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> There is no better indication of a bubble then people telling you that you're the crazy one for questioning it. I remember people telling me I was crazy for n

> There is no better indication of a bubble then people telling you that you're the crazy one for questioning it. I remember people telling me I was crazy for not buying a house in 2007, and crazy for not trading tech stocks in 1999. I'm not sure that's a good indicator with so many counter examples: the internet, large touch screen phones, Cloud in the earlier days, etc. We truly have no idea what the future if Cryptocurrencies are.

vesinisa 6y ago
> We truly have no idea what the future of X is What an excellent reason not to invest in X!
- cortesoft 6y ago
  That is what risk is.... not knowing. If you want high reward from an investment, you need to take high risks, which means you will invest without knowing something. Now, some risks are smarter than others...
  - fractionalhare 6y ago
    That's not necessarily a good idea. You don't need to take on higher risk for a higher return. It's usually better to leverage risk-adjusted returns rather than chase high total returns with commensurate risk. You can take on more risk that if you have the appetite, but if that's the case you could also just use levered beta (e.g. 3x levered S&P 500). This would significantly improve your portfolio while still being fundamentally much easier to understand than a novel asset. If your portfolio has a decent risk adjusted return and very low volatility and beta exposure, it's safer to just leverage it up to the same risk as the S&P 500. This reduces the chance of you blowing up your capital in the long run. I would argue there are very few investment goals for which extreme risk is sound (especially if it's unhedged!).
    - anythingdude321 6y ago
      if you leverage your risk for a higher return you _also_ increase your risk
      - fractionalhare 6y ago
        Yes, but you can choose how much risk to take on using your leverage weight. You don't have to accept the baseline risk of the inherently riskier asset. It's easier to start with a less risky portfolio and weight it accordingly than it is to derisk a portfolio which is intrinsically riskier.
    - acituan 6y ago
      > You don't need to take on higher risk for a higher return The lower the risk of an instrument, the more it will be saturated with investors, the more thinly per-investor share of profit will be spread. Therefore there is no such thing as "low risk, high returns", unless it is a scam. There is no unexploited profit opportunity that is risk free, if one thinks they have found one, they must have just missed accounting for the hidden risks.
      - fractionalhare 6y ago
        I didn't say "low risk, high returns." It is a spectrum. What you've said in your first two sentences sounds fine as a textbook principle. But the real world is messier and opportunities don't just vanish: if you do the math on a basic risk parity strategy with the S&P and some uncorrelated ETF, you can see it will beat the market on a risk adjusted basis. Very often you can then leverage this up to a higher absolute return than SPY while keeping lower volatility and beta overall. > There is no unexploited profit opportunity that is risk free This is essentially encapsulated by a Sharpe ratio (among other things). On the contrary, it is not especially difficult to produce a relatively high Sharpe ratio, accounting for transaction and margin costs, if you don't have a large amount of money to invest (large means single digit billions or more). This is especially, but not exclusively, the case if you don't care to compound your returns.
the_gastropod 6y ago
Bitcoin has been around for about a decade now. It didn’t take anywhere near that long for the internet, large touch screen phones, the cloud, etc. to really catch on. And for every technological advance met with skepticism that eventually succeeded, there are orders of magnitude more that crashed and burned (e.g., the segway, 3D televisions, HD DVD, and countless others)
- feanaro 6y ago
  > Bitcoin has been around for about a decade now. It didn’t take anywhere near that long for the internet That's not true, as is obvious with only basic fact checking. Apart from it not being obvious what you mean by "internet" (does ARPANET count?), the internet proper saw its first commercial access providers appear in 1989[1] and it certainly was nowhere near popular in 1999 as it is now. In fact, I would say the change from that period is almost fundamental. Remember, 56k modems were popular back then and a very small part of the world's population had internet access. My point is, this certainly fits into the larger picture of where Bitcoin is right now. It's vastly more popular then 10 years ago, because now my plumber and barber ask me about it, it is regularly talked about in the news and there are almost no countries without laws enacted as a response to it. [1]: https://www.rogerclarke.com/II/OzI04.html#CIAP https://www.rogerclarke.com/II/OzI04.html#CIAP
  - the_gastropod 6y ago
    > the internet proper saw its first commercial access providers appear in 1989[1] and it certainly was nowhere near popular in 1999 as it is now The internet had 248 Million users in 1999 [1] Bitcoin has, estimating very liberally ~28M users worldwide [2]. > It's vastly more popular then 10 years ago, because now my plumber and barber ask me about it, it is regularly talked about in the news and there are almost no countries without laws enacted as a response to it. Nobody's disputing that. As in my previous examples, we've all heard of 3D televisions, segways, HD DVD's, 8-track, beta max, Theranos, Juicero, and tons of other laughably bad ideas. That doesn't indicate success. [1] https://www.internetworldstats.com/emarketing.htm https://www.internetworldstats.com/emarketing.htm [2] https://www.buybitcoinworldwide.com/how-many-bitcoin-users/ https://www.buybitcoinworldwide.com/how-many-bitcoin-users/
mrlala 6y ago
>We truly have no idea what the future if Cryptocurrencies are. Yes we do... Why in the utter hell would I ever use crypto that has ABSOLUTLY ZERO GUARANTEE after I pay someone?
- vntok 6y ago
  Curious, which country are you living in that doesn't have laws against fraud or theft?
  - mrlala 6y ago
    Curious, why are you being intentionally obtuse?
    - lcc 6y ago
      Have you ever paid for anything in cash? That has exactly the same guarantees.

vesinisa 6y ago

> We truly have no idea what the future of X is What an excellent reason not to invest in X!

cortesoft 6y ago
That is what risk is.... not knowing. If you want high reward from an investment, you need to take high risks, which means you will invest without knowing something. Now, some risks are smarter than others...
- fractionalhare 6y ago
  That's not necessarily a good idea. You don't need to take on higher risk for a higher return. It's usually better to leverage risk-adjusted returns rather than chase high total returns with commensurate risk. You can take on more risk that if you have the appetite, but if that's the case you could also just use levered beta (e.g. 3x levered S&P 500). This would significantly improve your portfolio while still being fundamentally much easier to understand than a novel asset. If your portfolio has a decent risk adjusted return and very low volatility and beta exposure, it's safer to just leverage it up to the same risk as the S&P 500. This reduces the chance of you blowing up your capital in the long run. I would argue there are very few investment goals for which extreme risk is sound (especially if it's unhedged!).
  - anythingdude321 6y ago
    if you leverage your risk for a higher return you _also_ increase your risk
    - fractionalhare 6y ago
      Yes, but you can choose how much risk to take on using your leverage weight. You don't have to accept the baseline risk of the inherently riskier asset. It's easier to start with a less risky portfolio and weight it accordingly than it is to derisk a portfolio which is intrinsically riskier.
  - acituan 6y ago
    > You don't need to take on higher risk for a higher return The lower the risk of an instrument, the more it will be saturated with investors, the more thinly per-investor share of profit will be spread. Therefore there is no such thing as "low risk, high returns", unless it is a scam. There is no unexploited profit opportunity that is risk free, if one thinks they have found one, they must have just missed accounting for the hidden risks.
    - fractionalhare 6y ago
      I didn't say "low risk, high returns." It is a spectrum. What you've said in your first two sentences sounds fine as a textbook principle. But the real world is messier and opportunities don't just vanish: if you do the math on a basic risk parity strategy with the S&P and some uncorrelated ETF, you can see it will beat the market on a risk adjusted basis. Very often you can then leverage this up to a higher absolute return than SPY while keeping lower volatility and beta overall. > There is no unexploited profit opportunity that is risk free This is essentially encapsulated by a Sharpe ratio (among other things). On the contrary, it is not especially difficult to produce a relatively high Sharpe ratio, accounting for transaction and margin costs, if you don't have a large amount of money to invest (large means single digit billions or more). This is especially, but not exclusively, the case if you don't care to compound your returns.

the_gastropod 6y ago

Bitcoin has been around for about a decade now. It didn’t take anywhere near that long for the internet, large touch screen phones, the cloud, etc. to really catch on. And for every technological advance met with skepticism that eventually succeeded, there are orders of magnitude more that crashed and burned (e.g., the segway, 3D televisions, HD DVD, and countless others)

feanaro 6y ago
> Bitcoin has been around for about a decade now. It didn’t take anywhere near that long for the internet That's not true, as is obvious with only basic fact checking. Apart from it not being obvious what you mean by "internet" (does ARPANET count?), the internet proper saw its first commercial access providers appear in 1989[1] and it certainly was nowhere near popular in 1999 as it is now. In fact, I would say the change from that period is almost fundamental. Remember, 56k modems were popular back then and a very small part of the world's population had internet access. My point is, this certainly fits into the larger picture of where Bitcoin is right now. It's vastly more popular then 10 years ago, because now my plumber and barber ask me about it, it is regularly talked about in the news and there are almost no countries without laws enacted as a response to it. [1]: https://www.rogerclarke.com/II/OzI04.html#CIAP https://www.rogerclarke.com/II/OzI04.html#CIAP
- the_gastropod 6y ago
  > the internet proper saw its first commercial access providers appear in 1989[1] and it certainly was nowhere near popular in 1999 as it is now The internet had 248 Million users in 1999 [1] Bitcoin has, estimating very liberally ~28M users worldwide [2]. > It's vastly more popular then 10 years ago, because now my plumber and barber ask me about it, it is regularly talked about in the news and there are almost no countries without laws enacted as a response to it. Nobody's disputing that. As in my previous examples, we've all heard of 3D televisions, segways, HD DVD's, 8-track, beta max, Theranos, Juicero, and tons of other laughably bad ideas. That doesn't indicate success. [1] https://www.internetworldstats.com/emarketing.htm https://www.internetworldstats.com/emarketing.htm [2] https://www.buybitcoinworldwide.com/how-many-bitcoin-users/ https://www.buybitcoinworldwide.com/how-many-bitcoin-users/

mrlala 6y ago

>We truly have no idea what the future if Cryptocurrencies are. Yes we do... Why in the utter hell would I ever use crypto that has ABSOLUTLY ZERO GUARANTEE after I pay someone?

vntok 6y ago
Curious, which country are you living in that doesn't have laws against fraud or theft?
- mrlala 6y ago
  Curious, why are you being intentionally obtuse?
  - lcc 6y ago
    Have you ever paid for anything in cash? That has exactly the same guarantees.