Tulips

DOUG By Guest Blogger Doug Rowat

Bitcoin. What a ride.

Look at this insane chart below. Unbelievable. Nosebleed territory. It’s over. Done. I get vertigo just staring at it. Definitely time to take profits.

Major Bubbles since 1990 vs Bitcoin: % Change

Source: Bespoke Premium

Actually, I have no idea if it’s time to take profits or where the price of Bitcoin goes. And despite the plethora of experts willing to chime in, most others don’t either. In fact, you could have shown me an earlier chart with Bitcoin at levels only equal to the tech bubble of the late 1990s (see annotated chart below) and I also would have concluded the same—time to take profits. And the argument would have been just as compelling: “Look at the steepness of the curve. Bitcoin is now equal to tech bubble levels! And you remember how the tech bubble ended, right?” The problem, of course, is that Bitcoin went on to advance another thousand or so percent after matching the lofty mark of the tech bubble, so those warnings would have helped me not one bit(coin).

But an Earlier Chart of Bitcoin Would have Looked Terrifying Also…

Source: Bespoke Premium, Raymond James

Here’s another example. Think back to 2014 when China was rapidly trying to establish a more open capital market system, allowing increased foreign ownership of Chinese companies and also encouraging ordinary Chinese investors to direct their savings towards the Chinese stock market, which they did in earnest and in an almost totally unregulated way. The Shanghai Stock Exchange Composite Index soared an incredible 53% in 2014. Almost 18x the percentage gain of global equities overall that year! Chinese equity valuations became stretched and it was obvious that the new market openness was encouraging rampant speculation. Clearly, the Chinese market was becoming overheated:

Shanghai Composite Index: The Bubble Peak – 2014?

Source: Bloomberg, Raymond James

The problem, however, was that the market wasn’t even close to reaching its peak by the end of 2014. In fact, despite that precarious looking chart above, the Shanghai Composite actually gained another 54% before reaching its ultimate high-water mark in June 2015:

Shanghai Composite Index: The REAL Bubble Peak – 2015

Source: Bloomberg, Raymond James

The truth is none of us know when a bubble will finally collapse. People smugly Monday-morning-quarterback bubbles all the time. For instance, the told-you-so admonishments regarding the dot-com bubble usually go something like this: “Obviously, the dot-com boom couldn’t last. With a price-to-earnings ratio of 100 times, anyone could have seen that the market was too expensive”. But it lasted for a while, enough time for many people to make tidy profits. And the told-you-so example above is a trick: NASDAQ 100 valuations actually reached almost 300 times earnings at the peak. Bubbles defy analysis, yet everyone tries.

You should actually own rapidly advancing markets, but only in such small percentages that it won’t matter to your overall wealth if you time them incorrectly.

The only time a heated, skyrocketing market is a problem is when it’s the ONLY market that you’re exposed to. Now, in fairness, our clients don’t have exposure to Bitcoin specifically, but they have exposure to other potential bubble markets. But this exposure is controlled and done in the context of a fully diversified and balanced portfolio. That way, if the bubble pops, it’s a speedbump in an otherwise smooth ride. And maybe it never pops, at least not fully, and therefore the rising momentum simply adds a little bit to our clients’ wealth.

Investors fail constantly to anticipate the top of any rapidly accelerating market. This is because markets almost always overshoot their historical valuation ranges and momentum becomes a very difficult factor to build into forecasts. Never assume you’re gifted enough to repeatedly and accurately time a bubble’s peak. You’re just as likely to sell too early and miss considerable upside or buy too late and suffer the declines. And trying to ‘play’ an inflating or deflating bubble market constitutes the most dangerous kind of market timing of all. Every mistake you make—selling too early, buying too late—gets amplified because of the prevailing short-term momentum.

Stay diversified and balanced. And let the bubbles float where they may.

Doug Rowat, FCSI® is Portfolio Manager with Turner Investments and Senior Vice President, Private Client Group, Raymond James Ltd.

100 comments ↓

#1 betting on houses on 09.09.17 at 3:38 pm

Betting on houses

https://www.youtube.com/watch?v=hYMiTlZ9iN4

#2 Greater Fool on 09.09.17 at 3:52 pm

You need to study more about bitcoin.

#3 Bitcon on 09.09.17 at 3:58 pm

Someone please correct me if I’m wrong….

What I’ve read about Bitcoin is that you can convert your Canadian currency into Bitcoins, but you can’t do the reverse.

When I read this about the various Bitcoin exchanges I realized this was whole Bitcoin craze is well organized global con job.

You give these anonymous guys your hard currency. They take your hard currency and buy properties, cars, planes, etc. In exchange for your hard currency they give you some non-government “money” not supported by military might or public institutions or anything! lol

When you want your Canadian dollars back, their exchange rules say “The anonymous guys say sorry, we’ve spent your real currency on real assets so you can’t get your money back, now go away!”

In 15 years you will be reading about Bitcoin (and it’s cousins

Someone correct me if I’ve interpreted the various Bitcoin exchange rules wrong?

#4 US dollar falling down on 09.09.17 at 4:03 pm

Is the US dollar collapsing because it is in a Bubble?

#5 Lost..but not leased on 09.09.17 at 4:04 pm

Hot markets and timing..

Vividly recall a family member who had played the stock market big time in the late 1980’s.

One day announced he had quit his gov’t job and was going to retire early live off his investments. He took us out for dinner… and shortly thereafter the market crashed in 1987 and he lost it all. Apparently the banks turned off the taps and demanded more liquidity.

IMHO..2008 crash was major wake up call for many of us..the system was exposed big time…aka I had no idea the Fed was a private company till that crash.

BITCOIN?…..IMHO nothing lasts forever..and whose to say whether other versions of BITCOIN may come forward ?

#6 Dan.t on 09.09.17 at 4:07 pm

How many people do you actually know that are invested in Cryptocurrencies?

I would say, when everyone and their dog is invested..

(just like BC and Real Estate, because everyone needs to have at least a principal residence and of course an investment condo and a pre-sale)

and every topic around the dinner table turns to Bitcoin and the latest s**t coin that you just need to have in your Crypto portfolio because the all the public are now experts in Crypto, then it is a massive bubble.

Crypto is like the stock market steroids! It’s the equivalent to a 1972 GDR woman weightlifter with enough steroids to kill a small horse. 1 week is like 6 months in boring stock land. That is why the chart looks like that. Who knows where it ends but you better have a plan if you are going to get involved with Crypto.

I guess to the crypto crowd, you can see the value of bitcoin (and cryptocurrencies) rising or the value of Fiat getting flushed down the toilet.

How about this theory, a POS YVR tear down, is worth what it is worth due to the central banks devaluing the S++t out of the currency. So either a YVR condo is worth 800k or the Canadian dollar buys 400% less than it did 10 years ago. That is the appeal with crypto. Fixed supply and decentralised so no one can come in and increase the supply by 1000% to manipulate it’s value.

At least if rates rise, money has value again, and if you are worried just buy a bunch of BC and GTA properties, everyone else has and is, so you are all good.

#7 Ian on 09.09.17 at 4:20 pm

I have never understood how to value Bitcoin. How do we value it? I think it’s nonsense.

But as Doug says, if you can use technical charts to make a ton on it and sell it correctly, then well done.

I would not touch it.

Go gold!!

#8 Ian on 09.09.17 at 4:21 pm

#4 USD

Yes. Biggest bubble of all time. 20 trillion in debt.

#9 Ethel on 09.09.17 at 4:27 pm

https://www.cnbc.com/video/2017/06/23/heres-what-sets-ethereum-apart-from-its-rival-bitcoin.html

#10 domain on 09.09.17 at 4:33 pm

Doug, you had it correct with the title. Now you just need to fix you comparison chart by adding the tulip mania chart with the 6000% gain followed by the vaporizing.

The only difference it would seem is that the timeline for crypto ‘currency’ is shorter. The speed can partly be explained by technology facilitating the madness and drawing people and funds in quicker. The tulip mania would likely have been accelerated as well had the internet been around in 1634.

For now, the term currency is slightly misapplied to crypto’ as they are not widely accepted in the exchange of goods and services; their main exchange is with actual currency. I read that cryptos are referred to as branded currency.

One thing cryptos certainly aren’t is money. And when you have a Paris Hilton participating in an ICO, it may certainly be time to run, and very likely too late to join.

#11 BITC to CAD on 09.09.17 at 4:37 pm

#3 Bitcon

What on earth are you talking about?
You can sell your bitcoin to anyone who’s buying, including exchanges.

And yes, you can get CAD out of the exchange as well.
All the exchange wants in return is that you document yourself.
So before trading, they want copy of passport and such.
But that’s no biggie.
And don’t forget to declare capital gains with CRA.

You can get IN and you can get OUT.

Stop spreading uninformed opinions please.

#12 Lee on 09.09.17 at 4:43 pm

#8 Ian,

20 Trillion in debt for the USA is peanuts. It’ll never default.

#13 viorelli on 09.09.17 at 4:50 pm

Why bitcoin? It’s an easy answer: a preferred banking currency of the Russian mafia, Japanese Yakuza, Mexican cartels, Chinese triads, and wealthy locals who don’t want the banks and govt to know their business transactions and net worth. It keeps the highly mobile capital safe and away from the CRA’s touch.

#14 ETH on 09.09.17 at 4:53 pm

#9 Ethel
https://www.cnbc.com/video/2017/06/23/heres-what-sets-ethereum-apart-from-its-rival-bitcoin.html

Interesting video, with a good explanation for the layman.

I own a little ETH, but was very late to the party unfortunately, so didn’t do much yet.

#15 young & foolish on 09.09.17 at 5:01 pm

Speculation …. easy money …. everybody wants something for nothing. It’s been with us forever and it always burns most participants. If you can’t afford to play, better keep your distance.

Yesterday the post was about middle class participants leveraging their homes to buy rental properties. I would have added that the rental market have moved from companies to private investors. Most developers find it way more attractive to build condos and walk away with their profits in 4 years time. Who you gonna rent from then?

#16 I'm stupid on 09.09.17 at 5:12 pm

Bitcoins to me = precious stones, they both serve zero value but people prize them for no apparent reason. I might be totally wrong with my thinking and it’s ok because I’ll never buy what I don’t understand and that includes both precious gem stones and bitcoins.

#17 Renter's Realization on 09.09.17 at 5:14 pm

People are weird. They lie to each other. They play games with each other. They profit off each other. They manipulate each other. What is the point? Can you get someone else to do the work for you so you can have more sex? I guess that’s it.

#18 Robert Bassakyros on 09.09.17 at 5:15 pm

Its one of the biggest con jobs presented to the gullable.

I’m surprised that no government, SEC or BIS has stopped it.
Considering it uses currency from this current monetary system.

#19 up ZPR on 09.09.17 at 5:17 pm

you guys have been harping on at how Preferred’s would benefit from the increase in interest rates .. we have had 2 increases in 2 months and yet ZPR etf has hardly risen … ?? anyone ??

#20 I'm stupid on 09.09.17 at 5:20 pm

#14 Eth

Your video sucked, it didn’t explain why Eth has any value. It just basically says it’s better than bitcoin because it has more technology. If I buy bitcoin or Eth I don’t get to own the tech I only own a digital coin that’s less valuable than my pet rock. At least my I can throw my pet rock at guys like you.

#21 Pete on 09.09.17 at 5:29 pm

#3 Bitcon

I looked at investing but Like you I know it’s a major scam. Any dummies want to get on the ground floor of Petecoin? Give me your worthless Canadian or US currency and I will give you Petecoin that I just made up. You really can’t buy anything with it and it’s real value is zero but it will be worth huge dollars. People are beyond crazy.

#22 [email protected] on 09.09.17 at 5:30 pm

To be fair, you need to look at bitcoin as a currency. Comparuson to chinese market, bitcoin is the RMB while the ICOs and all altcoins are stocks.

How big is the total chinese stock market? Bitcoin is only 60 billion.

The discrepancy ia due to the fact that some people see it as a potential currency while others look at it as a stock. From north america’s point of view, most ppl look at it as a stock becauae there’s not much you can do with it besides holding. Now if you go to Japan and aoon, Korea, you can see it being used as currency. Venezuela, is another use case of bitcoin adoption for cross border commerce due to desperation.

#23 OttawaMike on 09.09.17 at 5:37 pm

Unless–
You are Smokingman.

#24 Doug Rowat on 09.09.17 at 5:38 pm

#10 domain on 09.09.17 at 4:33 pm

Doug, you had it correct with the title. Now you just need to fix you comparison chart by adding the tulip mania chart with the 6000% gain followed by the vaporizing.

Semper Augustus was my other title option.

–Doug

#25 Stan Broock on 09.09.17 at 5:58 pm

Bitcoin is a fraud.
Intentionally designed with intend to be destroyed at some point in time, destruction planned from the very beginning.

A lesson to teach all these wannabe rebels/libertarians who want to break out of the money/debt matrix.

There is no independence and there is no Leo to break the matrix folks.

You are owned and will be reminded of that constantly.
Suck it up and move on.

#26 Ian on 09.09.17 at 6:03 pm

#12 Lee

Well, if it’s not a default then it’s a currency crisis. And based on USD being down 12% on its weighted basket this year, it may already be underway. The chart of USD (symbol UUP) is beyond ugly, with no bottom in sight. Anyone holding USD based assets is getting crushed.

#27 H4H3RR on 09.09.17 at 6:09 pm

“You should actually own rapidly advancing markets, but only in such small percentages that it won’t matter to your overall wealth if you time them incorrectly.”

That is one giant golden nugget! I just keep collecting them from this pathetic blog as Garth and crew dole them out. Much thanks for helping me stay comfy with my investment strategy!

#28 Keith in Calgary on 09.09.17 at 6:10 pm

Bitcoin is a scam.

Here……..let us hold your electronic calculation for you……..ooooops we’ve lost it………we’re broke………someone stole it……..LOL. Remember the bitcoin “exchange” that vanished into the air ? Mt.
Gox………

What can you do with a bitcoin .

Nothing at all. It’s a fraudulent contraption that has no value or usefulness. Kinda like the fiat currency everyone is hoping they can exchange it for.

Heh……a fool and their money.

#29 MamaBear on 09.09.17 at 6:36 pm

First Block Capital Inc.’s

https://cointelegraph.com/news/welcome-to-canada-bitcoin-regulators-approve-first-bitcoin-fund-manager

#30 Stone on 09.09.17 at 6:38 pm

Does Bitcoin or Etherium pay a dividend? No. Then, no thanks. Only time will tell if this is the biggest pyramid ponzi scheme yet. Nothing about this feels transparent, no one to be held accountable. That may be my ignorance talking but until it’s properly out in the open, no thanks. Slow and steady and the tortoise won the race. As tempting as a Hail Mary this might be, it’s just asking for a kick in the teeth. Can’t ruin my boyish good looks now or my portfolio, can I? Definitely not! LOL

Cryptocurrencies will probably go the way of GTA and GV real estate. How’s that working out?

Also, #9 Ethel and #14 ETH, that video explains nothing. Just a lot of blah, blah, blah wasted oxygen. I’m not impressed. Looks more like a sales pitch to lure in suckers. And you bought near the current top for Etherium? I think you’ve made my point. Good luck to you anyways though. I just hope you didn’t put all your savings in that.

#31 TheoryAndPractice on 09.09.17 at 6:40 pm

#11 BITC to CAD
“….You can get IN and you can get OUT.
…… ”
============================================

Could you please explain the best way to get in $100 CAD to BitCoin and get it out in Canada , assume BitCoin price is not changed in between. At the end of the day how much do you get back ?

#32 Pete from St. Cesaire on 09.09.17 at 6:46 pm

Bitcoin will fall and here’s why:
The other cryptocurrencies that are gaining prominence these days are designed to be a direct threat to Bitcoin. You see, Bitcoin’s strength is that there is only a limited quantity of them that will ever exist. They can’t be printed to infinity. However, if other cryptocurrencies take hold and overtake Bitcoin in value or popularity it will be the death of Bitcoin (and all cryptocurrencies) since it will then become evident that although Bitcoin is limited as to quantity there is no limit to how many new cryptocurrencies can be created. Some people already know this (at least subconciously) but since Bitcoin has remained the dominant one by far the reality of it has not yet sunk in. If people are willing to just jump to the next fashionable cryptocurrency that comes along Bitcoin will become worthless. Who wants to miss the boat on the next big thing? Who wants to be stuck with something that is falling out of fashion? That’s the real reason behind the big push on etherium and some others.

As for it’s security: I don’t believe that Bitcoin is secure. If it was then why does the wallet program (on your own computer) show you that there are incoming transactions for your account before the ‘block’ containing that info even gets finalized and released into the blockchain and before it reaches your computer. There must be some sort of secondary connection going on at all times. The only cryptocurrency that I’ve seen that doesn’t seem to alert you before hand that a transaction is incoming is DEVCOIN. Now, I’m not an expert on how Bitcoin functions so I may be wrong about this point; but someone should bring up the matter with those in the know.

#33 Pete from St. Cesaire on 09.09.17 at 6:50 pm

#3 Bitcon: When I read this about the various Bitcoin exchanges I realized this was whole Bitcoin craze is well organized global con job.
—————————————————
You’re misinformed. There are even Bitcoin ATM in Montreal & T.O. that alow you to withdraw your Bitcoins as Canadian dollars. But keep in mind that many of these services have a huge spread between what they charge for a Bitcoin and what they’ll pay to you to buy back that Bitcoin. 35% spread some places.
But yes, you can turn your Bitcoin back into dollars quite easily.

#34 Stone on 09.09.17 at 6:53 pm

#29 Stone on 09.09.17 at 6:38 pm.

Just to add, I wanted to see how money gets put in your account when you sell bitcoin. I had to laugh. Wires? Seriously? Isn’t that the same scam as when they advise you to wire money for the “small” administration fee for them to process the paperwork for that $10 million sweepstakes contest you supposedly won. Oh wow, this is going to eventually be so ugly. First ones in will see some money coming back to them just to get the greed going for others and then the pyramid scheme will collapse when the latecomers throw their money in and it all vapourizes.

#35 Mt Gox on 09.09.17 at 6:58 pm

#28 Keith
Remember the bitcoin “exchange” that vanished into the air

That’s a matter of not leaving your coins in the wallet of the exchange.

Once you have a balance on the exchange, you move the coins out of the exchange, into your own wallet, and your done: no one can steal them.(*)

(*) until they build quantum computers I guess? But I would not worry about that just yet.

#36 Ponzius Pilatus on 09.09.17 at 6:59 pm

#113 Terrence on 09.09.17 at 9:45 am
Hahahaha “several UNIVERSITY ECONOMISTS” now thats funny!!! Seriously?

Where do you think they teach economics? — Garth
—————
Garth,
You should know.
Many of them are regular commenters on your blog.

#37 Ponzius Pilatus on 09.09.17 at 7:03 pm

The graph and chart boys are back.
How many chart boys do you recon Buffett has on his payroll?
Go with your gut, blog dogs.

#38 For those about to flop... on 09.09.17 at 7:13 pm

Robax, I put this one up in late June ,but I will put it up again as it sort of ties in with your post and someone who missed it the first time might glean something from it…

M43BC

“The Bitcoin Economy, in Perspective
As you see on this head-spinning graph below, the total amount of money in the world is $84 trillion. But that includes money in the bank. In physical coins and notes, the total global money supply is only $31 trillion. See the problem? Hence the rise of Bitcoin and other cryptocurrencies. Bitcoin is the cryptocurrency that refuses to die. Its demise has been predicted numerous times, and one expert calculated that its value is eighteen times more volatile than the U.S. dollar. Yet the virtual money keeps going from strength to strength.”

https://howmuch.net/articles/worlds-money-in-perspective

#39 Keith in Calgary on 09.09.17 at 7:43 pm

Found this gem online.

—————–

The Birth of “Bitcon”

Two friends, Bob and Satosh are sitting around after an evening of consuming copious amounts of some especially wicked skunk. Bob says to Satosh:

Hey Satosh……..I have a genius idea

Yeah, what is it ?

You know that app you coded…….the one that churns out the useless SHA algorithms ?

Yeah ?

LOL……..lets sell them as digital currencies !

Dude…….you are wasted, here, have another bong hit.

No, seriously. We get that graphic artist you know create a slick image of a “gold” coin, and then we can further confuse the rubes by telling them their coins have to be “mined”, as if they were real, physical metals !

Dude… you are insane ! What kind of moron would buy something like that ?

Bob: Oh… I don’t know. Remember that now worthless token you paid stupid money for on E-Bay?

They sit there and stare at each other for a moment, and then both burst out into torrents of tear stained laughter

They are still laughing today.

#40 Akashic records on 09.09.17 at 7:46 pm

Just in time

http://www.zerohedge.com/news/2017-09-09/howard-marks-graciously-admits-he-was-wrong-sees-no-reason-why-bitcoin-cant-be-curre

Howard Marks Graciously Admits He Was Wrong: “Sees No Reason Why Bitcoin Can’t

Billionaire investor (and self-professed “Bitcoin Dinosaur”) Howard Marks made headlines in July when he called Bitcoin a “unfounded fad.. a pyramid scheme” in one of his famous memos.

However, in his most recent Oaktree Capital memo, Marks retracted his position after being educated by some of his Bitcoin-loving friends regarding the cryptocurrency.

#41 For those about to flop... on 09.09.17 at 8:03 pm

Pink Lemonade stand in West Vancouver.

This is a case that was in my Possible Pinkies folder and they just pulled the trapdoor to fall into official Pink Lemonade territory.

Picked up for 5.15 in April 2016 ,if you put 5% down on this bad boy your mortgage would be 22k a month for a house built in the early 70s.

Sounds like a good deal…

M43BC

1418 Bramwell Road, West Vancouver

Feb 27:$5,760,000
Sep 8: $5,380,000
Change: – 380000.00 -7%

https://www.zolo.ca/west-vancouver-real-estate/1418-bramwell-road

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAyOUQ0VQ==

#42 Doug Rowat on 09.09.17 at 8:15 pm

#19 up ZPR on 09.09.17 at 5:17 pm

you guys have been harping on at how Preferred’s would benefit from the increase in interest rates .. we have had 2 increases in 2 months and yet ZPR etf has hardly risen … ?? anyone ??

ZPR has advanced about 3% in the past 3 months. A significant move for a preferred shares. ZPR has also been on an absolute tear over the past year as the market began to anticipate a strong economic recovery for Canada and BoC rate increases. What more were you looking for?

–Doug

#43 ATM on 09.09.17 at 8:17 pm

#29 TheoryAndPractice
Could you please explain the best way to get in

An expensive but quick way is a bitcoin ATM.
https://coinatmradar.com/city/170/bitcoin-atm-vancouver-ca/
When I used it years back, it did take a scan of my palm print though.
Decide for yourself if that worries you or not.

I would not worry about fee or conversion loss, or spread.

Who cares if the exchange or ATM takes 10% if the capital gains over a few years is 5000%?

If you want a smaller spread, use an exchange like coinsquare.io

#44 InvestorsFriend on 09.09.17 at 8:41 pm

Bitcoin

Would not touch it. Coincidentally took a picture of a Bitcoin ATM at Beer Bros Gastor bar in Regina last night as I passed through that place on a cross-Canada road trip. I recommend this trip, wow is this country empty. Wow does Ontario need to spend on its section of the TransCanada in Northern (actually central to Western Ontario) Who knew multiple 50k limits sections on the TransCanda were okay?

Read a book on Bitcoin. Learned it is both totally open and transparent and totally anonymous. Huh? I figure the authors of the book really had little clue what Bitcoin and the distributed ledger is. Either that or they can’t write. They made a lot of weird claims. This was Al Rosen and his boy Mark, if I recall correctly.

#45 Nonplused on 09.09.17 at 8:44 pm

I don’t understand the bitcoin thing. How can a bit have value? At least the bits that represent you bank account are in theory backed by the bank who is obligated to give you paper money if you want which the government is then obligated to take in payment of your taxes, but if a bitcoin exchange goes down what’s behind it? The only thing there is behind bitcoin is that someone else will give you dollars for one or some online merchants will accept them. As long as the power is working.

Makes gold and silver seem a lot more reasonable if you ask me. Gold and silver can’t go to zero because they have industrial uses and also can be made into nice bling. But what can you do with a bitcoin? It can’t even exist outside the computer network. It’s a concept only.

My son unfortunately brought a bunch of classic Pokemon cards he’d been given by his sister to school and promptly lost them all to an older kid who took advantage of the fact he didn’t know how to play and wasn’t supposed to be playing “for keeps”. It was a sad day because my son was only about 7 and didn’t want to admit his loss so he set about making his own Pokemon cards with incredible scores so he could win his cards back. I tried to explain that no one was going to tender a legitimate classic Pokemon for something you drew yourself. It was quite a disappointment for him that he wasn’t going to be able to use fraud to rectify having been taken advantage of. But that is the way it works just walk into any casino in the land and observe all the folks being taken advantage of and unable to rectify their mistakes via fraud.

Bitcoin is just that. An attempt to create your own Pokemon cards because you don’t trust Nintendo or need a new fix. But as in real life, when push comes to shove nobody accepts a fake Pokemon card. If it doesn’t look legit nobody will accept it.

It does create a question though as to why paper money is so resilient. But there are things that back paper money. For example you can pay your taxes and you can pay your mortgage. That is backed. The bank will never say “no, you cannot use the digits you have in your checking account to make your mortgage payment this month because we no longer recognize them.” Bitcoin on the other hand only need one good breach of the system and the whole thing will go to zero overnight.

So I disagree with Ryan. It isn’t any wiser to have even a small amount of money in bitcoin than it was to have a small amount of money in Bre-Ex. They were/are both frauds. When you bought Bre-Ex you bought a piece of paper with nothing behind it (although that was a fraud). When you by bitcoin all you get is a private entry in a public ledger (not sure how that works but I think that is what it is) and nothing more. It is impossible for me to understand how it is anything but a form of exchange. It shouldn’t be able to “go up in value”, because there is no value there, it isn’t useful for anything and it isn’t backed by anything or anybody. I’d rather have a stack of silver coins, a crate of bottled water, a case of rye to flavor the water, and a case of MRE’s than a bitcoin any day.

#46 InvestorsFriend on 09.09.17 at 8:49 pm

Money TOTALLY misunderstood

“The Bitcoin Economy, in Perspective
As you see on this head-spinning graph below, the total amount of money in the world is $84 trillion. But that includes money in the bank. In physical coins and notes, the total global money supply is only $31 trillion. See the problem? Hence the rise of Bitcoin and other cryptocurrencies.

************************************
I don’t see the problem you see. The real problem is people who don’t understand that money is simply a claim check on goods and services and can be digital. Soon coins and paper money will be history. Money however and U.S. and Canadian dollars will live on for many many decades to come.

Money: a unit of exchange, a unit of accounting and a SHORT TERM store of value.

BTW there is VASTLY more than $84 trillion in wealth in the world. All financial wealth can be MEASURED in dollars. Most wealth however is NOT in the FORM of dollars or any other currency

Read the unauthorized biography of money by I believe Felix something or other.

#47 InvestorsFriend on 09.09.17 at 8:55 pm

OFF TOPIC

Aeroplan is (in my opinion) an unethical and incompetently ran company that expires points after a year of inactivity. Also they appear to circling the drain. If you have a TD Aerogold card you can switch to other travel points or cash back without even getting a new credit card number. I recommend that option.

Aeroplan in my view destroys rather than creates loyalty.

As far as points as currency, Canadian Tire money is a far better option. Never has a Canadian Tire note been expired for lack of use or old age. I have posted before that Canadian Tire is one of Canada’s best managed companies. What a bargain it was when it cratered in 2011 due to the threat from Target (laugh out loud!!!)

#48 Smoking Man on 09.09.17 at 8:59 pm

Smokey here Reporting on Hurricane Irma.

Every damn hotel room from Tallahassee to Texas is booked with Florida refugees. Got to be a bet in there to make some loot. Haven’t been sobar enough to think of one.

Heading up to Memphis tomorrow for a few days. I finaly make 7 stars but can’t extend my stay. Florida residents have priority. And that’s a good thing.

Two days there doing elvis karaoke then coming back to Mississippi. This place is cheap if you can stay out of the casinos.

Anyone looking to retire. This is the place.

Smokey over and out. Oh bail on bit coin.

#49 kbean on 09.09.17 at 9:10 pm

A bit old but very interesting. Why the authorities haven’t acted on this so far?

https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2017/06/Addicted_to_Debt_2017.pdf

#50 ANON on 09.09.17 at 9:11 pm

There’s a tulip everywhere you look. A beautiful field of tulips as far as the eye can see.

#51 up ZPR on 09.09.17 at 9:14 pm

thanks Doug

yes i forget that markets often rise in ANTICIPATION .. such as the recent rise in US stocks …. i know that ZPR has risen a lot . . i guess i kinda expected it to do a big jump when the rates did actually rise ..

#52 Doug t on 09.09.17 at 9:20 pm

I opened a wallet for Bitcoin 4 years ago and bought a very small amount – haven’t bought any since and still can’t wrap my head around it lol – BUT I do believe the international banking system knows crypto currency is the future to control the masses wealth – I don’t like it at all but it will happen 100% – how often do you use cash? It started with credit cards and then debit and the future is cryptocurrency – 1984

RATM

#53 For those about to flop... on 09.09.17 at 9:20 pm

#46 InvestorsFriend on 09.09.17 at 8:49 pm
Money TOTALLY misunderstood

“The Bitcoin Economy, in Perspective
As you see on this head-spinning graph below, the total amount of money in the world is $84 trillion. But that includes money in the bank. In physical coins and notes, the total global money supply is only $31 trillion. See the problem? Hence the rise of Bitcoin and other cryptocurrencies.

************************************
I don’t see the problem you see. The real problem is people who don’t understand that money is simply a claim check on goods and services and can be digital. Soon coins and paper money will be history. Money however and U.S. and Canadian dollars will live on for many many decades to come.

Money: a unit of exchange, a unit of accounting and a SHORT TERM store of value.

BTW there is VASTLY more than $84 trillion in wealth in the world. All financial wealth can be MEASURED in dollars. Most wealth however is NOT in the FORM of dollars or any other currency

Read the unauthorized biography of money by I believe Felix something or other.

////////////////////////

I’ve seen you make the same mistake before.

Someone puts up an article and you try to argue a point with them when all they did is post a paragraph form the article.

If you disagree with the article leave your comment on the howmuch website and leave me out of it.

You have done this too many times…

M43BC

#54 ETF index investing on 09.09.17 at 9:31 pm

ETF investing in the largest block of indexes is seeking low risk, safe investment in exchange of relatively low return. It is a herd act at heart, offers convenience and the safety of the masses.

Speculative investment works fundamentally differently, it is based on individual convictions: right or wrong.

There may not be anyone who become billionaire in investing ETFs, most billionaires seem to be people who are willing to take the highest risk with their money as venture capitalists, currency speculators or people picking individual assets, like Buffet.

Most people on this blog are probably subscribers of Garth’s investment philosophy, of slow and steady growth over a lifetime.

Members of this school would take a look at any speculative asset class as they look at Bitcoin.

Investing style is extremely personal, it basically captures the essence of the individual.

For this reason there is really no point of arguing about Bitcoin, or other highly speculative investments for people who simply don’t have the affinity for taking considerably higher risk.

There is nothing wrong about choosing safety vs risk, it’s just different cup of tea for different people.

There is a reason why talking about weather works so well.

#55 InvestorsFriend on 09.09.17 at 9:36 pm

To Understand Money…

Consider that wealth as in land, houses and goods and services and paintings etc. of all kinds can be purchased with many different currencies and in fact can exist even in the total absence of money of any kind.

Money however is pointless and of no value without the various forms of wealth that it can purchase. Money is wealth only to the extent it can purchase real tangible and intangible wealth. Hence money can be digital and fiat and that creates absolutely no problem (except in the minds of gold alarmists and various misinformed people).

Which came first, real wealth or money? Real wealth of course. But these days money is essential to the economy that incents people to create ever more real wealth. It is truly a wonderful system and has created a bounty of increased standards of living per capita that has risen hugely despite huge population gains.

#56 Smoking Man on 09.09.17 at 9:42 pm

The hottest chick I ever sceen in my life pulls up a seat next to me. The band is playing come together with the stage strobe light pulsating.

I fake an epilepsy, episode. I fall to the floor and start shaking. She’s all over me. I STOP shaking and hold my breath. She plants theys amazing lips around my face and asks jesus to help

I come too. Will she tell her boyfriend about that epileptic toung.

Ok, It did not happen but writing while being hammerd. You can come up with cool ordinal stuff.

A Sobar mind can’t even get close.

#57 InvestorsFriend on 09.09.17 at 9:47 pm

Response to Those About to Flop who chastised me above:

Someone puts up an article and you try to argue a point with them when all they did is post a paragraph form the article.

If you disagree with the article leave your comment on the howmuch website and leave me out of it.

***************************************

Okay, but note I did not even attribute the quote to your name. You posted something and I disagreed with it. I agree my disagreement is with the authors so should not have mentioned “you” in my response. I did not look close where the quote came from. I saw it HERE and I disagreed. Some people here might be interested in learning.

#58 Bitcon on 09.09.17 at 9:51 pm

@11 BITC to CAD

If it is as easy as you say, then why are people on forums having really difficulty getting their money back into CAD dollars? Read the whole chain of forum responses…not just the first few that appear to explain the so-called “easy” steps to getting your money.

Don’t believe me? Then try to pull your money out and tell us blogdogs how it works out for you?

https://community.coinbase.com/t/how-to-sell-btc-for-canadian-users-please-help/7564/8

#59 T on 09.09.17 at 9:53 pm

#21 Pete on 09.09.17 at 5:29 pm

I hear the tooth fairly leaves petecoin under the pillows of children as a trade for their rotten teeth. Any truth to that?

#60 Ian on 09.09.17 at 10:06 pm

More financial lessons from the online chess world.

Playing today and told someone about the blog and I go ‘we’re talking about Bitcoin today’ and he goes ‘ya what is that I don’t understand it’ and I’m like keep it that way lol

#61 BTC to CAD on 09.09.17 at 10:21 pm

#58 bitcon
If it is as easy as you say, then why are people on forums having really difficulty getting their money back into CAD dollars? Read the whole chain of forum responses…

Dude, that is one exchange (coinbase) that is acting difficult.
Just transfer to another exchange, like Melanie did in that thread.

I quote:
Also, I successfully withdrew half of my bitcoins from Coinsquare into my bank account. It took 3 days for the transfer to complete itself but I’ve been very satisfied thus far with the integrity and customer service of Coinsquare.

Or use an ATM.

Not taking out mine, gonna ride it to $1M coins first.

#62 bigtowne on 09.09.17 at 10:22 pm

Apple; Bitcoin; somewhat alphabetic you betcha.

Ok. So up in the great white north we had our own exotica: Bre-X; Northern Telecom and then there was
the big oil hulabul that cratered the oil sands but we showed not too shabby in the world of bubles and price spikes. All you see and hear in the media are hideously ugly bank CEO’s with the same hairstylist as our ex-PM Stephen Harper and economist doing their internship dare us to disparage their “smooth sailing with not one black swan for eons”.

#63 Smoking Man on 09.09.17 at 10:27 pm

If missed my last post to a song.

Here are the words.

https://www.azlyrics.com/lyrics/metallica/theunforgiven.html

#64 For those about to flop... on 09.09.17 at 10:28 pm

#57 InvestorsFriend on 09.09.17 at 9:47 pm
Response to Those About to Flop who chastised me above:

Someone puts up an article and you try to argue a point with them when all they did is post a paragraph form the article.

If you disagree with the article leave your comment on the howmuch website and leave me out of it.

***************************************

Okay, but note I did not even attribute the quote to your name. You posted something and I disagreed with it. I agree my disagreement is with the authors so should not have mentioned “you” in my response. I did not look close where the quote came from. I saw it HERE and I disagreed. Some people here might be interested in learning.

////////////////////////////

So let me get this straight.

You didn’t bother to read the article and also didn’t bother to see if I had attributed the quote to someone else but felt the need to respond.

Too eager to argue…

M43BC

#65 Sixtyfourk on 09.09.17 at 10:29 pm

Re: #3

Converting your bitcoin and Ether into CAD is easy at exchanges like Kraken or Quadrigacx.

The average person doesn’t understand how wallet security works in Bitcoin and Ethereum, so they tend to blame anyone else for their stupidity (Mt. Gox anyone? If you are leaving your Bitcoin or Ether in an exchange account, you are asking for trouble).

I’m not a bitcoin fan, but Ethereum is a game changer.

Consider this simple example:

I agree to sell your product X on my website. I will take 10% of all money received and you will receive 90%.

If we try to do that in the “real world”, we need auditors, we have to deal with payment processors, charge backs, stolen credit cards, etc. etc. etc.

In Ethereum, we just write a function like this (This is greatly simplified, contains rounding errors and probably not even legal Solidity)

function purchase() payable {
// We arrive here if someone has sent us msg.value ETH
your_balance += msg.value * 0.9
my_balance += msg.value * 0.1
// do something to deliver the actual product to you
}

Then we need functions for you to withdraw your ETH and for me to do the same.

However, the important part is that everyone can see that all inbound ETH is split according to our agreement. There is no way for me or anyone else to change it. There is no need for auditors.

This will change business.

That doesn’t mean you should buy ETH.

#66 Zen on 09.09.17 at 10:54 pm

#19 Up ZPR
you guys have been harping on at how Preferred’s would benefit from the increase in interest rates .. we have had 2 increases in 2 months and yet ZPR etf has hardly risen … ?? anyone ??
———————————
Here is a typical advisor would tell you. If Preferred did go up, I told you so. If it didn’t, it has already been priced in.

#67 InvestorsFriend on 09.09.17 at 10:54 pm

What me. argue?

Flop said to me:

Too eager to argue…

M43BC

********************************
I did not mean to argue, just to educate.

I saw a paragraph that was someone jumping to the wrong conclusion.

“As you see on this head-spinning graph below, the total amount of money in the world is $84 trillion. But that includes money in the bank. In physical coins and notes, the total global money supply is only $31 trillion. See the problem?”

This paragraph wrongly suggested that it is a problem when coins and notes are less than the amount of money. Wrong. I explained a bit as to why.

The fact that there is no problem with fiat currency is relevant to the fact that Bitcoin is probably not needed and is a volatile and dangerous “investment”.

#68 Ian on 09.09.17 at 10:55 pm

#65 Sixtyfourk

I’m not following why Etherium would allow the functionality you describe but Bitcoin wouldn’t?

#69 Boots on the Ground in Ptown on 09.09.17 at 11:15 pm

#36 Ponzius Pilate

I guess I’ll defend this.
I posted link a couple days ago, assume same study Garth sited. Someone else wanted to read the article, so heres the link below again.

Personally, what Mark Hanson in US shows in his data makes lots of sense to me. (its the same if not worse this time around, 30% of the housing market has been sheer flippers/speckers, during this “recovery”.) Hence I suppose why we’re seeing this “crackdown” on laundering money in high end US real estate. Living here, i see this first hand. But it has turned and turned fairly quickly in our corner of WA, like I thought would happen beginning last fall/winter. My parents have piped down on the constant asking about when we’re going to buy since prices here will always “go up”. Technically a split market now from a raging sellers market summer 2016 which I believe was the peak here. At that point it was my Boomer parents and their friends who were buying complete mold infested trailers on property, cleaning up the grounds, selling the trailer off to folks who revamp them and selling the piece for a few quick bucks or else lipsticking the trailer and turning it around for exhorbitant money. There was sheer desperation. Within a 3 mile radius of our rental in the country I can think of 4 new RVs with people living in them, parked on friends/family’s land. Displacements from a recent sell, or some of the huge influx of newcomers we had to the Portland /Seattle area this past 2 years. (I forget the # currently but its been a ton of people. )Thats just within 3 miles of here, and its the same picture all over the county/muni. High density stuff has went in at a dizzying rate which feels like its taken some of the demand away finally. I believe tech has been the biggest driver as Cali companies have even paid some employees to move from there. WA/OR always affected by Cali. Infrastructure and services no way designed to handle this fast of an influx so now on what used to be “out in the sticks” roads, we see a lineup of cars (2 lane highway) stretching 5 mi or more at rush hour, commuters from Portland.
My pointless ramble for the day.

#94 Boots on the Ground in Ptown on 09.06.17 at 12:42 pm
http://mitsloan.mit.edu/newsroom/articles/rethinking-how-the-housing-crisis-happened/

#70 Doug Rowat on 09.09.17 at 11:34 pm

#66 Zen on 09.09.17 at 10:54 pm

Here is a typical advisor would tell you. If Preferred did go up, I told you so. If it didn’t, it has already been priced in.

Oh, I’ve said incorrect things on this blog. Trump will lose in November being a beauty. But I did, most definitely, tell you preferreds would go higher.

http://www.greaterfool.ca/2016/10/page/2/

–Doug

#71 Bitcoinaire on 09.10.17 at 12:46 am

Haha, enjoy your 3% “gains” from diligent research and analysis of stocks and index funds granpa…

2017 has been a great environment for crypto-currency. You people are all passively witnessing the creation of a brand new financial instrument, and the price volatility represents the market’s attempts to price it out.

Oh, and you want a great example of frenzied, overpriced and astronomical prices that don’t even remotely represent corporate profits or book values? Just scan every major stock on the Nasdaq Composite index…

This is still the early stage. Few of the big players are publicly involved, but even the big boys like Goldman can no longer ignore 4,000% profits.

#72 Bitcoin etc are all scams on 09.10.17 at 1:04 am

Bitcoin, Ethereum, etcetera, are all scams. The prices have since the start been driven up by a fake process. Specifically, all a scammer needs to do is set up thousands of accounts, pretending to be different individuals, and then start “trading” his own bitcoins between his own pseudonyms, at ever increasing prices. Naive bozos who hear about it through fake news (most bitcoin stories in the old days were all fake outlandish stories concocted just to get visibility to the public) think prices are going up, and their greed dribed them to buy at the artificially increasing prices. This is why the price of bitcoins etc will never collapse. When you see downward movements, many of these are artificially caused by the same fraudsters, in an attempt to make newcomers believe now is a good time to buy. It is all just one giant bait scheme. In the end, these “currencies” are not only not currencies at all (especially for those who believe in the chartalist notion of money); they are not even secure. Namely, all it takes is a handful of “miners” to collude to blow up the entire system. A 50+ percent collusion can invalidate all coins since the last “checkpoint” by simply revising the blockchain fork moving back to that point. And does anyone realize those checkpoints ae decided on by a handful of programmers? There is nothing distributed about that at all. In short, kt is completely amazing that so many people are out of sheer greed falling for these bogus schemes, without having a clue how they actually work. Now, I could also explain you what is wrong with these schemes at the hash function level and public key signature schemes, but there really is no point since the mere possibility of collusion by a small group of miners invalidates the whole approach by itself. Do people even know the leading miners are already meeting with each other, for example to vote on whether to support sidechains and such, or block size change proposals? It is all like a bad dream, and makes you realize how many fools are out there. Sigh.

#73 Oft deleted much maligned stock picket on 09.10.17 at 5:05 am

#16 I’m Stupid……. right on….. ‘ gem stones’? De Beers has diamonds in silos like Saskatchewan farmers have wheat. If a single farmer had bought all the other farmers wheat and held a monopoly then arranged that only he could sell it by the single grain then MSG would be cocaine and a single kernel would command armies of slaves. As a kid, my second trading venture was coloured semi precious stones. I did what Adam Smith suggested and ” bought was what abundant and cheap and transported it to where it was rare and dear”. But Smiths idea is as outdated as the value of diamonds are today. I bought sapphire, emerald, ruby etc literally by the bucket where they were mined and cut by the weight…in the third world….and sold the stones individually for thousands of percent mark ups to the gullible western consumers. So….even as a kid, fifty years ago….a third rate businessman in the first world could do quite well in the third. ‘ Gem Stones…..Bit Coins….Tulips…..Trudeau….all the short lived crack cocaine in their time….but over time…as worthless and as dangerous to your financial well being as a Liberal Party membership card or a fanciful faux millennial wanna be biker sleeve tattoo. Invest in good companies that pay dividends and stay away from stupid people.

#74 Gravy Train on 09.10.17 at 7:39 am

#67 InvestorsFriend on 09.09.17 at 10:54 pm
#64 For those about to flop… on 09.09.17 at 10:28 pm
#57 InvestorsFriend on 09.09.17 at 9:47 pm
#53 For those about to flop… on 09.09.17 at 9:20 pm
#46 InvestorsFriend on 09.09.17 at 8:49 pm
#38 For those about to flop… on 09.09.17 at 7:13 pm

Over to you, Flop! Last count: 3 pings, 3 pongs. :)

You two should take your act on the road—as a comedy duo and road show! You’re not as funny as Basil and Manuel—but almost! :)

#75 I'm stupid on 09.10.17 at 8:27 am

#73 Oft Deleted

I just don’t get it, how can people be so stupid? I’m calling out every bitcoin bull to give me one reason why a bitcoin has any value at all. Untraceable is not a reason because I’m not a criminal and bitcoin isn’t exactly untraceable it’s just more difficult to trace. Even gold has intrinsic value as its the best conductor of electricity and is vital for sophisticated electronics. Toilet paper has more value than bitcoin because I can wipe my ass with it.

#76 bubu on 09.10.17 at 8:59 am

Hei guys, when OSFI will announce if they change something or not for the mortgage qualification?

#77 Ian on 09.10.17 at 9:08 am

#71

Let me tell you something about Goldman: whatever they say publicly to do, they are doing the opposite in the background. So their new-found enthusiasm for cryptos to me means their proprietary traders are shorting as much as they can in the background.

Don’t forget what they did during the subprime crisis. They had no problem making billions on the backs of people’s misery.

Not to mention driving up commodity markets when they decided those futures were the next ‘playground to make money in’, which caused food shortages and starvation.

Wall St has been specifically lobbying NY State and clowns like Chuck Schumer to regulate cryptos as they see it as a threat. So if you hear them publicly endorsing it, alarm bells should be ringing.

#78 westcdn on 09.10.17 at 9:36 am

Someone asked about forecasting exchange rates and got me to thinking about the issue. My prime concern is what a loonie will buy me so that is my orientation. My first goal is to get the concept. The devil is in the details and I only deal with them when I have to so I develop simplistic ideas.

Our own domestic economy doesn’t matter as we owe the money to ourselves but Canada imports most of food and goods we take for granted therefore we have to sell commodities (rocks, energy, wood …) as we seem, as a whole, incapable currently of competing successfully with value added goods.

Our exchange rate with the USD (which is the reserve currency and prices commodities) gathers most of my attention. Conceptually, if we run a global trade deficit then we need to import capital through selling assets or debt. We can also use our reserves (savings). I would not lend money to a deadbeat unless I was feeling charitable so interest rate differentials between trading partners are important.

I limit myself to USD/CDN exchange as it really determines what I can buy from the rest of the world with my loonie. My theory is that if both the US of A and Canadian economies have the same internal interest rates then the exchange rate is stable given the global trade deficit/surplus of each country is stable. Assuming both the US of A and Canada economies are managed competently then a change in global trade balances or domestic interest rates will determine the biases of whether the USDCDN exchange rate will fall or rise. I wish life was so simple but I watch. At the end of the day, it is the productivity of people that matters.

Currently, there is an upward lift for the loonie. As for a “fair” exchange rate, I will leave that to the detail experts. Personally, a 20% cent discounted loonie or less is required to incentivize sourcing Canadians as non-commodity suppliers but we don’t have much value added goods to supply nor can we ramp up quickly except in niche markets. This leads me into block-chain technology.

I have heard rumours the IMF is considering to use “Distributed Ledgers” for SDR’s. An SDR (special drawing right) is a token whose value is derived from a basket of major currencies. http://fx.sauder.ubc.ca/SDR.html

A Distributed Ledger system looks a lot like Bitcoin and wallets. All the Central Banks in the world would be members and SDR’s would become the reserve currency. It would also pave the way for cashless societies. This view explains. https://dailyreckoning.com/president-trump-america-rude-awakening/

It is alarmist but that seems to be the world is these days. I will leave social engineering to the politicians and economists. I saw pictures of people evacuating Miami and noticed one showing a golf cart on a trailer – gad.

P.S. Per a previous post, I wrote the next rate increase is a long ways away. In my mind that means 6 months for a BoC rate decision therefore the March 2018 timeframe. My bet right now would be a ¼ point increase. Debt is still too cheap.

#79 NoName on 09.10.17 at 10:06 am

@75

Small correction on gold electric Al condutivity, it’s good but not best, Silver is best, and copper is also better than gold. What is working for gold is that is most inert metal so it doesn’t oxidize, and it’s used in electronic just for that reason, so resistance stay constant because let say very low voltage is used. Is other materials were used there would be chance to one “chip” sends 1 and read “chip” read 0 due voltage drop.

As for Bitcoin, personally I don’t like it, but blockchain could be useful. Just think here in comments section, it would get rid of imposters and pedantic posters right on a spot.

Bit on a tangent here,
Few days back I called friend just to ask him one question, and question was, am I becoming dinosaur?, I didn’t finished my question, answer was yes. Not the answer I was expecting but it was honest answer.

Anyway buy end of conversation I was told learn c++, I asked why, he answer back, Bitcoin is programmed in it. Now very scary part for me.
Few yrs back I got Arduino board hoping I’ll get my daughter interested in programing, (simple c) didn’t work so I keep playing with it, I struggled so much to make one subrutine working, and when it was working wasn’t working exactly I Invision it…
I think that I am doomed…

#80 I'm stupid on 09.10.17 at 10:09 am

#40 Akashic records

You didn’t even read the article you moron. You just read the headline and concluded he thinks bitcoin is a great idea. You just cherry picked a couple of paragraphs to validate your position. Read the conclusion of the article where he says:

Thanks to the people who took the time to educate me, I’m a little less of a dinosaur regarding Bitcoin than I was when I wrote my last memo.

I think I understand what a digital currency is, how Bitcoin works, and some of the arguments for it.

But I still don’t feel like putting my money into it, because I consider it a speculative bubble. I’m willing to be proved wrong.

#81 followers on 09.10.17 at 10:21 am

#68 Ian on 09.09.17 at 10:55 pm

#65 Sixtyfourk

I’m not following why Etherium would allow the functionality you describe but Bitcoin wouldn’t?

===

How could you, without learning?

#82 S.Bby on 09.10.17 at 10:55 am

Bitcoin is like Bre-X ; both mined from nothing.

#83 Sixtyfourk on 09.10.17 at 10:56 am

#68

Bitcoin and Ethereum are different block chain networks — they are run by completely different code bases. They are only related because they both use the idea of block chains.

At the basic level a block chain isn’t complicated — it is simply a ledger that cannot be changed once it is written to.

Bitcoin only stores transaction information on the block chain. (That is, address X sent Y bitcoins to address Z)

Ethereum also stores transactions but added the ability to store code and perform computations with the resulting state of those computations being stored on the block chain.

Re #72:

Wow. Being software, block chain networks have bugs, vulnerabilities and attack vectors. However, you have greatly over simplified the risks and the ease that these networks can be exploited.

I am not saying that the PRICE of a bitcoin or the price of an ETHER is reasonable. The price of both are probably in a bubble.

However, if you are dismissing the technology behind Ethereum, in my view, it is as if in 1988 you said “These modems are noisy, nobody will ever use the Internet.”

#84 Bitcoiner on 09.10.17 at 10:57 am

I lost a bundle, including my house, in the 2001 tech bubble. Terrible experience.

So far since 2014, I have cashed in over $18,000,000 with bitcoin.

Luck? Sure. Being a dumb but persistent gambler?
100%

After our real estate crashes, I’ll be buying properties.

#85 Greg on 09.10.17 at 10:58 am

BTC is the real deal. Not a tulip or ponzi scheme. It’s electronic gold that will have value as long as people choose to accept it. And people are choosing to accept it. Same concept as gold, silver, or USD. It’s here to stay.

And it’s easy to convert to/from CAD USD or other currencies. More efficient Exchanges are popping up and they work well with minimal fees. Do some research.

#86 TurnerNation on 09.10.17 at 11:08 am

Arg a bitcoin blog.

Someone pointed out, our elite behind-the-scenes technocrat rulers do not want us using our brain.
Giving us meaningless ideas like “We use only 10% of brain capacity.” (Never offing tips on increasing this).
C’mon – nature has never designed something like this ineficiency.
We are big dumb oxen to be herded and stampeded.

So what do they do? Collect data on us. All those Luminosity mind, Ancestry DNA things, along with “Smart” phones an in home “speakers” [microphones] from the FANG companies. Unimaginable A.I. at work in real time.
These know just the news story and computer generated video/pictures to outrage us. By each strata of society. Our enemies and heros they give us. MAGA, SJW, L/R.

Science? What happened to nanotech which was supposed to cure us. Not a peep these days. Hint it’s been deployed as a weapon. Science? Only Wifi and GPS, both run by the military:
https://en.wikipedia.org/wiki/Global_Positioning_System

We got nothing but a data collection prison. Someone pointed out, what’s the best tech we know of: some would answer Stealth Bomber. You know the one which was designed over 30 decades ago!Sure, 1970s tech is the best they give us in the open

Award for the Most Flouridated Poster goes to: Mark

#87 Ian on 09.10.17 at 11:23 am

#81

That would be why I asked…in the hopes that someone could explain it. Bitcoin isn’t able to divide incoming revenue amongst different parties?

#88 Randy on 09.10.17 at 11:24 am

I’ve been following bitcoin since 2011 when it was just a few dollars per coin. I’m a software engineer by trade and understand the technology at a deeper level than most. I’ve also studied the economics of it as I’ve read countless posts and articles over the years. (I could write a book on the subject by now.) I can make arguments both for and against. However, I ultimately fall into the camp of non-believers and think bitcoin will burn very bright before eventually collapsing.

“It’s money!”

I take issue with the statements people usually make about bitcoin. “It’s a store of value”, “It’s digital money”, “It’s the future of money”. Right off the bat, proponents bake into the definition the terms ‘value’ and ‘money’ expecting you to just accept it as given.

Bitcoins are actually tokens whose price is allowed to float rather than being fixed. It’s price is purely determined by what people are willing to pay for them. When you try to look for the ‘value’, you end up getting trapped in an endless cycle of circular logic. It has value because people are willing to buy it off you. They want to buy it off you because it has value.

There are actually very few places where you can spend bitcoin directly without going through fiat first. You may believe this will change in the future. However, I find that people wishing for this to happen are woefully ignorant of tax code. If you trade them, you must report capital gains. If you accept them as payment, you must record the fair market value in your local currency and report it as income and pay taxes. Not doing so makes you guilty of tax evasion. No vendor is going to go through this headache. Of course, laws _could_ change. But that’s quite a risky bet.

“It’s scarce!”

“But there are only 21 million bitcoins that will ever exist!”, they say. Every time a new cryptocurrency is plugged into an exchange (Etherium, Litecoin, etc), this dilutes the overall supply of cryptocurrencies because there are only so many dollars out there to chase them. I find it really funny that the cryptocurrency junkies get so excited every time this happens.

“You can send money without a middle man!”

Nope. Once you get past “the bitcoin is not money” hurdle, you can’t. First you need to move dollars into an exchange. That can take 2-3 days depending on the method. The exchange takes their cut in the process. Then you transfer the bitcoins and the network itself takes another cut for the transfer. Then on the other end, the recipient does the inverse to get dollars again, where the network and exchange takes another cut. Sounds awesome.

Anyway, I can go on and on. FOMO is driving the price up. There are too many reasons to stay away. Especially after a 50,000% price appreciation.

#89 Doug Rowat on 09.10.17 at 11:38 am

#71 Bitcoinaire on 09.10.17 at 12:46 am

Haha, enjoy your 3% “gains” from diligent research and analysis of stocks and index funds granpa…

Actually, we target 6-7% annual returns over the long term. Now you kids get off my lawn!

–Doug

#90 Spaccone on 09.10.17 at 12:04 pm

I don’t understand bitcoin, as a person in the bookkeeping/accounting realm I struggle to make sense of it though I haven’t read any literature on it. No earnings and therefore no p/e, no audited financial statements, no predictability, too much volatility, no accountability other than a cloud ledger.

My simplest attempt at breaking it down, which is probably wrong or a degree or so away from fully reasoning why it “works”, is a scenario where two, three, or four people create a currency. We each have 5 coins. I take all my life savings and buy 1/100 of a coin for $100,000 off of my brother — hurray, we’re now all worth $50,000,000! The next step missing from this ratio is introducing a huge mass of people including money launderers and criminals to it so that the p/d ratio (price/dummy ratio) is suppressed so that more people trade it at that level and its value becomes more “real”. Maybe whoever can theorize that p/d ratio can really game bitcoin.

The bitcoin cult expounds how blockchain is the future and that’s why they’re buying bitcoin. It doesn’t make sense to me because just because you’re buying bitcoin it doesn’t mean you’re becoming an owner of blockchain or participating in any profits (other than ponzi profits).

#91 Marcus on 09.10.17 at 12:42 pm

You need to study crypto currency a lot more. It is not a tulip craze. Hardly anyone knows about crypto. It’s good that you scare them however. It shakes out the weak hands. The tech is sound.

#92 TurnerNation on 09.10.17 at 12:46 pm

Yes they have a silo for everyone of us snowflakes. Pick your prison garb. Bill will be sent. Share your fair pay.

https://timeline.com/hans-eijkelboom-photo-fashion-75ca9911518c

“This genius photo experiment shows we are all just sheeple in the consumer matrix

Images from the same exact spot for two hours at a time”

#93 jess on 09.10.17 at 12:52 pm

another kind of sucking sound

long islands bahamas —have a look

http://www.huffingtonpost.ca/entry/bahamas-water-receded-hurricane-irma_us_59b49f1de4b0dfaafcf84e86

cat bonds

#94 Lost..but not leased on 09.10.17 at 1:10 pm

Bitcoin..tulips…Bre-X etc.

It appears that the less people understand something, the more they in “Emperor’s New Clothers” fashion..follow the herd. …..not admitting their ignorance combined with feeling of missing out on something.

#95 jess on 09.10.17 at 1:44 pm

#92 TurnerNation on 09.10.17 at 12:46 pm

https://www.theatlantic.com/magazine/archive/2017/09/how-america-lost-its-mind/534231/

#96 espressobob on 09.10.17 at 2:02 pm

During the gold surge a few fund managers pumped rare earths. That’s the exotic stuff worth way more than AU. They swore it was going through the stratosphere. Backed it up with a lot of rhetoric. Yup, that worked out?

It’s a suckers play. Stupid is, what stupid does.

Commodity plays are one of the quickest ways to implode. Why be a part of that?

#97 Doghouse Dweller on 09.10.17 at 3:38 pm

#19 up ZPR
ZPR etf has hardly risen … ?? anyone ??
“““““““““““““““““““““““““““““`
ZPR

– expected capital losses due to calls,

– expected changes in dividend income when the dividends of the current holdings are reset (which, given the yield of the Canada 5-year bond, will generally be large and negative)

Holders of ZPR – and other FixedResets – over the past two years will doubtless be happy to confirm that the price volatility they have experienced far exceeds what they might have expected from an investment with a 3.11 year duration.
Secondly, I note that BMO touts the fund as being “Low to Medium Risk”, which I feel confident will be considered laughable by those who have suffered through the woes of the preferred share market for the past two years.

James Hymas

#98 espressobob on 09.10.17 at 4:10 pm

Holding rate reset ETF known as ZPR is not without risk. Averaging in over time with capital evens out the ride.

Investing is a long term approach, not a short term trade.

#99 Tulips – World Wide Ledger on 09.11.17 at 9:53 am

[…] Read the Full Story Here […]

#100 D Apostrophe on 09.11.17 at 3:27 pm

Garth, love your hair. Once in a lifetime opportunity for patient buyers coming up. Final answer.

How can you not love this blog? — Garth