Earlier quoted context omitted.
Low interest rates don't effect whether a stock goes up or down. That is determined by earnings growth. Edit: Peter Lynch agrees with me. Instead of being a passive aggressive downvoting asshole leave a comment. https://youtu.be/UNrMnFM3VvE Edit: Lol, I can't respond to your comments because everyone downvoted my comment and HN rate-limited me. Later.
Low interest rates definitely increase the amount of money chasing equities. There's no where else to get a good return. This pushes up the price of equities and decreases their return too. Also Peter Lynch is no fool, so I'd like a source for you saying he thinks there is no connection before I believe he said that.
Coinbase valued above $100B, ahead of direct listing
131–140 of 305 posts
Re: Coinbase valued above $100B, ahead of direct listing
#132Earlier quoted context omitted.
Low interest rates don't effect whether a stock goes up or down. That is determined by earnings growth. Edit: Peter Lynch agrees with me. Instead of being a passive aggressive downvoting asshole leave a comment. https://youtu.be/UNrMnFM3VvE Edit: Lol, I can't respond to your comments because everyone downvoted my comment and HN rate-limited me. Later.
Of course they do. Lower interest rates enable growth in corporate debt, which has been used to buy back stock. There is a direct connection between decades of lower rates, stock buy backs, and asset appreciation including stocks. https://archive.is/NMR1R
I'm talking about over the long-term. You know, investing?
Re: Coinbase valued above $100B, ahead of direct listing
#133One important thing to note is that these are secondary transactions and not where the stock may potentially trade. Secondly, Coinbase doesn’t allow any secondary transactions, this was a company sponsored (approved) secondary. As a result this created immense scarcity so you can see how much the price changes just in these limited sales. Third, as we saw with the last bull run of Bitcoin everything with blockchain i…
>Fourth, there is no Bitcoin tracking security on public markets.
There are a few in Europe look up Exchange Traded Products.
Re: Coinbase valued above $100B, ahead of direct listing
#134We're just at a point in the economy where it doesn't make sense to hold on to cash. It's just completely losing its value thanks to a long sustained QE. People are just putting their money into anything as a hedge - real estate, stocks, crypto, gold. Until the value of the at can be sustained and inflation comes back, it's unlikely much else will change.
I'm really starting to wonder what makes sense to hold?
Maybe I need to start looking into land prices. And for that I mean forest or agricultural...
Re: Coinbase valued above $100B, ahead of direct listing
#135Earlier quoted context omitted.
> You can train yourself to get good at judging price vs value Could you give some guide lines on how to achieve this?
Some if it is time and experience. Seeing markets come and go, seeing valuations come and go. You could perhaps study historical markets to gain some of that, but there is no better teacher than going through it (including taking some beatings along the way, along the process of learning and instilling discipline). The absolute easiest things to look for (things most anybody can do), is growth vs valuation, along wit…
Thanks for all the detailed responses. Very much appreciated food for thought.
I have a specific question about the calculation of the fair value. My understanding is that there are two steps:
1. Project the future earning (that is the difficult part)
2. Discount the earnings and get the NPV - the fair value of the company
Currently the interest rates are so low that the NPV will be quite high and not that far from the current valuations. Indeed, this seems to be the rationalization by many for the sky high valuations of today. But this seems wrong to me. What would you advice? Pick some other interest rate, maybe an aspirational rate of return for ones investing? Or don't try to compute the NPV and think in terms of multiples like P/E and P/S?
Re: Coinbase valued above $100B, ahead of direct listing
#136Earlier quoted context omitted.
All bubbles pop eventually. I think there's little doubt crypto is a bubble right now. Maybe it pops tomorrow, maybe it goes on for years. I don't know, nobody really does.
>> All bubbles pop eventually. I think there's little doubt crypto is a bubble right now. Same thing was said in 2013 and 2017..
I don't think it was wrong then either. I think this is a greater fool style of bubble like the famous tulip bubble, eventually we'll run out of fools.
That's my opinion, but we'll see.
Re: Coinbase valued above $100B, ahead of direct listing
#137Earlier quoted context omitted.
If the bull case was only $150k, I might agree with you. The bull case is $5 million. But bitcoin has always been risky and can always go to 0 rather quickly. Anyway, there is no point at looking at nominal values given inflation, population growth, general progress. I like to look at everything as a ratio against total global numbers (global wealth, global debt, global population, global equality etc.). Unfortunatel…
Once the bullish case is set at $5 million you might as well set it at $5 trillion. At $5 million it's approaching the value of all stocks on the planet. I don't have to elaborate on the economy those stocks represent, the annual profit generation. $100 trillion is nearly all household assets in the US, and nearly double all household assets in China. I like Bitcoin, it's simply not a believable bullish case at all.
Total wealth 500 trillion. Frequently Recommended institutional allocation 30-50% bonds. Bitcoin replaces the bulk of cash equivalents. Not impossible.
Re: Coinbase valued above $100B, ahead of direct listing
#138Earlier quoted context omitted.
the nice thing with that bubble is that because it is manufactured by the Fed, you have an easy signal for when it has reached its top, just look at the weekly fed balance sheet: https://www.federalreserve.gov/monetarypolicy/bst_recenttren... And right now they are still printing more and more.
Fed contributes, but it's hardly a singular explainer for the current market mania. The chart you shared hasn't even changed significantly since July. The Fed didn't print enough money to buoy Tesla 1000% or send Bitcoin up 100% in a month. There's no mechanism directing money straight from the Fed into the riskiest assets. Market mania has taken hold.
It definitely plays a role in driving overall sentiment though. And indirectly plays a role in people taking more risks. There's a view that the economy won't collapse because central banks will just keep printing money... and it's probably correct because there's no real alternative right now unless you want civil unrest because that's what you'll get once you shut down the economy and then turn off the money taps simultaneously.
But at some point, in order for fiat currency to retain any sort of reliable buying power, there does need to be a rug pull of some sort. Doing it while so many are out of work and so many industries are effectively shut down by government regulation would be extremely dangerous (for the government of the day).
Re: Coinbase valued above $100B, ahead of direct listing
#139One important thing to note is that these are secondary transactions and not where the stock may potentially trade. Secondly, Coinbase doesn’t allow any secondary transactions, this was a company sponsored (approved) secondary. As a result this created immense scarcity so you can see how much the price changes just in these limited sales. Third, as we saw with the last bull run of Bitcoin everything with blockchain i…
>Fourth, there is no Bitcoin tracking security on public markets. There are a few in Europe look up Exchange Traded Products.
There is a Bitcoin etf on the TSX since this week, both in CAD and USD
Re: Coinbase valued above $100B, ahead of direct listing
#140One important thing to note is that these are secondary transactions and not where the stock may potentially trade. Secondly, Coinbase doesn’t allow any secondary transactions, this was a company sponsored (approved) secondary. As a result this created immense scarcity so you can see how much the price changes just in these limited sales. Third, as we saw with the last bull run of Bitcoin everything with blockchain i…
> Fourth, there is no Bitcoin tracking security on public markets
Because of their big purchases Microstrategy stock (MSTR) tracks Bitcoin pretty well.