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Vanguard Founder Jack Bogle Says ‘Avoid Bitcoin Like the Plague’

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Re: Vanguard Founder Jack Bogle Says ‘Avoid Bitcoin Like the Plague’

#41

Post by empath75 »

csomar wrote: post #12

The common sense for the wealthy investor should have been to invest 1% of his portfolio into bitcoin and other digital currencies. If he did that two years ago he'd get x15-30 returns, making Digital currencies over 10% of his portfolio. That would be the time to "cash out" or "scale out" the original investment back into traditional channels. Is it late now? I think wait a bit and then start DCA that portion of you…

> If he did that two years ago he'd get x15-30 returns.

Would he? If he put 1% of his portfolio into bitcoin, he'd have moved the bitcoin price into the 100s of thousands of dollars or millions by himself and then who would he find to buy them from him?

Re: Vanguard Founder Jack Bogle Says ‘Avoid Bitcoin Like the Plague’

#42

Post by VMG »

empath75 wrote: post #40
westurner wrote: post #4

Over the past 7 years, Bitcoin has outperformed every security and portfolio that Jack Bogle has recommended.

Only on paper, my friend. Let's see all those bitcoin holders try to realize those profits.

Isn't that true for all investments though? If all holders liquidate the price crashes.

Re: Vanguard Founder Jack Bogle Says ‘Avoid Bitcoin Like the Plague’

#43

Post by justadudeama »

jozzas wrote: post #29

Bitcoin is becoming a value store. With slow transaction confirmation and high fees, what are the real-world applications for Bitcoin supposed to be now? And for those applications, are there not other cryptocurrencies more specifically targeted at being better at that application?

And what makes it a good value store, with all of it volatility?

Re: Vanguard Founder Jack Bogle Says ‘Avoid Bitcoin Like the Plague’

#44

Post by pdog »

westurner wrote: post #4

Over the past 7 years, Bitcoin has outperformed every security and portfolio that Jack Bogle has recommended.

This is pretty disrespectful to Jack Bogle.

Vanguard is almost singlehandedly responsible for returning trillions of dollars of costs, in the form of fees and underperformance by active managers, back to investors. Millions of investors have benefited.

Re: Vanguard Founder Jack Bogle Says ‘Avoid Bitcoin Like the Plague’

#45

Post by SaintGhurka »

gluestic wrote: post #2

Translation - "Don't move your money from our exchange to another"

He's the founder of Vanguard, but he retired from the CEO role 19 years ago. In addition, the ownership structure of Vanguard is through the funds themselves, which are owned by the customers. I'd be surprised if Bogle retains any interest at all in the company.

Re: Vanguard Founder Jack Bogle Says ‘Avoid Bitcoin Like the Plague’

#46

Post by gfodor »

non_sequitur wrote: post #11

“Bitcoin has no underlying rate of return,” said Bogle, 88, who started the first index fund in 1976. “You know bonds have an interest coupon, stocks have earnings and dividends, gold has nothing. There is nothing to support bitcoin except the hope that you will sell it to someone for more than you paid for it.” Didnt quite understand this quote - is he down on gold too?

Large public companies that are unlikely to ever issue dividends or be acquired also fit this description. For those companies, there is no legit expectation of an investor capturing the underlying cash flows, other than on the capital gains from the market price of the stock being gauged against the current P/E consensus (or valuation metric of your choice.)

But yet there AMZN, GOOG, and others sit, responsible for a large part of the return in Bogle's revered index funds.

Re: Vanguard Founder Jack Bogle Says ‘Avoid Bitcoin Like the Plague’

#47

Post by jozzas »

CPLX wrote: post #17
bazizbaziz wrote: post #6

"There is nothing to support bitcoin except the hope that you will sell it to someone for more than you paid for it.” Genuinely asking, isn't this the plan for many people? How is bitcoin different than other commodities or property in this regard? Would Bogle say the same thing about those investments?

There is a big difference. If you buy wheat futures and nobody wants to buy them, you can take delivery of a bunch of wheat. If you buy investment real estate and nobody wants it, you can live in it, or build things on it. If you buy stock in a random Fortune 500 company and nobody wants it, you can take possession of a bunch of desks or factories or inventory or whatever their deal is. And if you take possession of…

> If you buy stock in a random Fortune 500 company and nobody wants it, you can take possession of a bunch of desks or factories or inventory or whatever their deal is

Not really, the value of the stock approaches zero, and when the company closes up shop I doubt you get anything at all as an investor. Assets would typically be sold to pay off outstanding debts.

Re: Vanguard Founder Jack Bogle Says ‘Avoid Bitcoin Like the Plague’

#48

Post by [deleted] »

saryant wrote: post #8
bazizbaziz wrote: post #6

"There is nothing to support bitcoin except the hope that you will sell it to someone for more than you paid for it.” Genuinely asking, isn't this the plan for many people? How is bitcoin different than other commodities or property in this regard? Would Bogle say the same thing about those investments?

Property can be used to generate returns (rents). Bitcoin cannot.

[deleted]

Re: Vanguard Founder Jack Bogle Says ‘Avoid Bitcoin Like the Plague’

#49

Post by themagician »

non_sequitur wrote: post #11

“Bitcoin has no underlying rate of return,” said Bogle, 88, who started the first index fund in 1976. “You know bonds have an interest coupon, stocks have earnings and dividends, gold has nothing. There is nothing to support bitcoin except the hope that you will sell it to someone for more than you paid for it.” Didnt quite understand this quote - is he down on gold too?

Sounds to me like he is just rambling a bit there at the end.

Gold actually does have some intrinsic value—it's useful. It's stable, nonreactive, resistant to corrosion and conducts electricity. It's been used as a value store since antiquity above others particularly because it is stable and noncorrosive. The conducive properties are just an added benefit we now have a use for. A gold coin from a hundred years ago is still a gold coin. A Bitcoin from today may not be a Bitcoin as we know it a few years from now. And if it is, it may be difficult to transact.

Bitcoin, on the other hand, really has no use. There was this idea that it might be used to speed up transactions but as we saw leading up to the fork, that's not guaranteed. Anyone with enough capacity can basically seize control of the currency, so it's anything but stable. I think things like Ripple have a far higher value proposition than Bitcoin today—more of what Bitcoin once was.

Re: Vanguard Founder Jack Bogle Says ‘Avoid Bitcoin Like the Plague’

#50

Post by Lon7 »

SilasX wrote: post #18
westurner wrote: post #4

Over the past 7 years, Bitcoin has outperformed every security and portfolio that Jack Bogle has recommended.

How about when adjusted for volatility?

It still outperforms every other asset class. http://charts.woobull.com/bitcoin-risk-adjusted-return/
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