Bitcoin is still early

[NapoleanDynamite]

Perhaps it’s triggering because the facts are in opposition to your world view.

The only way to make make money or receive cashflows from Bitcoin (or any other speculative investment) is for its price to go up and for you to sell it.

That’s not the case for stocks, bonds, or real estate.

No...it is triggering because people only use the word to argue against what their view is. For example, "I don't agree with you buying gold because it is a speculative asset." Or "I don't agree with you buying stocks or real estate because it is too speculative." They are just idiotic statements. I have seen them both stated in the past.

A bond, stock or real estate can return a dividend/rent etc but still have a net negative return. It actually happens all the time.

If you buy a bond that returns 2% and M2 is 10% and CPI are 10% you have negative real return. If your $100,000 rental home returns you 100 dollars a month for 3 years, but the house loses 20% of it's value when you sell it after 3 years, you are negative about 16%. If your dividend fund returns 1% but drops in value by 15% over 5 years, you have a negative return. It is all speculation that things will go up. There is literally no asset class with a guaranteed return. They are all speculative.

Some have less risk and some have more risk based on historical data. You can argue that Bitcoin has a much higher risk of a negative return. You can argue that real estate or stocks are in a "bubble" and have a high risk of a negative/lower return. But conflating risk with speculation is just grammatically wrong IMO.

Oh well...Probably just my Asperger's kicking in.

[jacoavlu]

That's not what I'm talking about, and I think you know that.

What I'm saying is that it's just denial of the facts to pretend that putting money in Bitcoin (or art, or wine, or whatever other non-productive asset) is equally as speculative (or as not speculative, take your pick) as putting money in stocks, bonds, or real estate.

Nothing more, nothing less.

not disagreeing with you

[bovie]

But conflating risk with speculation is just grammatically wrong IMO.

I'm not talking about risk, per se. I'm talking about mechanism of return.

A speculative asset can only provide return via sale of the asset at a higher price than that at which it was purchased. It's as simple as that.

Does that also inherently make putting money into a speculative asset more risky? If there is no fundamental reason why the asset price should reliably be expected to increase, then yes, it does.

Now, there are pages and pages here on whether this fundamental reason exists for Bitcoin. That's not my concern, and I'm making no assertion in that regard.

I'm simply stating that something which can only provide return via sale of the asset at a higher price than that at which it was purchased is, by definition, speculative.

As far as conflation of grammar (which, to be precise, is actually diction, not grammar) goes: Investment concerns both price appreciation and income, whereas speculation concerns only price appreciation.

[jacoavlu]

I'm not talking about risk, per se. I'm talking about mechanism of return.

A speculative asset can only provide return via sale of the asset at a higher price than that at which it was purchased. It's as simple as that.

Does that also inherently make putting money into a speculative asset more risky? If there is no fundamental reason why the asset price should reliably be expected to increase, then yes, it does.

Now, there are pages and pages here on whether this fundamental reason exists for Bitcoin. That's not my concern, and I'm making no assertion in that regard.

I'm simply stating that something which can only provide return via sale of the asset at a higher price than that at which it was purchased is, by definition, speculative.

As far as conflation of grammar (which, to be precise, is actually diction, not grammar) goes: Investment concerns both price appreciation and income, whereas speculation concerns only price appreciation.

opinion on BRK then?

[bovie]

opinion on BRK then?

Owns companies which provide income.

[jacoavlu]

Owns companies which provide income.

but is buying BRK speculative?

[bovie]

but is buying BRK speculative?

No, because you are buying shares of an asset which produces income.

Now, the income doesn't go directly to you in the form of a dividend or any other sort of payment--in the same way that buying shares of GOOGL or AMZN doesn't directly provide you income--but the shares for all three examples represent ownership of an income-producing entity.

I think you can easily see the distinction between this and, say, gold, Bitcoin, empty land, or a company with no product or revenue.

[jacoavlu]

No, because you are buying shares of an asset which produces income.

Now, the income doesn't go directly to you in the form of a dividend or any other sort of payment--in the same way that buying shares of GOOGL or AMZN doesn't directly provide you income--but the shares for all three examples represent ownership of an income-producing entity.

I think you can easily see the distinction between this and, say, gold, Bitcoin, empty land, or a company with no product or revenue.

I agree with you

how about Twitter Inc?

(Its a silly conversation, which of course you didn’t bring up)

[bovie]

I agree with you

how about Twitter Inc?

(Its a silly conversation, which of course you didn’t bring up)

My asset allocation would be 100% TWTR were it not delisted.

[jacoavlu]

My asset allocation would be 100% TWTR were it not delisted.

negative income tho

[bovie]

negative income tho

Income from ads (but surely less than prior). And perhaps some sort of subscription? Honestly haven't been following.

But even still, I can guarantee revenue is not $0.

And yes, silly conversation. Hence the silly answer.

[jacoavlu]

Income from ads (but surely less than prior). And perhaps some sort of subscription? Honestly haven't been following.

But even still, I can guarantee revenue is not $0.

And yes, silly conversation. Hence the silly answer.

revenue is not income of course. Net income is negative.

but clearly twitter has value, to some. Not unlike other promising but unprofitable entities

just brought up to highlight the silliness of the conversation

conversation about fundamentals always far more interesting than talk about price (or derivatives of price)


meanwhile the state is projecting US debt to GDP to continue to rise to all time highs, and to continue to rise beyond that because that is the nature of our debt based money system

[xraygoggles]

For it to drop to 10K, I think some sorts of catastrophe have to happen (Binance or some major stablecoins collapsing), but it only needs some moments of enthusiasm to go to 40K. So yes, I think the odds of BTC hitting 40K is higher than going down to 10K. I own several BTCs with a cost basis around 17K and feel comfortable holding out long-term. I would not buy BTC if it is above 20K.

Yes mainly agree that it won't drop any lower than the recent low (15k) unless we get a Binance collapse or something similar to it. Maybe if Grayscale has to market dump its GBTC and ETHE.

But in order to go to 40k, it would require increased liquidity and leverage, which seem to be leaving the ecosystem, for now at least.

[bovie]

revenue is not income of course. Net income is negative.

but clearly twitter has value, to some. Not unlike other promising but unprofitable entities

just brought up to highlight the silliness of the conversation

conversation about fundamentals always far more interesting than talk about price (or derivatives of price)


meanwhile the state is projecting US debt to GDP to continue to rise to all time highs, and to continue to rise beyond that because that is the nature of our debt based money system

Of course, just as AMZN (likely) had negative net income this year. And many other valuable companies.

But there is significant revenue and a reasonable expectation of future profits/income. No revenue (let alone income) with non-productive assets.

Agree that fundamentals are more interesting; price is just noise.

Also agree that the conversation is silly, but I think calling non-productive assets "speculative" is based on fundamental characteristics and to challenge that (not you) seems to discount the fact that "investments" are at their very core a completely different thing.

And based on simple fundamentals. This is why I pushed back with Napolean.

So if Bitcoin is not an investment, and not speculative, then I guess I don't know what it could possibly be.

Simply currency? Obviously not a good one. Consumption item? LOL.

I digress...I'm not trying to make this sillier than it already is, I promise. It was silly enough to begin with.

[jacoavlu]

So if Bitcoin is not an investment, and not speculative, then I guess I don't know what it could possibly be.

Simply currency? Obviously not a good one. Consumption item? LOL.

easiest to just think of bitcoin as money. If someone wants to argue why it’s not money I’m happy to listen

(I would not disagree with someone saying that going long bitcoin is speculation, I just don’t think it particularly matters)

also to keep it silly, how is “an investment” defined?