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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’

#161

Post by thoughtexprmnt »

Isn't the "value" of a currency in it's relative stability over time? That is, the confidence by those who use it that it will be exchangeable for roughly the same amount of goods and services today, tomorrow, six months or a year from now (accounting for nominal inflation, of course).

If you accept that premise of what a viable currency should be, then it seems like the volatility of Bitcoin and other cryptocurrencies have thus far made them failures. I mean, if a national currency had similarly rapid changes in value, wouldn't we see financial chaos, riots, and revolution?

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

#162

Post by cesarb »

landryraccoon wrote: post #155
cesarb wrote: post #136

Earlier quoted context omitted.

Yes, people do invest in USD. I looked up a random dollar fund (BB Cambial Dólar LP Mil), and its total return over the last 5 years was 73.92%. That's AFAIK significantly more than the accumulated inflation in the same period.

> invest in USD I think that's kind of an abuse of the term "invest". If you read their prospectus it's clear that they are looking for foreign currency arbitrage opportunities: > The applications of the FIs must have at least 80% of their PL represented by assets directly related or synthesized via derivatives to the variation of the North American. The applications, together with those of the FIs invested in assets…

I'm sorry, but I'm not seeing where in that list says it is looking for arbitrage opportunities. What you quoted is just the list of restrictions on the kinds of investments the fund can make. The "targets" part, which you didn't quote, says the returns should attempt to follow the USD. And it seems to be working: the total return over 5 years was 73.92%, while the USD over 5 years increased 73.95%. That is, had I bought USD 5 years ago and sold it now, the return should be about the same as that fund. Which is the point: it's simpler to invest on that fund (or others like it) than to buy USD directly.

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

#163

Post by IncRnd »

lostsock wrote: post #117
IncRnd wrote: post #81

Earlier quoted context omitted.

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.

How is it difficult to have a transaction?

I was referring to the time it takes to complete a bitcoin transaction in which confirmation lags significantly behind that of transactions in currencies around the world.

https://blockchain.info/charts/avg-confirmation-time

https://blockchain.info/charts/median-confirmation-time

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

#164

Post by dgant »

alejohausner wrote: post #123
akozak wrote: post #22

Earlier quoted context omitted.

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.

That's not an investment. There is no value being generated and nothing is growing. It's speculation.

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

#165

Post by [deleted] »

cesarb wrote: post #162
landryraccoon wrote: post #155

Earlier quoted context omitted.

> invest in USD I think that's kind of an abuse of the term "invest". If you read their prospectus it's clear that they are looking for foreign currency arbitrage opportunities: > The applications of the FIs must have at least 80% of their PL represented by assets directly related or synthesized via derivatives to the variation of the North American. The applications, together with those of the FIs invested in assets…

I'm sorry, but I'm not seeing where in that list says it is looking for arbitrage opportunities. What you quoted is just the list of restrictions on the kinds of investments the fund can make. The "targets" part, which you didn't quote, says the returns should attempt to follow the USD. And it seems to be working: the total return over 5 years was 73.92%, while the USD over 5 years increased 73.95%. That is, had I bo…

[deleted]

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

#166

Post by sjg007 »

kevin_thibedeau wrote: post #69

Forcing people into 401Ks was the greatest financial hack of the century. The bankers don't want competition for "their" money pile.

That is an interesting argument. These guys are selling financial products that are explicitly not pro bitcoin (yet). If they see value in bitcoin then they would probably pump them. That is most likely too soon. In a few years you will probably hear that bitcoin is a hedge against global instability. It might be rational for oil to trade in bitcoin. It's also a big way for the Chinese to get money out as well as the Russians. North Korea has nothing to lose with bitcoin unless it pisses off the Chinese and Russians.

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

#167

Post by sjg007 »

uncoder0 wrote: post #125
nostrademons wrote: post #10

Earlier quoted context omitted.

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?

Those companies no longer exist so the stock value==0.

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

#168

Post by sjg007 »

non_sequitur wrote: post #5
westurner wrote: post #4

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

7 years is a tiny sample size if you are hoping to retire off it (unless of course you cash out your millions during that time). His advice makes sense if you are looking at a 30 year retirement horizon - it may not be there in 30 years.

Interesting.. the stock market will probably be there, just not necessarily the individual stocks you are currently invested in. Unless ICOs take off... now despite all of scams, ICOs allow a global stock market. Now maybe participating in that is dangerous.. maybe not.

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

#169

Post by sjg007 »

lern_too_spel wrote: post #134
erebus_rex wrote: post #73

Earlier quoted context omitted.

I wonder if a crash would be good for Bitcoin's price. I think it is a bubble but it seems like an asset that would gain traction in times of fear/uncertainty in the fiat economy.

People will need to sell their Bitcoins to purchase essentials, but whom will they sell their digital baubles to?

People not experiencing the recession who may be in other countries.

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

#170

Post by candiodari »

kelnos wrote: post #139
alejohausner wrote: post #123

Earlier quoted context omitted.

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.

Cherry-picking two dates doesn't really tell us much. Volatility year-over year would be useful to see, and, as they say, past performance is not an indicator of future earnings. A decision to invest (or not invest) in gold should be based on your current expectation of the future.

Ah come on. We both know that the basic claims about gold are true:

1) Gold returns, over the very long term, are roughly in line with S&P500 returns (but ... we're talking decades, as in plural).

2) in the short term Gold returns are essentially zero. With both the good and bad that comes with: almost no volatility, and when there is volatility, it's sudden large jumps up.

The one that isn't well known:

3) Most governments prevented this investment from working when it mattered by (in the US case) outlawing gold. Other governments did different things with similar results.

So Gold is a great investment, IF you're willing to wait 20+ years at least, and of course assuming you trust the government (the exact opposite of what most gold bugs will tell you).

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