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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’

#121

Post by smarks »

SilasX wrote: post #88
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

Note that the Vanguard Precious Metals and Mining Fund (VGPMX) invests in companies that pursue "mining of or exploration for precious and rare metals and minerals" and that it's not a fund that invests in gold itself. Some investors say you should invest in gold because ... reasons ... but that's not what VGPMX does.

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

#122

Post by lostsock »

econner wrote: post #100
ohhhlol wrote: post #57

Earlier quoted context omitted.

> most of the early Bitcoiners have gone all in on Bitcoin Cash. this is an absurdly untrue statement

Ok, "most" was the wrong word, but Roger Ver and Gavin Andresen were instrumental in the success of Bitcoin and they now support BCH.

Gavin Andresen maybe, but what has Roger Ver done?

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

#123

Post by alejohausner »

akozak wrote: post #22
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?

I'm no financial advisor, but I'd fire the person who recommended I buy gold as a long term investment.

Actually gold is a very good long term investment. Here are some year-end closing prices:

Year gold S&P500

1972: 64 118

2015: 1060 2044

Ratio: 16.5 17.3

True, gold does not have a yield, but it has gone up a lot over the years.

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

#124

Post by cwkoss »

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?

Bitcoin is a competitor to wire transfers/ACH.

The increased price makes the system more valuable because it increases the amount of funds that can be transferred through and decreases the cost of that transfer (more order depth for getting into and out of bitcoin).

Today, it's feasible to send $1M with Bitcoin. A few years ago, there wasn't enough market depth to do that very efficiently.

The other 'killer app' is companies/organizations holding all of their funds in a transparent, public way by making their addresses known. I think there will be a lot of value in this, but we're probably a decade away from the space maturing.

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

#125

Post by uncoder0 »

nostrademons wrote: post #10
westurner wrote: post #4

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

Over the 7 years from 1993-2000, a portfolio of stocks with ".com" in the name far outperformed every other asset class out there. If you held that portfolio for the 7 years following, from 2000-2007, you would most likely go bankrupt.

How does one go bankrupt from holding an asset?

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

#126

Post by [deleted] »

siglesias wrote: post #51
gfodor wrote: post #46

Earlier quoted context omitted.

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…

This is slightly specious. There is an expectation that AMZN or GOOG will eventually issue dividends or repurchase shares, and there's noting fundamentally preventing them from doing so. There's no way to form a valuation otherwise.

[deleted]

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

#127

Post by vidanay »

kaiwen1 wrote: post #76
berberous wrote: post #26

Earlier quoted context omitted.

Here is Warren Buffet's similar argument against gold from his 2011 annual investor letter [0]. The argument also applies to Bitcoin and other assets that are driven more by speculation than productive income streams: "The second major category of investments involves assets that will never produce anything, but that are purchased in the buyer’s hope that someone else – who also knows that the assets will be forever…

> You can fondle the cube and it will not respond. And with bitcoin you can't even fondle the cube.

I still don't know how to Gleam the Cube, and now we are fondling it?

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

#128

Post by galfarragem »

leereeves wrote: post #105
jfaucett wrote: post #71

Earlier quoted context omitted.

> Gold is certainly the ideal model for something like Bitcoin I disagree. I don't think Bitcoin should strive to be a store of value like Gold is. Today most Gold investing is just based on fear, because people see a government misbehaving and lose faith in its ability to maintain the value of its fiat and then flee to something that still has some properties useful in monies. This is no where near the main usefulne…

> efficient and has cheap transaction costs I've heard differently. Vice: One Bitcoin Transaction Now Uses as Much Energy as Your House in a Week https://motherboard.vice.com/en_us/article/ywbbpm/bitcoin-mi... Average transaction fees have gone up substantially. https://bitinfocharts.com/comparison/bitcoin-transactionfees...

> Vice: One Bitcoin Transaction Now Uses as Much Energy as Your House in a Week

This and easy tax evasion (governments will hardly ever support it) are the two main factors that put me bearish on Bitcoin. Not on blockchain though.

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

#129

Post by alejohausner »

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 does not produce anything, unlike stocks which yield dividends, or land which yields crops. And yet it's a wonderful investment over the very long haul. From 1972 to 2015, BOTH gold and the S&P went up 17-fold.

Moreover, investors flee to gold in times of panic. If you hold 50%-50% gold and stocks, one will tend to up when the other goes down, letting you sleep at night.

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

#130

Post by mathperson »

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?

yes!
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