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2 hours ago, Frank Hovis said:

Ffs. The basics of investment should really be taught in schools.

The fundamental rules are:

Do not borrow to invest

Do not invest in something which you do not understand

 

These look to have been broken left right and centre for virtual currencies by novice investors these last few months.

Well, I suppose. 

But that's not the problem I'm thinking of. 

The suicides I've heard of are people that got out of bitcoin and were happy with their $5k-out-of-$100, and who then realised that they missed out on their stake being worth $500k.

Now we'll have a load of people who've not really risked much but who've become very wealthy, and who are now seeing that wealth disappear.  There's the whole 'why didn't I offload when it was worth $500k -- it's only worth $50k now'.

It would seem mad to top yourself for a missed-opportunity, but that's what will happen.

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Rich Dad Poor Dad teaches that they do not teach financial education deliberately.... Think about that for a second. If everyone was just putting money into assets, there would be no economy that relied on needless consumption.

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I was interested to see the gold price unmoved this morning in spite of the general market turmoil - I would have expected a bit of liquidation to cover losses on the markets (although maybe that is still to come). Then I remembered a lot of people rotated out of gold and into BTC, which has left me wondering a few things:

1. Is liquidating BTC still a painfully slow process?

2. If so, are there potentially a lot of retail investors out there unable to cover margin calls because they have nothing they can liquidate quickly enough?

3. Are there a lot of BTC wonderkids this morning wondering how they're going to make their next payment on the leased Audi

 

It's easy to think of BTC as an isolated bubble because it's less tangible than gold, houses or tulips. But the ramifications of losing money are the same regardless of the vehicle you used to lose it.

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2 hours ago, dgul said:

It would seem mad to top yourself for a missed-opportunity, but that's what will happen

Well I certainly hope that doesn't happen, but if anyone has that mentality, they won't get far in life. If it's not one thing, it would be another

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2 hours ago, dgul said:

Now we'll have a load of people who've not really risked much but who've become very wealthy, and who are now seeing that wealth disappear.  There's the whole 'why didn't I offload when it was worth $500k -- it's only worth $50k now'.

We are not quite there yet.

Even if you bought early last year you were sitting on a 1000%. This recent crash has shaved of 70% from 1000%.

So youre still sitting on 300%. This latest drop over the last few days has taken it from 700% to 300%, and done some damage.

Right now, its looking like there isnt going to be a bottom and its all going to evaporate. Now i really wish id offloaded it all...

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I believe the  crypto market today is just like the dot.com boom and bust.  Those with an actual purpose and provide value will survive and prosper.  Just like a Amazon and Google survived the dot.com bust  and kind off did ok since.

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11 minutes ago, montecristo said:

I just buy the dips and will be holding for months if not years.

Indeed - the point where everyone's saying 'don't touch crypto' (a month or so after everyone saying 'buy crypto!') could well be a buy signal!

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1 hour ago, JoeDavola said:

Indeed - the point where everyone's saying 'don't touch crypto' (a month or so after everyone saying 'buy crypto!') could well be a buy signal!

“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”

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2 hours ago, JoeDavola said:

Indeed - the point where everyone's saying 'don't touch crypto' (a month or so after everyone saying 'buy crypto!') could well be a buy signal!

At the moment that's just gambling (ie, there isn't any analysis other than a guess).

I'd suggest the time to enter crypto is in about 6-12 months time, when son-of-bitcoin is coming out of the woodwork, and everyone is ignoring it (and the fundamentals, investors, etc) because crypto is dead.  

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On 06/02/2018 at 07:21, One percent said:

And don’t invest what you can’t afgord to lose. 

The second two rules are why I’ve never ventured out of cash. 

Totally understandable and I know several people in RL who are exactly the same.

However for twenty years holding cash has meant that you are steadily, if slowly, losing money as inflation outstrips interest rates.

I can understand not wishing to gamble (as many view the stock market, let alone virtual currencies) but that guaranteed annual loss has got to hurt surely; your hard earned cash from 2010 that you put in a cash ISA has lost c.14% in real terms since you saved it.

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@One percent - absolutely agree with @Frank Hovis. My wages haven't gone up at the same rate as our shopping has, and inflation is pretty obvious as we buy almost exactly the same items week in week out.

My share portfolio however, has pretty much kept up with those increases, which is important if I want to live off that when I'm not working. The original 5% allocation to crypto has far outshone the rest of it too; even after all these dramatic falls, it's sitting at 40%. Have you at least considered investing a small amount?

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1 minute ago, One percent said:

Been burnt twice, three times if you factor in the way that the pension has been asset stripped....

I take a very long view on investments and have held some for nearly thirty years; I hold pretty much all equities (shares) because I am then part owning real things: mines, factories, agricultural land etc.

As politicians and economists take the view that a little inflation is a good thing, whether that be 2% or 3%, then over that thirty years, with dips and climbs along the route, the factory will be worth (just with simple multiplying rather than compounding) 60% - 90% more than thirty years ago; all things being equal.  In cash terms it will realistically have doubled in value as will my share in it.  Plus I will have been receiving dividends every year of those thirty years.  Of course some industries boom and others bust but I hold across a wide range and uness we descend to Dawn of the Dead chaos I will be gaining.

As I said there are dips and bounces; I have been notionally up or down six figure sums over a year but I take the long view and don't worry about it.  I'm not trying to find the perfect moment to cash it all in because I wouldn't know what to do with it.

I have previously referenced my friend who I would say has earned more than me over her career but as she has taken no interest in either investing or buying a house (fine if you're saving a big fund to buy one when house prices falls, not if you're not doing that) she drives a decrepit car that her mother gave her, rents somewhere small, has debts and will be working until she is seventy.  All she had to do was put in a tiny fraction of the effort that she put into work into investing and she would be absolutely sorted and better off than me.  Ah well; and there is zero point in telling her this now.  I also doubt that she has a pension but I don't wish to depress her by asking the question.

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48 minutes ago, Frank Hovis said:

I take a very long view on investments and have held some for nearly thirty years; I hold pretty much all equities (shares) because I am then part owning real things: mines, factories, agricultural land etc.

As politicians and economists take the view that a little inflation is a good thing, whether that be 2% or 3%, then over that thirty years, with dips and climbs along the route, the factory will be worth (just with simple multiplying rather than compounding) 60% - 90% more than thirty years ago; all things being equal.  In cash terms it will realistically have doubled in value as will my share in it.  Plus I will have been receiving dividends every year of those thirty years.  Of course some industries boom and others bust but I hold across a wide range and uness we descend to Dawn of the Dead chaos I will be gaining.

As I said there are dips and bounces; I have been notionally up or down six figure sums over a year but I take the long view and don't worry about it.  I'm not trying to find the perfect moment to cash it all in because I wouldn't know what to do with it.

I have previously referenced my friend who I would say has earned more than me over her career but as she has taken no interest in either investing or buying a house (fine if you're saving a big fund to buy one when house prices falls, not if you're not doing that) she drives a decrepit car that her mother gave her, rents somewhere small, has debts and will be working until she is seventy.  All she had to do was put in a tiny fraction of the effort that she put into work into investing and she would be absolutely sorted and better off than me.  Ah well; and there is zero point in telling her this now.  I also doubt that she has a pension but I don't wish to depress her by asking the question.

Completely agree with you. In one pension fund I have increased its value from £49k to £151k in 5.5 years and another from £8k to £32k in three years. Risks of course I have taken a few but they were calculated and there’s a wealth of information on-line to make self-investing worthwhile. You can’t rob yourself! I’m moving away from the multi-bags and into bluechips for the long term as at this level and if we can match the 3.5%-4% yield with an equal contribution from earnings then (divide by 72) we’ll have at least £350,000 to split. Plus a further £175k-£225k (my share of parents house). I can then tread water for 8 years (50 to 58) and hopefully FIRE with only part time work to supplement my income. If it’s too risky to invest in individual stocks then Vanguards trackers are excellent wrappers.

1 minute ago, Green Devil said:

Did anyone buy the dip then?

Only on the FTSE - on paper that wobble gave me £5k in gains. 

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9 minutes ago, Green Devil said:

Did anyone buy the dip then?

No, I had a look at lunchtime and the FTSE 100 was down less than 2%; nothing about which to get excited.

8 minutes ago, longtomsilver said:

Completely agree with you. In one pension fund I have increased its value from £49k to £151k in 5.5 years and another from £8k to £32k in three years. Risks of course I have taken a few but they were calculated and there’s a wealth of information on-line to make self-investing worthwhile. You can’t rob yourself! I’m moving away from the multi-bags and into bluechips for the long term as at this level and if we can match the 3.5%-4% yield with an equal contribution from earnings then (divide by 72) we’ll have at least £350,000 to split. Plus a further £175k-£225k (my share of parents house). I can then tread water for 8 years (50 to 58) and hopefully FIRE with only part time work to supplement my income. If it’s too risky to invest in individual stocks then Vanguards trackers are excellent wrappers.

Only on the FTSE - on paper that wobble gave me £5k in gains. 

That's the way to do it!

However I agree with @201p that governments do not publicise this because their tax revenues, now and into the future, rely upon people spending slightly above their income, borrowing and paying interest, endlessly over-consuming, and having no choice but to continue working until 70.

And this also fuels your and my gains so maybe it's no bad thing that people are unwilling or unable to think long term when it comes to money.  I ought to be applauding every shiny new expensive car I see as it's lining my pockets whilst emptying those of the driver.

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3 hours ago, Frank Hovis said:

No, I had a look at lunchtime and the FTSE 100 was down less than 2%; nothing about which to get excited.

 

I was taking about bitcoin, after all this is a bitcoin thread..

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On ‎06‎/‎02‎/‎2018 at 12:08, Green Devil said:

We are not quite there yet.

Even if you bought early last year you were sitting on a 1000%. This recent crash has shaved of 70% from 1000%.

So youre still sitting on 300%. This latest drop over the last few days has taken it from 700% to 300%, and done some damage.

Right now, its looking like there isnt going to be a bottom and its all going to evaporate. Now i really wish id offloaded it all...

Would you be interested in investing in my time machine. Its looking very promising.

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