Investing 102

[Woody]

Originally Posted by Tony_SS

Hi Woody. I never meant this to be Bitcoin vs Stocks or anything. Like Greg said, Bitcoin is a digital currency. Just like the dollar, its backed by nothing more the the people who use its. The main difference is that Bitcoin can not be artificially distorted by central banking manipulation. It's a peer to peer, open source user driven system. I knew about them and was very skeptical when they were $1 each. When I brought them up here, they were $70. Today they are busting out at $104. This is a direct result of the outright theft that has occurred to the people of Cyprus having their money outright stolen from the Banks they kept their money in. All of EU is debt to the same bankers. Bitcoin at $103 today is still a GREAT deal, I believe, as this mess is only going to get worse in the EU, and people are looking for other options.

As far as Bitcoin being something for "fun" I would agree! But its very real. It valued at more that alot of sovereign currencies are! It's total value topped $1 billion and soon could rival the dollar and euro. And you can always exchange back into dollars at any time just like any other currency. Of course to dive in you need to be tech savy and that right there turns a lot away, or scares them. But we all know the role technology is playing in this future.

As for stocks, the people I listened to seen it coming. I sold my home right before the bust. Because I listened to all the people the "stock" shows were calling "Crazy"... I listen to the guys who proved themselves right by calling out where these bubbles are. They are saying the same thing about the stock market.. it's very much an illusion that's being propped up. We are simply on bought time at this point.

Greg you should just go for some Bitcoin... Get in and out, now is the time... then kick yourself later for now staying in!

Tony,

I am showing my ignorance about bitcoin because I never did any research before posting. You were discussing in an earlier post how bitcoin moved up from a few cents to $70+ so I was just assuming it was a stock. Just for my knowledge how is bitcoin traded? I know it is not a currency future. Does it trade on an exchange?

I have nothing against speculation as I have done my fair share of speculating in the futures and options markets, but when you were discussing the stock market being risky, it appeared to me that you were comparing bitcoin to be on the same risk scale as the stocks we have been discussing in this thread.

I don't disagree that the stock market is a little scary to invest in after it has run up so much. However, I do not believe in the doom and gloom predictions some are making now. I have seen too many of these guys make claims that they called the top before. In reality, they called the top 2000 points ago and have been wrong for a long time. When the market finally does correct, and it will, they will say that they were right and called the top, but they won't tell you that they have been calling for a top for the last year all the while the market kept going higher. It like the saying "a broken clock is right twice a day".

The other thing I have learned is that sometimes, some of these so-called gurus actually make a pretty good prediction and hit the timing right. Then everyone thinks that this guru knows everything and follows every word they say. The problem is, they are usually never right again.

Just my opinions, not trying to start an argument. I have been pretty silent for a while and thought I might like to be a bit more involved in the discussions for the time being.

[GregWeld]

I was fooling around in my Schwab account this morning - just kind of reviewing the quarter that just finished (January / February / March) and compared some of the names I own in this account vs the Benchmark S&P 500

We always are talking about "investing" vs trading vs gambling etc -- so I find real actual numbers to do the talking vs the "I think" kind of statements...


Large Company - Benchmark S&P 500 46.21%



AT&T (T) has a 3 year cumulative return of 71.75%


Altria (MO) " " " " 98.93%


American International Group (AIG) " 84.76%


Consolidated Edison (ED) " " 57.79%


Kinder Morgan Partners (KMP) " 62.77%



Small Company uses the Russell 2000 Benchmark -- 50.94%



National Retail Partners (NNN) " 92.61%


StoneMor Partners LP (STON) " 69.36%


There's a few more in my personal account - but you get the drift.... it's too much typing to do them all... and by the way NONE of these are recommendations for anyone to own - they're just examples from my own account. If you have a Schwab account you can find this info for your own stocks and might find it interesting to see how you're doing versus a benchmark.

This is THREE STINKING YEARS.... and while none have actually doubled a couple are close. So beating a dead horse.... do you really need to gamble to make a few bucks? Will these numbers "hold" going forward? Who knows....
Have we had an extraordinary run since 2008.... Yeah... but we also went down "too much" so we have to average back up. Over the longer terms - we want good steady averages - and we shouldn't get caught up in the bumps and lumps along the way.

[Tony_SS]

Originally Posted by GregWeld

Tony --- I've been IN the stock market and other investments for some 30 odd years now. I've been up and I've been down... but mostly I've been retired since I was 41 (I'll be 60 this summer) and I live a pretty nice lifestyle. I think I'll just keep doing what I'm doing.

Brawk, brawk.

$108 today! (we will see $110 here soon)

Originally Posted by Woody

Tony,

I am showing my ignorance about bitcoin because I never did any research before posting. You were discussing in an earlier post how bitcoin moved up from a few cents to $70+ so I was just assuming it was a stock. Just for my knowledge how is bitcoin traded? I know it is not a currency future. Does it trade on an exchange?

It trades between individuals. There are miners (using software to "create" bitcoins, and there are buyers and traders. So someone like you or me are better off just buying them. Later you can sell them off, cash them out, or just keep them. They are literally a virtual currency. It's value comes from miners and people buying them (available). The interesting thing is, they can not be inflated. There is only a fix amount 21 million. So once they're gone, that would be it. Scarcity is built in, unlike the dollar/euro, where that is created by central banking and diluted.

I have nothing against speculation as I have done my fair share of speculating in the futures and options markets, but when you were discussing the stock market being risky, it appeared to me that you were comparing bitcoin to be on the same risk scale as the stocks we have been discussing in this thread.

I didn't really want to compare one between the other.. they are different, both hold pros and cons, both hold risks.

I don't disagree that the stock market is a little scary to invest in after it has run up so much. However, I do not believe in the doom and gloom predictions some are making now. I have seen too many of these guys make claims that they called the top before. In reality, they called the top 2000 points ago and have been wrong for a long time. When the market finally does correct, and it will, they will say that they were right and called the top, but they won't tell you that they have been calling for a top for the last year all the while the market kept going higher. It like the saying "a broken clock is right twice a day".

The other thing I have learned is that sometimes, some of these so-called gurus actually make a pretty good prediction and hit the timing right. Then everyone thinks that this guru knows everything and follows every word they say. The problem is, they are usually never right again.

Just my opinions, not trying to start an argument. I have been pretty silent for a while and thought I might like to be a bit more involved in the discussions for the time being.

I've been listening to guys like Tom Woods, Peter Schiff, Ron Paul. These guys arent "stock" market guys really. Peter Schiff owns Euro Pacific Capital, but they are more Austrian economists who study monetary policy, and how markets react to that. All of them predicted the housing bubble and are giving us warnings about the dollar/euro. Their view is that you can't have this artifiical growth, create this massive bubble and have that correct the economy. Sort of like spending money to get out of debt, it doesn't work. So they think the dollar is being diluted, the market is being pumped up once again, the growth is an unsustainable, unnatural bubble that will pop once again. I happen to agree with that. There are a lot of countries getting out of the dollar. Because of all that, I think its wise to diversify in other things like Bitcoin, holding precious metals, property, etc. Just my .0002 bitcoins.

[Tony_SS]

Here's an article today from Peter Schiff about the market situation

Flying High on Borrowed Wings
http://lewrockwell.com/schiff/schiff214.html

And for anyone who's never heard of him, here's a classic video mash up of him telling the future, not many were listening.