Where’s the Big Gain? Where’s the home builder priced at less than it is worth? Where’s the industry that the Fed’s interest rate manipulation missed? Where is a stock that might go up?
The "Big Gain" on a product like an off the wall crypto coin is through speculation. If party A buys a coin for one cent and sells it to party B for one dollar, party A makes 100% on the transaction. If party B then attempts to sell, but has no buyers, he has a 100% loss.
If party B has no intention of selling the coin, but desires to hold it as a memento, party B would rather hold the coin than the dollar. He considers the coin worth more than the dollar.
Attempting to profit on such products is a pure speculative endeavor, not to be confused with an investment. The dollar in the above transaction doesn't disappear, it just changes hands.
Question - cryptos don't exist in the real world. They are only essentially "x"s and "o"s (or digital). Yes, Yes, I know there are a few "Bitcoins" embedded with BTC value - but really? Why would anyone keep it as a Memento? To what? If you are from California and of a certain physical age - like keeping a note from a Pyramid Party.
SE, you don't miss much. If you are missing anything in this current example, you are possibly missing that "investing" is a rigged game. At least for the everyman. Reluctantly and sadly, this is the conclusion I reached 30 years ago. It is also a long-haul proposition (the "miracle" of compounding). Few of us here have that prospect anymore. I spent the bulk of my career in sales and marketing. The idea in sales is residuals, either in the form of recurring business or in a "tappable" client base, and these for the purpose of enjoying return on investment of time and energy. As my son tells me, "Dad, that was fine for making a living, but your contribution was talent, and that's not scalable. If it can't be scaled up, you can't make big money. It only works if I can find 100 of you, and that's not possible." Best always. PM
A comment - been lurking around Ol' Bill's swamp here for many a year as you have PM. Hard to believe the World is ready for 100 of ya'll. Just saying.......
Paul. Regarding BB’s home builder example, the way I see it, if the Fed lowering interest rates causes Mr. Builder’s market value to increase, it’s because Mr. Market sees potential in Mr. Builder expanding home sales as Mr. Home Buyer’s purchasing power increases. It has nothing to do with real value, but only perceived value. If Mr. Builder disappoints Mr Market, he will eventually be punished. Mr. Market is betting he can roll those dice 20 or 30 times before busting. What am I missing here??? KJ
Go to Vegas and learn the math on real money very quickly. Screw all the distractions and go to a real-life game: craps. The basic operational principle of craps is propositionally binary: the dice will either bring up "seven" or they won't. If I put $10 on the "pass line", and I throw "seven", I get $10 on my original bet of $10. Suddenly, where there was $10, now there's $20. It's concrete and real, not "on paper" and not in "cyberspace", and it's right there on the table. It's mine, right there, right now, and everyone knows that and acknowledges it. My investment just went from 10 "houses" to 20 "houses". I liked that arrangement, so now I can do one of three things: pass the dice and walk away with 10 new "houses" in my pocket; I can put my original 10 houses in my pocket, and play/invest with my new 10 houses, or I can let the 20 (combined old and new) houses "ride", throw "seven" again, and "magically" turn the 20 houses into 40 houses! This is oversimplification to illustrate a situation, but if I throw "seven" again, I am into geometric compounding, and isn't this wonderful? But sooner or later, I'm going to throw the "opposite" of seven, meaning two, three, or twelve, and I'll not only lose my "new" houses, but also my original ten. Yoikes! Now the kicker: I don't know when or if that will be. Double yoikes! All I know is the scenario, but not the result. I've been on the winning end before. I actually have thrown "seven" three times in a row, twice even, but I've been on the losing end more. Going in, I know that is likely, but it's still painful nonetheless. Best always. PM
Role the dice . Win or lose. I see what You say. And I think this is how much of the world works. It is a crap shoot. The best thing. I think is to own a business that will supply the goods that people need. Yes this is like gambling. Can I offer any knowledge to any Young person? Probably not as experience seems to be the best teacher.
There's two types of dice-rolling: informed and uniformed. But even in an informed circumstance, the odds are always against you. Still, it is amazing to me how many people (the vast majority) will throw those dice in uninformed circumstances. Best always. PM
Then there are those of Nancy Pelosi's ilk. What an absolutely amazing stock picker she is - especially considering she has a full time job of representing the good people of San Francisco keeping America on the straight and narrow. But, Lordy, she has amassed over a $42M estate based on stock tips from the shoe shine station in the Capitol. Now that is PURE GENIUS.
Why Bill - don’t you know UNCLE REMUS has been POLITICALLY UNCORRECT for some time now? Keep up the good work. Bottom line - all cryptos are in essence a high tech Ponzi scheme - nothing more - nothing less.
The stock market is so so overvalued, it is hard to find anywhere to invest right now outside of physical gold and gold streamers.
The "Big Gain" on a product like an off the wall crypto coin is through speculation. If party A buys a coin for one cent and sells it to party B for one dollar, party A makes 100% on the transaction. If party B then attempts to sell, but has no buyers, he has a 100% loss.
If party B has no intention of selling the coin, but desires to hold it as a memento, party B would rather hold the coin than the dollar. He considers the coin worth more than the dollar.
Attempting to profit on such products is a pure speculative endeavor, not to be confused with an investment. The dollar in the above transaction doesn't disappear, it just changes hands.
Question - cryptos don't exist in the real world. They are only essentially "x"s and "o"s (or digital). Yes, Yes, I know there are a few "Bitcoins" embedded with BTC value - but really? Why would anyone keep it as a Memento? To what? If you are from California and of a certain physical age - like keeping a note from a Pyramid Party.
"The trouble is, there’s nothing there. "
Immediately followed by -
"Wealth disappears."
What am I missing, please?
SE, you don't miss much. If you are missing anything in this current example, you are possibly missing that "investing" is a rigged game. At least for the everyman. Reluctantly and sadly, this is the conclusion I reached 30 years ago. It is also a long-haul proposition (the "miracle" of compounding). Few of us here have that prospect anymore. I spent the bulk of my career in sales and marketing. The idea in sales is residuals, either in the form of recurring business or in a "tappable" client base, and these for the purpose of enjoying return on investment of time and energy. As my son tells me, "Dad, that was fine for making a living, but your contribution was talent, and that's not scalable. If it can't be scaled up, you can't make big money. It only works if I can find 100 of you, and that's not possible." Best always. PM
A comment - been lurking around Ol' Bill's swamp here for many a year as you have PM. Hard to believe the World is ready for 100 of ya'll. Just saying.......
LOL. I was lucky to get out with my skin on. Many thanks. PM
Same son who told me in 2010, "Face it, Dad: the good times are never coming back." Best always. PM
Paul. Regarding BB’s home builder example, the way I see it, if the Fed lowering interest rates causes Mr. Builder’s market value to increase, it’s because Mr. Market sees potential in Mr. Builder expanding home sales as Mr. Home Buyer’s purchasing power increases. It has nothing to do with real value, but only perceived value. If Mr. Builder disappoints Mr Market, he will eventually be punished. Mr. Market is betting he can roll those dice 20 or 30 times before busting. What am I missing here??? KJ
What are you missing? Well, in my view, you have to understand Mr. Market is The House, and The House always wins long-term. Best always. PM
Now I do not play the markets, but if 10 houses are worth 30. Then My math is terrible.
Go to Vegas and learn the math on real money very quickly. Screw all the distractions and go to a real-life game: craps. The basic operational principle of craps is propositionally binary: the dice will either bring up "seven" or they won't. If I put $10 on the "pass line", and I throw "seven", I get $10 on my original bet of $10. Suddenly, where there was $10, now there's $20. It's concrete and real, not "on paper" and not in "cyberspace", and it's right there on the table. It's mine, right there, right now, and everyone knows that and acknowledges it. My investment just went from 10 "houses" to 20 "houses". I liked that arrangement, so now I can do one of three things: pass the dice and walk away with 10 new "houses" in my pocket; I can put my original 10 houses in my pocket, and play/invest with my new 10 houses, or I can let the 20 (combined old and new) houses "ride", throw "seven" again, and "magically" turn the 20 houses into 40 houses! This is oversimplification to illustrate a situation, but if I throw "seven" again, I am into geometric compounding, and isn't this wonderful? But sooner or later, I'm going to throw the "opposite" of seven, meaning two, three, or twelve, and I'll not only lose my "new" houses, but also my original ten. Yoikes! Now the kicker: I don't know when or if that will be. Double yoikes! All I know is the scenario, but not the result. I've been on the winning end before. I actually have thrown "seven" three times in a row, twice even, but I've been on the losing end more. Going in, I know that is likely, but it's still painful nonetheless. Best always. PM
PM...excellent analogy.
Role the dice . Win or lose. I see what You say. And I think this is how much of the world works. It is a crap shoot. The best thing. I think is to own a business that will supply the goods that people need. Yes this is like gambling. Can I offer any knowledge to any Young person? Probably not as experience seems to be the best teacher.
There's two types of dice-rolling: informed and uniformed. But even in an informed circumstance, the odds are always against you. Still, it is amazing to me how many people (the vast majority) will throw those dice in uninformed circumstances. Best always. PM
Then there are those of Nancy Pelosi's ilk. What an absolutely amazing stock picker she is - especially considering she has a full time job of representing the good people of San Francisco keeping America on the straight and narrow. But, Lordy, she has amassed over a $42M estate based on stock tips from the shoe shine station in the Capitol. Now that is PURE GENIUS.
Or cattle futures....Best always. PM
That is one thing that makes life interesting. Never a dull moment.
Why Bill - don’t you know UNCLE REMUS has been POLITICALLY UNCORRECT for some time now? Keep up the good work. Bottom line - all cryptos are in essence a high tech Ponzi scheme - nothing more - nothing less.
Tom , thanks for recos. I was hungry w/ lotsa dry powder🤪
You can visit Alang on Google Maps without wading in oil sludge.
Tom knows that but wants to visit India AND write off the cost. That’s the best way to travel.
For those who can't make it to Alang, I found a good documentary last week on Youtube.