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When you see people you think are not as smart as you get rich via crypto, it is very natural to think that you should go at it, too. Fortunately, about 10-12 y

When you see people you think are not as smart as you get rich via crypto, it is very natural to think that you should go at it, too. Fortunately, about 10-12 years of stock market investing showed me a lot of patterns. There will be stories, there will be wondrous companies that seem to grow magically and yet what lies beneath is most critical. Cash flow and the embedded estimate in the market cap vis-a-vis this cash flow (reverse DCF). W.r.t crypto, I never could fathom a cash flow or what a certain value for a bitcoin actually represented. I took a pass (probably my profits would have been 3x at max with BTC at $20k) , but useful to remember this when another new fangled thing makes others rich.

blablabla123 4y ago
True... Also in the stock trading community I think crypto has always been seen with suspicion if not even as pure pump and dump. (Although the original goals seem interesting, speaking of an inflation defying currency. It's hard to imagine the problem wouldn't pop out elsewhere)
redox99 4y ago
> Fortunately, about 10-12 years of stock market investing showed me a lot of patterns. Fortunately in what sense? You're talking as if BTC was worth nothing. 19K is still a really good price if you zoom out. I understand young people whose first investment was BTC 1 year ago and bought at 60k and are -70%. But if you have been investing for 10+ years as you mention then there's nothing fortunate about not having bought BTC.
- srean 4y ago
  If one had invested in the right lottery ticket that too would fetch a pretty good price.
  - redox99 4y ago
    Are you implying that Bitcoin only had a 1 in a thousand or 1 in a million chance of it's price blowing up, and it got lucky? As in, the outcome comes out of pure randomness (think chaos theory)?
- imustbeevil 4y ago
  The median price of Bitcoin over the last 3 years is $20,471. That means, today, half of the people who bought in the last 3 years are down. Yes, you could have bought Amazon stock in 2001. But if you're trying to judge rational investment strategy, 3 years of most people losing money sounds like a pretty significant figure. For reference, the S&P (boring market index) 3 year return is +50%. https://www.statmuse.com/money/ask/what%27s+the+median+price+of+bitcoin+in+the+last+3+years https://www.statmuse.com/money/ask/what%27s+the+median+price... https://ycharts.com/indicators/sp_500_3_year_return https://ycharts.com/indicators/sp_500_3_year_return
  - sumy23 4y ago
    When the price is higher, it’s likely more people were buying (more demand = higher prices). So if the media price is 20k, likely more than half lost money.
    - deleted 4y ago
      [deleted]
  - redox99 4y ago
    > The median price of Bitcoin over the last 3 years is $20,471. That means, today, half of the people who bought in the last 3 years are down. To be more specific there, the people that are down in that 3 year time range are only those that bought since DEC 2020 (so 1.5 years ago). But even if you ignore that, that doesn't sound bad at all. It makes no sense to compare to the SP500, of course the 500 largest companies combined are less volatile. Keep in mind something like NASDAQ 100 took like 10 to 15 years to recover after dotcom, and even QQQ isn't comparable to something as volatile as crypto. I think something like TQQQ is the most comparable, and they overlap quite a bit. But going back to what I was commenting, my point was that if I was a 10+ year investor as parent said, I would not feel fortunate about not having bought bitcoin throughout my years. Of course very recent years are different.
    - imustbeevil 4y ago
      > But going back to what I was commenting, my point was that if I was a 10+ year investor as parent said, I would not feel fortunate about not having bought bitcoin throughout my years. Of course very recent years are different. That's exactly the point. Most investors are happy to not have gambled on cryptocurrency over the last 10 years. That's why their money is in USD and not Casino Chips. You're only looking at the outcome. You don't control the outcome. What you control is your methodology for your deployment of capital. If you regret not investing in Bitcoin because you've established some new thesis, then now is the time to employ that thesis. But if you regret not gambling because someone else hit 00 and got 35 to 1, that's not investing.
- vmurthy 4y ago
  >Fortunately in what sense? You're talking as if BTC was worth nothing. 19K is still a really good price if you zoom out. Fortunate in the sense that I learnt that the only way to reliably value any asset is to calculate cash-flows -- for me anyway. There are a million things (BTC,ETH whatever) in which you can invest and some of them will make money but I learnt these weren't for me because I can neither predict how high/low something can go > I understand young people whose first investment was BTC 1 year ago and bought at 60k and are -70%. But if you have been investing for 10+ years as you mention then there's nothing fortunate about not having bought BTC. Investing in company stocks that I somewhat understand, yes. Fortunate about not having bought BTC .. well. I don't seem to understand how BTC can be worth anything at all so I didn't/won't :)

blablabla123 4y ago

True... Also in the stock trading community I think crypto has always been seen with suspicion if not even as pure pump and dump. (Although the original goals seem interesting, speaking of an inflation defying currency. It's hard to imagine the problem wouldn't pop out elsewhere)

redox99 4y ago

> Fortunately, about 10-12 years of stock market investing showed me a lot of patterns. Fortunately in what sense? You're talking as if BTC was worth nothing. 19K is still a really good price if you zoom out. I understand young people whose first investment was BTC 1 year ago and bought at 60k and are -70%. But if you have been investing for 10+ years as you mention then there's nothing fortunate about not having bought BTC.

srean 4y ago
If one had invested in the right lottery ticket that too would fetch a pretty good price.
- redox99 4y ago
  Are you implying that Bitcoin only had a 1 in a thousand or 1 in a million chance of it's price blowing up, and it got lucky? As in, the outcome comes out of pure randomness (think chaos theory)?
imustbeevil 4y ago
The median price of Bitcoin over the last 3 years is $20,471. That means, today, half of the people who bought in the last 3 years are down. Yes, you could have bought Amazon stock in 2001. But if you're trying to judge rational investment strategy, 3 years of most people losing money sounds like a pretty significant figure. For reference, the S&P (boring market index) 3 year return is +50%. https://www.statmuse.com/money/ask/what%27s+the+median+price+of+bitcoin+in+the+last+3+years https://www.statmuse.com/money/ask/what%27s+the+median+price... https://ycharts.com/indicators/sp_500_3_year_return https://ycharts.com/indicators/sp_500_3_year_return
- sumy23 4y ago
  When the price is higher, it’s likely more people were buying (more demand = higher prices). So if the media price is 20k, likely more than half lost money.
  - deleted 4y ago
    [deleted]
- redox99 4y ago
  > The median price of Bitcoin over the last 3 years is $20,471. That means, today, half of the people who bought in the last 3 years are down. To be more specific there, the people that are down in that 3 year time range are only those that bought since DEC 2020 (so 1.5 years ago). But even if you ignore that, that doesn't sound bad at all. It makes no sense to compare to the SP500, of course the 500 largest companies combined are less volatile. Keep in mind something like NASDAQ 100 took like 10 to 15 years to recover after dotcom, and even QQQ isn't comparable to something as volatile as crypto. I think something like TQQQ is the most comparable, and they overlap quite a bit. But going back to what I was commenting, my point was that if I was a 10+ year investor as parent said, I would not feel fortunate about not having bought bitcoin throughout my years. Of course very recent years are different.
  - imustbeevil 4y ago
    > But going back to what I was commenting, my point was that if I was a 10+ year investor as parent said, I would not feel fortunate about not having bought bitcoin throughout my years. Of course very recent years are different. That's exactly the point. Most investors are happy to not have gambled on cryptocurrency over the last 10 years. That's why their money is in USD and not Casino Chips. You're only looking at the outcome. You don't control the outcome. What you control is your methodology for your deployment of capital. If you regret not investing in Bitcoin because you've established some new thesis, then now is the time to employ that thesis. But if you regret not gambling because someone else hit 00 and got 35 to 1, that's not investing.
vmurthy 4y ago
>Fortunately in what sense? You're talking as if BTC was worth nothing. 19K is still a really good price if you zoom out. Fortunate in the sense that I learnt that the only way to reliably value any asset is to calculate cash-flows -- for me anyway. There are a million things (BTC,ETH whatever) in which you can invest and some of them will make money but I learnt these weren't for me because I can neither predict how high/low something can go > I understand young people whose first investment was BTC 1 year ago and bought at 60k and are -70%. But if you have been investing for 10+ years as you mention then there's nothing fortunate about not having bought BTC. Investing in company stocks that I somewhat understand, yes. Fortunate about not having bought BTC .. well. I don't seem to understand how BTC can be worth anything at all so I didn't/won't :)