Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

bloomberg.com

Post reply on HN
Print view View original

71–80 of 191 posts

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

#71

Post by jfaucett »

slg wrote: post #30
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 is certainly the ideal model for something like Bitcoin but in terms of projectable value gold has time on its side. I will happily invest in Bitcoin when its history as a store of value and a medium of exchange is measured in millennia.

> 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 usefulness of Bitcoin though, which IMHO are: its extremely divisible, portable, efficient and has cheap transaction costs. Its also by far the most free in terms of your ability to enter into a transaction with anyone the world over, regardless of what a particular government thinks about that transaction.

> I will happily invest in Bitcoin when its history as a store of value and a medium of exchange is measured in millennia.

The history of Gold as a medium of exchange and store of value has virtually no bearing on whether or not you should invest in it in 2017. Gold pays no dividends, has no interests, does not appreciate over the long term, and can't protect against incident forms of inflation. On top of all that, it has none of the above mentioned technological advantages Bitcoin brings.

There are arguments to be made for Gold but they are in its utility in modern industry, etc.

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

#72

Post by jpk »

desireco42 wrote: post #24

Another day, another alarmist article. Nothing Jack Bogle says is not true. Yet, he is 88yr old guy, with all due respect, he has no idea what Bitcoin is. I have yet to hear something from Wall Street that is novel and relevant to Bitcoin. It is a new thing they are afraid of, often not understanding it fully. When I say Bitcoin, I mean all crypto-currencies. If you don't know what you are getting into, I would advis…

Ageism isn't a very compelling basis for an argument.

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

#73

Post by erebus_rex »

betterunix2 wrote: post #33
westurner wrote: post #4

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

We'll see how well Bitcoin does during the next recession. Plenty of investments seem great when the markets and economy are doing well, but turn into disasters when the markets crash.

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.

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

#74

Post by rebuilder »

taneq wrote: post #54
HarryHirsch wrote: post #15

Earlier quoted context omitted.

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

Silk Road? :P

You jest, but go read bitcointalk.org's archives from a few years ago (and before) and I think you'll find that's exactly the purpose it seems expected to fulfill.

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

#75

Post by jorblumesea »

yters wrote: post #66
jorblumesea wrote: post #60

Earlier quoted context omitted.

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.

Bitcoin is like a fiat currency without a fiat.

and without central banking, top tier economists, monetary tools for a bailout, a military and government...

It's really not much like a fiat currency at all. The closest thing might be penny stocks.

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

#76

Post by kaiwen1 »

berberous wrote: post #26
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?

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.

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

#77

Post by tryingagainbro »

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?

Investors like him and Buffet see gold as something just sitting there. if you buy a company, they will increase earnings, market share etc.

Gold just sits on a vault--which is a great thing for rich people to use a small % of their wealth for. Just in case. Gold has other uses and a 5000+ year history. Compare it to hundreds of coins out there

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

#78

Post by westurner »

pdog wrote: post #44
westurner wrote: post #4

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

This is pretty disrespectful to Jack Bogle. Vanguard is almost singlehandedly responsible for returning trillions of dollars of costs, in the form of fees and underperformance by active managers, back to investors. Millions of investors have benefited.

Bitcoin has been a bubble since $1 and $100 to these people.

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

#79

Post by jorblumesea »

nerdponx wrote: post #59
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…

US Treasury bonds are backed by the military and economic might of a superpower, and the fact that it's an IOU that's almost bulletproof. That's a really big part of their value. It's the safest investment possible which is why governments funnel money into treasuries.

Bitcoin just has the power of faith in the network and that liquidity will exist when you want to cash out. Neither of which is certain.

Bitcoin really doesn't have any support. Exchanges don't have close to the liquidity needed to allow everyone to withdraw their coins in fiat currency.

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

#80

Post by TheDong »

nerdponx wrote: post #59
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…

> They are interested in the fact that it is both decentralized and immutable

So like https://ipfs.io/ or various other append-only logs? Or the certificate transparency project?

The blockchain is the least efficient way to create a distributed append-only log if there are a fixed number of trusted actors publishing to it.

Banks can far more easily publish append-only logs of transactions without the extra noise of "mining" and comparing longest chains based on proof-of-work.

Post reply on HN