio advice from someone like Buffett, with heavier weighting on higher variance items like cryptocurrency.
tim333 9y ago
I've been punting crypto a little, bearing in mind Buffett/Grahams Mr Market story where "... the more manic-depressive his behavior, the better for you." It's hard to find more nutty market behavior than with crypto. I daresay Buffett is bearish on crypto and has said he would buy 5 year puts on the whole lot if he could. (http://www.alphavest.com/an-essay-on-ben-grahams-mr-market-by-warren-buffett/ http://www.alphavest.com/an-essay-on-ben-grahams-mr-market-b...)

icebraining 9y ago

greater yields Are they? What's the average yield across the whole cryptocurrency market vs the US stock market?

gfodor 9y ago
It's very odd to hear the term "yield" be used to describe capital gains. Typically this term means return on investment from either interest or dividend income. Ie, the "safe" part of the return. For example it would be very strange to say an investment had negative yield (though it might have negative return), since yield is the money the investment "throws off" to the investor. If you are never planning to liquidate the investment, yield (and potential changes to it) is your primary concern. The only valid form of yield in crypto I think is earnings due to Proof of Stake deposits.

icelancer 9y ago

>> greater yields Past performance is no indicator of future returns. I am long cryptocurrency as well but the main attraction from an investment standpoint into cryptocurrency is twofold: 1) Volatility is incredibly high (useful for various reasons; does not come without a downside, also obviously) 2) Yield curves of US equities are trash A portfolio that is predominantly cryptocurrency is... pretty silly. It would be hard to reasonably argue against a majority share of equities and basic portfolio advice from someone like Buffett, with heavier weighting on higher variance items like cryptocurrency.

tim333 9y ago

I've been punting crypto a little, bearing in mind Buffett/Grahams Mr Market story where "... the more manic-depressive his behavior, the better for you." It's hard to find more nutty market behavior than with crypto. I daresay Buffett is bearish on crypto and has said he would buy 5 year puts on the whole lot if he could. (http://www.alphavest.com/an-essay-on-ben-grahams-mr-market-by-warren-buffett/ http://www.alphavest.com/an-essay-on-ben-grahams-mr-market-b...)