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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’

#81

Post by IncRnd »

yters wrote: post #66
jorblumesea wrote: post #60

Earlier quoted context omitted.

Gold has practical uses in industrial applications and electronics. It also has a floor, which is the cost to mine and ship. Gold has a minimum theoretical value although I'm unsure off the top of my head how low that might be. Bitcoin's only value is what people will pay for it and has nothing backing it up. It's not really comparable.

Bitcoin is like a fiat currency without a fiat.

Bitcoin is unlike a currency in that it is difficult to have a transaction, today, using bitcoin. That will hopefully change, but that is how things are today.

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

#83

Post by dsacco »

nerdponx wrote: post #59
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?

There is nothing to support bitcoin That's what I've been realizing latey: there is something to support Bitcoin, and that something is the blockchain. The reason banks and big financial companies are interested in it is not for its speculative value. They are interested in the fact that it is both decentralized and immutable. As long as financial corporations are willing to exchange Bitcoin for USD, then Bitcoin is…

> The reason banks and big financial companies are interested in it is not for its speculative value. They are interested in the fact that it is both decentralized and immutable.

None of the blockchain projects or proposals being worked on by enterprise financial institutions are decentralized. A decentralized ledger is conceptually antithetical to a small group of organizations which trust each other and want to retain control over the shared ledger.

It can be immutable, but for that matter I don't really think it's immutable in the same sense as a decentralized, permissionless ledger is. The organizations in charge of the blockchain can create a hard fork, which everyone participating with the organizations will have to abide by, because the blockchain is not decentralized.

In fact, what we actually have is a consortium of companies deploying distributed database structures and calling them blockchains. I'm sure there is a legitimately new innovation that can emerge from this sort of blockchain, but it won't be decentralization or immutability.

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

#84

Post by mathperson »

ringaroundthetx wrote: post #68
barrkel wrote: post #16

Earlier quoted context omitted.

So did tulip bulbs in Holland in the 17th century. It's still not enough to make it a smart choice.

Bitcoin has greatly outperformed tulips.

Is this a joke? If so its really funny. If not...you definitely are missing the point

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

#85

Post by chiaro »

nerdponx wrote: post #59
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?

There is nothing to support bitcoin That's what I've been realizing latey: there is something to support Bitcoin, and that something is the blockchain. The reason banks and big financial companies are interested in it is not for its speculative value. They are interested in the fact that it is both decentralized and immutable. As long as financial corporations are willing to exchange Bitcoin for USD, then Bitcoin is…

Nah. Banks and big financial companies interested in the blockchain will spin up their own version without tying it to the unstable mess of bitcoin. e.g. https://ripple.com/

And people do by treasury bonds for their rate of return, when the investment must be as riskless as possible.

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

#86

Post by saryant »

ringaroundthetx wrote: post #64
pdog wrote: post #44

Earlier quoted context omitted.

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.

and what does that have to do with talking about an area with no domain knowledge? there are plenty of esoteric and dubious assets in the vanguard obligatory diversification model. Get bitcoin in the 1% allocation right next to CDO-ABACUS-2007-SENIOR

Vanguard never owned subprime CDO paper in its money market funds.

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

#87

Post by VMG »

empath75 wrote: post #58
VMG wrote: post #42

Earlier quoted context omitted.

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

But that only happens if the company is insolvent or otherwise failing. If that isn't the case, new buyers would come in because the stock represents a share of something that has actual value. There is no such underlying asset beneath bitcoin. It's only value is speculative.

Apparently that is enough to sustain it. Many people have successfully liquidated their position and found new buyers.

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

#88

Post by SilasX »

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?

Bogle advocates buying broad stock and bond indexes[1], so yes, he's down on gold too. But that doesn't stop Vanguard from offering a precious metals and mining fund [2] or actively managed funds[3].

[1] https://www.npr.org/2015/10/17/436993646/three-investment-gu...

[2] https://personal.vanguard.com/us/funds/snapshot?FundIntExt=I...

[3] https://investor.vanguard.com/mutual-funds/actively-managed

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

#89

Post by AndrewBissell »

themagician wrote: post #49
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 i…

> Anyone with enough capacity can basically seize control of the currency, so it's anything but stable.

The amount of resources required to execute this attack is moving higher at a rapid pace. Also, a 51% attack can gum up new transactions and potentially double spend, at least until people realize the attack is happening and stop signing new transactions. It can't rewrite blocks from the distant past to send everyone's coins to the attacker's address.

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

#90

Post by chiaro »

slg wrote: post #30
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?

Gold is certainly the ideal model for something like Bitcoin but in terms of projectable value gold has time on its side. I will happily invest in Bitcoin when its history as a store of value and a medium of exchange is measured in millennia.

Nope. For one, gold has intrinsic value and can actually be used as a manufacturing input.
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