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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’

#51

Post by siglesias »

gfodor wrote: post #46
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?

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.

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

#52

Post by ohhhlol »

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?

> With slow transaction confirmation and high fees

This is being solved, see https://en.wikipedia.org/wiki/Lightning_Network

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

#53

Post by jozzas »

justadudeama wrote: post #43
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?

And what makes it a good value store, with all of it volatility?

nothing at the moment, it's being used as a speculative investment. I imagine in time the volatility will reduce as other cryptocurrencies become more mainstream and actually used for real-world purposes.

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

#54

Post by taneq »

HarryHirsch wrote: post #15
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?

At least gold is used in jewellery and electronics. What is bitcoin used for, except ransomware?

Silk Road? :P

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

#55

Post by VMG »

HarryHirsch wrote: post #15
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?

At least gold is used in jewellery and electronics. What is bitcoin used for, except ransomware?

Start to explore why bitcoin can be used for ransomware and other things cannot.

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

#56

Post by StephenMelon »

HarryHirsch wrote: post #15
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?

At least gold is used in jewellery and electronics. What is bitcoin used for, except ransomware?

Well ransomware is a growth market...

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

#57

Post by ohhhlol »

econner wrote: post #35
bazizbaziz wrote: post #6

"There is nothing to support bitcoin except the hope that you will sell it to someone for more than you paid for it.” Genuinely asking, isn't this the plan for many people? How is bitcoin different than other commodities or property in this regard? Would Bogle say the same thing about those investments?

Yes, there's really nothing that gives Bitcoin value beyond new investors being willing to pay more for it than previous investors. Most people don't transact using it and the network is far too slow to support that use case anyway. It is a "store of value" that loses or gains half its value every few months. The community is torn with 3 separate forks & some of the earliest Bitcoiners have gone all in on Bitcoin Cas…

> most of the early Bitcoiners have gone all in on Bitcoin Cash.

this is an absurdly untrue statement

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

#58

Post by empath75 »

VMG wrote: post #42
empath75 wrote: post #40

Earlier quoted context omitted.

Only on paper, my friend. Let's see all those bitcoin holders try to realize those profits.

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.

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

#59

Post by nerdponx »

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 a reasonable store of value.

There's also value in Bitcoin because it's a good entry point into other cryptocurrencies that could turn out to be better general-purpose exchange media, like Litecoin.

It's a bit like US Treasury Bonds. Nobody buys them for the tiny rate of return they offer, but they have genuine, valid use as a financial instrument. Normal people, however don't typically buy them, and normal people probably shouldn't be buying Bitcoin either unless they have some spare cash to gamble on it.

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

#60

Post by jorblumesea »

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 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.

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