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Warren Buffet and Charlie Munger on crypto in 2018

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Re: Warren Buffet and Charlie Munger on crypto in 2018

#141

Post by Nursie »

jgilias wrote: post #109
Nursie wrote: post #92

Earlier quoted context omitted.

1. Services like Wise seem to solve this, I can add currencies to my account there pretty much at the touch of a button. Rates are good and conversion fees low. 2. Less sure about this one!

Yes, Wise was the first option he tried. The problem was that he needed a business account and Wise put him in a waiting list for opening one but never got back. But, yes, Wise would’ve helped here.

Odd, here in Australia I’m pretty sure I just had to click “Open a business account and give a few details like the ABN.

Oh well.

Re: Warren Buffet and Charlie Munger on crypto in 2018

#142

Post by CPLX »

JonathanBeuys wrote: post #54
CPLX wrote: post #47

Earlier quoted context omitted.

Bitcoin doesn’t have a market cap. This is true because if you somehow could pay $300bn today and then possess all bitcoins you would have acquired literally nothing whatsoever. This, in fact, is exactly what these guys are pointing out.

First, you are confusing market cap with "value" or some other concept. Market cap is price of the last sale multiplied by stock. So every asset has it by definition. Second, how do you back up that statement of not being able to sell it? How do you know you couldn't sell those Bitcoins back to the market? Would you think the same about buying up all gold?

It’s not a stock though. Just because you can buy or trade it doesn’t mean it has a market cap.

What’s the market cap of gravel? It might be $1,000 a ton but you can’t multiply that by the amount of gravel in the world and get a meaningful number.

OK so how about gold? How much of that is there? Are you counting ore, how about gold a mile underground? Same problem.

The point is that market cap only applies when you’re talking about a security that represents a claim on a fraction of a whole asset that exists independently of the security itself.

The concept of a market cap is meaningful when adding up all of the stock yields 100% of a defined thing.

In that case you can surmise that the market cap represents some kind of representation of the value of that thing. The lower limit on market cap is generally considered to have a relationship to what that asset is worth.

But Bitcoin doesn’t have intrinsic value. It’s not a thing at all. If you owned all of it you literally would have absolutely nothing at all. Someone else could just start using the same code and call it bitcoin. There’s no asset there.

Hence, no market cap.

Re: Warren Buffet and Charlie Munger on crypto in 2018

#143

Post by jgilias »

Nursie wrote: post #141
jgilias wrote: post #109

Earlier quoted context omitted.

Yes, Wise was the first option he tried. The problem was that he needed a business account and Wise put him in a waiting list for opening one but never got back. But, yes, Wise would’ve helped here.

Odd, here in Australia I’m pretty sure I just had to click “Open a business account and give a few details like the ABN. Oh well.

Yeah, no idea, maybe they’re just understaffed for the region or something. So in his case it just happened that the exchange he chose was faster with KYC than Wise.

Come to think of it, this actually highlights the point very well. People on this thread generally seem to think that international money transfer is fine. I don’t think Wise would have a business case if that was true.

Re: Warren Buffet and Charlie Munger on crypto in 2018

#144

Post by lvl102 »

kennend3 wrote: post #104
lvl102 wrote: post #13

Sorry but these two are not that great and their track record for the past decade is also not that great. They basically missed out on 10x type of opportunity just from 2018. They are in the money making business right? Last I checked, BTC is still 5x from 2018 low. Money is money. Return is return. Edit: from a purely financial point of view, you can make the same argument for companies that do not pay dividends/sha…

> Edit: from a purely financial point of view, you can make the same argument for companies that do not pay dividends/share repo. Until they actually pay you for your shares, you’re effectively invested in a ponzi scheme. Yes.. by redefining what "ponzi scheme" means you can say anything is a ponzi scheme. Or alternatively you can use the accepted definition: --- Pon·zi scheme /ˈpänzē ˌskēm/ Learn to pronounce noun a…

They invested in IBM and BABA. Enough said.

Re: Warren Buffet and Charlie Munger on crypto in 2018

#145

Post by StingyJelly »

Nursie wrote: post #93
StingyJelly wrote: post #60

Earlier quoted context omitted.

If you could pay $300bn today, you wouldn't be able to possess all bitcoins.

Certainly, but then if you possessed all bitcoins, you wouldn't able to sell them for 300 billion either. The "market cap" metric has always been meaningless.

My point is that it's meaningless both ways

Re: Warren Buffet and Charlie Munger on crypto in 2018

#146

Post by paulryanrogers »

stephc_int13 wrote: post #108
paulryanrogers wrote: post #102

Earlier quoted context omitted.

Tulip mania was never a secret. Crypto just added some more layers, making it harder to tell that it was mania. Education is the only answer I can see.

"Education" is a lazy and naive answer, IMHO. I don't think we can consider that Isaac Newton was uneducated or dumb. And yet, he fell for get-rich-quick scams. https://moneymorning.com/2017/05/08/this-classic-investing-m... We need something more targeted than "education".

Newton being knowledge about physics doesn't mean he was immune from financial scams.

There isn't much appetite for regulation, at least in the US. What would you propose?

Re: Warren Buffet and Charlie Munger on crypto in 2018

#147

Post by JonathanBeuys »

CPLX wrote: post #142
JonathanBeuys wrote: post #54

Earlier quoted context omitted.

First, you are confusing market cap with "value" or some other concept. Market cap is price of the last sale multiplied by stock. So every asset has it by definition. Second, how do you back up that statement of not being able to sell it? How do you know you couldn't sell those Bitcoins back to the market? Would you think the same about buying up all gold?

It’s not a stock though. Just because you can buy or trade it doesn’t mean it has a market cap. What’s the market cap of gravel? It might be $1,000 a ton but you can’t multiply that by the amount of gravel in the world and get a meaningful number. OK so how about gold? How much of that is there? Are you counting ore, how about gold a mile underground? Same problem. The point is that market cap only applies when you’r…

"Stock" is the word used to describe the sum of an asset held by investors. Google "stock to flow" to see how "stock" is commonly used for assets in general and commodities like gold in particular.

You will also find the answers to your questions about whether to count gold below ground.

Re: Warren Buffet and Charlie Munger on crypto in 2018

#148

Post by Frost1x »

tokai wrote: post #40
Frost1x wrote: post #30

Earlier quoted context omitted.

The general concept of having a medium and marketplace of exchange that isn't regulated/controlled has some value. It may have more costs than benefits in the grand scheme of things, though. I tend to support regulation in general, but I also see the value of something that has limited opportunity for opportunists to dig their fingers into and extract from without contributing real value themselves. To be very clear,…

But regulation/control has nothing todo with crypto. Its not a technical issue, but social/political. So tax fraud and remittances are left. Both seems like they will make regulation come eventually.

It has everything to do with crypto. The entire selling point of crypto is decentralization of the medium of exchange. The fact I can exchange a medium, in theory, anonymously and without limitation is what makes crypto appealing. If not, what value does it add?

Re: Warren Buffet and Charlie Munger on crypto in 2018

#149

Post by tinco »

zanderxyz wrote: post #72
tinco wrote: post #25

Everyone with half a brain has predicted the failure of NFT's and the collapse of ridiculous get rich schemes such as FTX. The big problem is when recognising the (small amount) of value that actually is in the cryptocurrency/defi industry, to put your money to work in a smart manner. Sequoia is clearly not able to do so reliably, but in general it's incredibly hard to be long on a market that's so overhyped as crypt…

If you hold Tesla, you hold it at the current market price. It’s the same position as someone who buys today. If you wouldn’t buy it today then you should sell.

Yeah as I said I don't hold Tesla. I was long on it as I sold it years ago. Could've made more money if I held on to it, but I was not smart enough to realize what the global economy was doing to tech stocks, and not dumb enough to think Tesla actually was going to have any sort of intrinsic value close to their market cap.

Re: Warren Buffet and Charlie Munger on crypto in 2018

#150

Post by stephc_int13 »

paulryanrogers wrote: post #146
stephc_int13 wrote: post #108

Earlier quoted context omitted.

"Education" is a lazy and naive answer, IMHO. I don't think we can consider that Isaac Newton was uneducated or dumb. And yet, he fell for get-rich-quick scams. https://moneymorning.com/2017/05/08/this-classic-investing-m... We need something more targeted than "education".

Newton being knowledge about physics doesn't mean he was immune from financial scams. There isn't much appetite for regulation, at least in the US. What would you propose?

I would go for something simple and radical.
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