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Hitting 1 Million - Stocks & Crypto [formerly Long Road to Millionaire Topic]

Honest reporting on shorter-term trading activity and ideas
RossP
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Re: The Long Road To ISA Millionaires

#97730

Postby RossP » November 22nd, 2017, 8:41 am

A little update.

I felt emboldened by some of the comments here and decided not to sell 500 euros worth, but instead agreed a strategy with my other half (we share all finances) that if the Bitcoin price ever reached double my initial investment amount, I would take out my original stake and have the freedom to 'play' with the rest (either let it run or try to sell high , buy low on the swings).

She was happy with this approach as she got on board with the notion that having taken the original investment out, we wouldn't really lose anything regardless of what happened with the rest.

Well a few weeks ago, just before the Bitcoin2x split failed to materialise, it reached that doubling in price. Although tempted to let it ride I stuck by our agreement and sold half. Soon after the price crashed and I felt pretty smug, but now it has recovered and gone a fair bit higher.

It's going to be an interesting ride and I reckon I'll learn a lot about my tolerance for risk along the way, but having taken that original investment out, I do feel less like I am 'gambling' with my wife and mine savings!

As a side note, my Etherium tracked Bitcoin movements pretty closely for the first few months since I bought it but then stayed pretty much steady when Bitcoin starting to shoot up. I plan to follow the same strategy of selling half if it ever doubles in value.

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Re: The Long Road To ISA Millionaires

#97995

Postby BobbyD » November 22nd, 2017, 11:36 pm

RossP wrote:She was happy with this approach as she got on board with the notion that having taken the original investment out, we wouldn't really lose anything regardless of what happened with the rest.


http://uk.businessinsider.com/richard-t ... sts-2015-3

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Re: The Long Road To ISA Millionaires

#98044

Postby will89 » November 23rd, 2017, 9:13 am

ETH just broke out of a huge bull pennant that has been forming since May. $600 is on the way :)

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Re: The Long Road To ISA Millionaires

#98066

Postby GoSeigen » November 23rd, 2017, 9:58 am

will89 wrote:ETH just broke out of a huge bull pennant that has been forming since May. $600 is on the way :)


Genius, congratulations! Where are you going to retire to?

GS

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Re: The Long Road To ISA Millionaires

#98198

Postby will89 » November 23rd, 2017, 3:57 pm

GoSeigen wrote:
will89 wrote:ETH just broke out of a huge bull pennant that has been forming since May. $600 is on the way :)


Genius, congratulations! Where are you going to retire to?

GS


A country free of sarcasm :(


As a bit of a tech update. Vlad Zamfir and Vitalik have been working on their separate iterations of PoS for ETH. The plan is for Casper, the PoS protocol, to launch on testnet shortly, and then ETH will move to a hybrid PoS/PoW system, where initially a small amount such as 1 in 100 blocks is validated via PoS. The minimum to stake at this stage will be very high, but over time it will be reduced and eventually the whole network will function on PoS.

If that was all mumbo-jumbo: ETH going to remove mining soon, you just stake your ETH instead and receive regular returns. That's my plan.
Last edited by will89 on November 23rd, 2017, 4:06 pm, edited 2 times in total.

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Re: The Long Road To ISA Millionaires

#98203

Postby GoSeigen » November 23rd, 2017, 4:06 pm

will89 wrote:
GoSeigen wrote:
will89 wrote:ETH just broke out of a huge bull pennant that has been forming since May. $600 is on the way :)


Genius, congratulations! Where are you going to retire to?

GS


A country free of sarcasm :(



I might have been less sarcastic if you'd written: "Very bullish on ETH for technical reasons so have bought x shares."; then in three months' time returned and said "I am retiring to [country with beach and no sarcasm] having sold my ETH when it reached 600."


This is after all the "Trading my way to a million" board, which is about actual trading to grow £3000 into a million, rather than a place merely for ramping (however innocently) pyramid schemes.


GS

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Re: The Long Road To ISA Millionaires

#98207

Postby will89 » November 23rd, 2017, 4:09 pm

GoSeigen wrote:I might have been less sarcastic if you'd written: "Very bullish on ETH for technical reasons so have bought x shares."; then in three months' time returned and said "I am retiring to [country with beach and no sarcasm] having sold my ETH when it reached 600."


This is after all the "Trading my way to a million" board, which is about actual trading to grow £3000 into a million, rather than a place merely for ramping (however innocently) pyramid schemes.


GS




Ok, point taken, although if you read back through the thread I've made it pretty clear at various points that I've bought and am planning to hold long term. I've then provided what is hopefully some balanced and useful info, and not just an unwarranted ramp, clearly explaining the risks along the way. Between last October and this March we invested a significant (for us) sum, so I'm not taking these decisions lightly. This has now obviously grown into a life-changing amount.

Also, it's definitely not a pyramid scheme... Yes, there are certainly pyramid schemes within the crypto sphere, as there are within the stock market... It's pretty easy to avoid them though!

In case anyone finds it interesting, I've had my Crypto portfolio unitised from the start. I have been slowly withdrawing profits all year, being mindful of tax implications, so I thought it sensible to unitise to get a full picture of performance vs the market. Unit value when I began late last year was set at 10. Unit value now is 349. Yes I know it's volatile, that's the point! Planning to hold for at least 5 years.

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Re: The Long Road To ISA Millionaires

#98217

Postby will89 » November 23rd, 2017, 4:29 pm

Also, if a mod could change the title of this thread it may be helpful for people. It's not really just about our ISAs any more!

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Re: The Long Road To ISA Millionaires

#98261

Postby GoSeigen » November 23rd, 2017, 6:12 pm

will89 wrote:
GoSeigen wrote:I might have been less sarcastic if you'd written: "Very bullish on ETH for technical reasons so have bought x shares."; then in three months' time returned and said "I am retiring to [country with beach and no sarcasm] having sold my ETH when it reached 600."


This is after all the "Trading my way to a million" board, which is about actual trading to grow £3000 into a million, rather than a place merely for ramping (however innocently) pyramid schemes.


GS




Ok, point taken, although if you read back through the thread I've made it pretty clear at various points that I've bought and am planning to hold long term. I've then provided what is hopefully some balanced and useful info, and not just an unwarranted ramp, clearly explaining the risks along the way. Between last October and this March we invested a significant (for us) sum, so I'm not taking these decisions lightly. This has now obviously grown into a life-changing amount.


Fair enough, didn't look back at those initially; do note that some bulletin boards (e.g. LSE) are full of the "Bullish. Woohoo, this one's going to 600!!!" type post, but those are really frowned upon here.

Also, it's definitely not a pyramid scheme...


Okay,

A. Would you be kind enough to draw a vague line between cryptocoin areas you consider pyramid scheme and not pyramid scheme?


B. Assuming you believe BTC or ETH not to be pyramid schemes would you humour me by outlining:

1. What the nature of the bitcoin (or ETH as you prefer) asset is? Negotiable instrument? Loan? Equity?
2. Whose liability is it? Or who is the issuer?
3. What and where is the governing contract, or articles of association or similar?
4. Briefly, as a holder what protection are you afforded under the law?
5. Similarly, as a purchaser what protection are you afforded under the law?
6. What underlying asset, process, business or other source of wealth is the asset linked to?
7. If the entire holder base wished to sell simultaneously (cf a takeover), approximately how would the purchaser assess the value to be paid in consideration for receipt of the coins?
8. What are the key risks to the value of this asset? What are the key sources of upside from current pricing?

Others please weigh in if I've missed something vital.

GS
P.S. To test the fairness of the above questions I just answered them in 2 minutes to my wife about one of the riskiest of our investments...

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Re: The Long Road To ISA Millionaires

#99145

Postby will89 » November 27th, 2017, 9:45 am

GoSeigen wrote:
Okay,

A. Would you be kind enough to draw a vague line between cryptocoin areas you consider pyramid scheme and not pyramid scheme?


B. Assuming you believe BTC or ETH not to be pyramid schemes would you humour me by outlining:

1. What the nature of the bitcoin (or ETH as you prefer) asset is? Negotiable instrument? Loan? Equity?
2. Whose liability is it? Or who is the issuer?
3. What and where is the governing contract, or articles of association or similar?
4. Briefly, as a holder what protection are you afforded under the law?
5. Similarly, as a purchaser what protection are you afforded under the law?
6. What underlying asset, process, business or other source of wealth is the asset linked to?
7. If the entire holder base wished to sell simultaneously (cf a takeover), approximately how would the purchaser assess the value to be paid in consideration for receipt of the coins?
8. What are the key risks to the value of this asset? What are the key sources of upside from current pricing?

Others please weigh in if I've missed something vital.

GS
P.S. To test the fairness of the above questions I just answered them in 2 minutes to my wife about one of the riskiest of our investments...



A. Sure, but you have to understand that cryptocurrency is a huge ecosystem. That's like saying 'the internet is a pyramid scheme'. Yes, there may be some pyramid schemes on the internet, but it's so much more than that. There are huge differences between cryptos. Some, with Bitcoin being the classic example, are designed to be stores of value or a replacement for cash. Some, like Ethereum, are designed not to focus on value, but instead on transactions, what in Ethereum are called 'smart contracts'. Some others focus on privacy etc, the list goes on. There is a coin called BitShares, which I think is a ponzi, if that helps.

B.
1. Answered above to some extent. The best way to think about Ethereum to my mind is like oil that fuels a transactional network (Bitcoin is more akin to a gold replacement). When you make a money wire you may pay Western Union etc, with cryptocurrency a small amount of the coin, in this case Ethereum, is required to validate the transaction, there is no central entity involved in the transaction at all.

2,3,4,5,6,7. These all have a similar answer. You need to change your mindset from one that assumes a centralised system is required. The whole point of blockchain and cryptocurrency is decentralisation. As a brief bit of background, cryptocurrencies are build on a blockchain, which means that all transactions on the network are visible to the whole network. There is no counterfeiting possible, and the options for fraud are largely removed, because the whole network can see who has possession of coins, and a transfer of value only requires a sender and receiver, the transaction then being validated by the network and held on the blockchain forever. Different coins have different ways of validating transactions, Proof of Work, Proof of Stake etc, which I have gone into more detail about in other posts. There is no legal protection, there is no liability, that's the whole point. The laws and rules are coded into the blockchain, it's totally immutable.

8. It's new tech, could completely fail, risky investment etc etc. Different coins have different attributes so this question needs to be answered either as 'the whole crypto space' or 'ETH', 'BTC' etc. If your opinion is that crypto and blockchain in general are at the start of an adoption curve similar to other technological breakthroughs of the past, then the medium-long term upside is obvious. For specific projects/coins it's more nuanced. For ETH specifically I'm very bullish long term because I feel that it has the backing of a huge number of developers, and is being moved forward at a pace that is completely different to any other project. Please keep in mind that I'm not just invested in ETH, i'm also in some much earlier stage projects too. One of the key things with tech like this is that you need to be looking at price on a log scale, not linear, it gives a much better viewpoint from a TA point of view because of the nature of the beast and speed of adoption, Gartner hype cycles etc.

Hope that helps, happy to provide some more info if requested. I think the crypto market at the moment is overpriced, I expect BTC to correct back to around $7k at least, probably lower, but value will show itself in the end. Hundreds of projects will fail but the good ones should do well.

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Re: The Long Road To ISA Millionaires

#99208

Postby will89 » November 27th, 2017, 12:20 pm

As a quick aside from Crypto discussions, some changes to our ISA strategy:

I have become increasingly disillusioned with an HYP strategy over the last year or so. Yes, I enjoy picking individual stocks, and mixed a traditional HYP approach with some small cap dabblings for a long time, but I've decided that it's just not a sensible spread of risk to have most of my capital tied up in a small number of individual stocks. I also wanted more global exposure, so have moved to a portfolio of investment trusts instead. I feel this strategy fits better with our overall investment approach and risk profile, which includes some property, crypto, cash etc.

As crypto has taken more of an active role in our overall investment strategy (at the risky end), I've become slightly more risk averse in other areas, one of them being our ISAs, so this was the result. Our HYP had still outperformed FTSE All-Share TR in each quarter of the year so it wasn't an easy decision, but I think a good one for the long term.

We've ended up with this, comments very welcome:

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Re: The Long Road To ISA Millionaires

#99264

Postby GoSeigen » November 27th, 2017, 3:41 pm

will89 wrote:

A. Sure, but you have to understand that cryptocurrency is a huge ecosystem. That's like saying 'the internet is a pyramid scheme'. Yes, there may be some pyramid schemes on the internet, but it's so much more than that. There are huge differences between cryptos. Some, with Bitcoin being the classic example, are designed to be stores of value or a replacement for cash. Some, like Ethereum, are designed not to focus on value, but instead on transactions, what in Ethereum are called 'smart contracts'. Some others focus on privacy etc, the list goes on. There is a coin called BitShares, which I think is a ponzi, if that helps.

Okay, Bitcoin not a ponzi, BitShares yes. But what distinguishes them?



B.
1. Answered above to some extent. [...]

2,3,4,5,6,7. These all have a similar answer. [...]

I don't think you really answered any of those questions, so will have a go myself. Please correct any you think are wrong!

GoSeigen wrote:B. Assuming you believe BTC or ETH not to be pyramid schemes would you humour me by outlining:

1. What the nature of the bitcoin (or ETH as you prefer) asset is? Negotiable instrument? Loan? Equity?
Cryptocoins are not a security. They are more like a gift. When in the UK you acquire a cryptocoin in a transaction you gift the "seller" your sterling money and (s)he gifts you their cryptocoin. The cryptocoin is then just a collection of numbers, nothing more. If you are lucky someone else may in turn gift you some real currency in exchange for the coin.
2. Whose liability is it? Or who is the issuer?
Nobody's. It's a gift. Once you have the little numbers no one on earth owes you anything. Therefore it is your property with neither encumberance or rights, much like a sweet wrapper when you've eaten the sweetie. It is not recognised by any goverment nor is their any guarantor of its value. It carries no payment rights and is linked to no business or underlying asset.
3. What and where is the governing contract, or articles of association or similar?
There is none. You just have some numbers saved on a disk. You may have a service contract with a "wallet" provider but that will be in respect of safekeeping services, and NOT the actual value of the asset.
4. Briefly, as a holder what protection are you afforded under the law?
None. Or rather only the limited rights of possession enjoyed when you hold any comparable chattel.
5. Similarly, as a purchaser what protection are you afforded under the law?
None? I doubt these would be even be considered a consumer good. They are not protected by financial regulators in any jurisdiction I know of.
6. What underlying asset, process, business or other source of wealth is the asset linked to?
None, except for use as payment with a limited number of private businesses at the absolute discretion of those businesses.
7. If the entire holder base wished to sell simultaneously (cf a takeover), approximately how would the purchaser assess the value to be paid in consideration for receipt of the coins?
IMO their value would be little more than the cost of recreating the technology which implements them plus, possibly, aggregate mining cost and cost of purchasing access to any useful infrastructure. i.e. I can't think of anyone who'd value a full acquisition of e.g. outstanding bitcoins at more than pennies in the pound.

This means if a significant part of the holder base ever wishes to liquidate their holding and buying interest has dried up, the price will collapse virtually overnight, IMO.


will89 wrote:
GoSeigen wrote:8. What are the key risks to the value of this asset? What are the key sources of upside from current pricing?


8. It's new tech, could completely fail, risky investment etc etc. Different coins have different attributes so this question needs to be answered either as 'the whole crypto space' or 'ETH', 'BTC' etc. If your opinion is that crypto and blockchain in general are at the start of an adoption curve similar to other technological breakthroughs of the past, then the medium-long term upside is obvious. For specific projects/coins it's more nuanced. For ETH specifically I'm very bullish long term because I feel that it has the backing of a huge number of developers, and is being moved forward at a pace that is completely different to any other project. Please keep in mind that I'm not just invested in ETH, i'm also in some much earlier stage projects too. One of the key things with tech like this is that you need to be looking at price on a log scale, not linear, it gives a much better viewpoint from a TA point of view because of the nature of the beast and speed of adoption, Gartner hype cycles etc.


The main risk is not that it's new tech or anything like that. It's that the coins themselves have no value. It's possible one or two varieties of cryptocoin may have some residual value but there is no telling in advance which ones those will be of the many dozens you could "invest" in.


IMO my answers above look no different to the ones that would be given about any other pyramid scheme. There were some fairly elaborate ones in the mid 2000s involving property IIRC and the authors of those were locked up. I don't know who will be locke up this time, but it's going to be interesting to watch.

In the meantime, I'm looking at some beautiful pieces of iconic 1960s photography on sale. They are unique and only cost about 2 bitcoins today, whereas they were on sale for some 60 bitcons just a year or two ago.

Would rather have a gorgeous historical piece of art than a couple of bitcoins, me!

GS

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Re:Hitting 1 Million - Stocks & Crypto

#99276

Postby will89 » November 27th, 2017, 4:14 pm

GoSeigen wrote:IMO my answers above look no different to the ones that would be given about any other pyramid scheme.


Indeed, but I could call plenty of things pyramid schemes if I only had a very limited understanding of them... It just comes back to your interpretation of what you believe grants an asset 'value'. It's very debatable whether or not cryptocurrencies are even assets at all. I would argue, just as you have, that they are a completely new class, I just wouldn't call them 'gifts' :)

This isn't intended to be rude at all, but some of your answers and references to wallets etc just show a lack of understanding of the technology. I wouldn't be able to form an informed opinion on Peruvian 10 year gilts, because I don't know enough about them.

(If I reference Bitcoin below, it's just because it's a commonly recognised example).

It would be interesting if you complete the same exercise again outlining what gives gold its value. Scarcity? Stability? Colour? It's very easy to provide answers that are loaded toward your own opinion, but almost impossible to remain completely objective.

Likewise with your art example, I'll argue that fine art is a pyramid scheme:
It's a terrible payment instrument and currency, it's not divisible or portable.
It's easy to forge, difficult to store, but, similar to Bitcoin, it is highly sought after, with a fixed supply.
It's fully catalogued and recorded, just like Bitcoin.
A Picasso is recognised all over the world, just like Bitcoin.
Independent entities all over the world track and monitor its value, just like Bitcoin.

Just like art or gold, the price of Cryptocurrency is driven simply by supply and demand, so it is nothing like a pyramid scheme. BTC/USD or BTC/GBP is completely determined by the market. A pyramid scheme is designed to collapse when there isn't enough new money coming in at the end, but if you understood the decentralised nature of Bitcoin et al, you would realise that there is no authority who could collapse it all if they wanted to.

It's too offtopic, but I could just as easily rattle off reasons why Fiat currency is a pyramid scheme. Something about them printing more money when they want to?...

It just feels like your defensive approach is to yell 'PYRAMID' when actually it's just a lack of understanding, and perhaps some further reading would be worthwhile. The fact that so many asset classes or securities could also be called Pyramid Schemes if analysed from a certain, loaded angle just shows that maybe we should all try to be a bit more open-minded! It's very useful to debate it though, it's a really good exercise to remind myself why I invested ;)

Please keep in mind not to confuse 'Bitcoin', 'Ethereum' or any other with 'Blockchain', 'Cryptocurrency' etc more generally. It's like assuming Amazon and 'The Internet' are the same thing.

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Re: Hitting 1 Million - Stocks & Crypto [formerly Long Road to Millionaire Topic]

#99388

Postby GoSeigen » November 27th, 2017, 10:23 pm

It just feels like your defensive approach is to yell 'PYRAMID' when actually it's just a lack of understanding


Well, I did invite you to answer the questions first! As my answers betray my ignorance (which I freely admit to), then do feel free to correct them!

Now I shall carry out the same exercise in respect of Sterling, a fiat currency you proposed was analogous. (Gold in many respects is like cryptocoins. Crucially though, it cannot at present be synthesised in any great quantities -- unlike cryptocoins, of which there are already dozens if not hundreds of varieties.)

So, for sterling fiat money:

1. What is the nature of the asset? Negotiable instrument? Loan? Equity?
-Money is an IOU of the Bank of England and authorised commercial Banks in a form suitable for payment for goods and services, exchange, storage and carriage. It is legal tender for all debts in the UK which means any creditor is compelled to accept it in payment of debts.

2. Whose liability is it? Or who is the issuer?
-Central bank balances are a liability of the Bank of England, but perpetual so cannot be put. Remaining money is an unsecured liability of commercial banks. The goverment is guarantor for the debts of the Bank of England, and guarantees up to £85,000 per individual of money deposited with each commercial bank.

3. What and where is the governing contract, or articles of association or similar?
-The BoE is incorporated by an Act of Parliament and under direct political direction of the government of the UK. The private banks have their own articles of association and are compelled to publish extensive accounts by law. They are subjected to peroidic stress tests by the Bank of England and compelled by their licence to comply with all requirements of the Regulator.

4. Briefly, as a holder what protection are you afforded under the law?
-Authorised issuing banks are subject to UK Company law as well as Banking Laws, supervision by regulators and numerous other consumer laws. The Bank of England is subject to poitical control and its charter which require it to maintain stability in the value of sterling.

5. Similarly, as a purchaser what protection are you afforded under the law?
-Off the top of my head when receiving money as payment there are various laws prohibiting counterfeiting, fraud, etc. If received by a banking institution your money is protected by numerous Banking laws and regulations.

6. What underlying asset, process, business or other source of wealth is the asset linked to?
-Sterling money is backed by the productivity of the United Kingdom, its people and capital goods. The UK is a highly stable economy, the fifth largest in the world; it has never defaulted on a debt (since incorporation of the BoE anyway).

7. If the entire holder base wished to sell simultaneously (cf a takeover), approximately how would the purchaser assess the value to be paid in consideration for receipt of all Sterling money?
-Hmmm, unlikely to happen short of war with Russia!!

8. What are the key risks to the value of this asset? What are the key sources of upside from current pricing?
-As will89 pointed out, inflation is a risk. However the UK has seldom suffered more than 15% annual inflation [whereas it is not unusual for bitcoin "currency" to fall 50% in months or weeks]; sterling has been valued between $1 and $2 for decades. Other risks are invasion, economic catastrophe, catastrophic failure of banks -- which happened in 2008 but no depositor suffered any loss in a UK bank. Upside is limited, but positive real interest rates prevail most of the time.


Okay, there's my attempt with sterling "fiat money" and as you will see, it could harldy be more different to crypto coins. There are extremely clear and powerful reasons why the value of sterling does not appreciate and collapse every few months like so-called crypto-currencies!


GS
Last edited by GoSeigen on November 27th, 2017, 10:33 pm, edited 2 times in total.

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Re: Re:Hitting 1 Million - Stocks & Crypto

#99391

Postby GoSeigen » November 27th, 2017, 10:32 pm

will89 wrote:Indeed, but I could call plenty of things pyramid schemes if I only had a very limited understanding of them... It just comes back to your interpretation of what you believe grants an asset 'value'. It's very debatable whether or not cryptocurrencies are even assets at all. I would argue, just as you have, that they are a completely new class, I just wouldn't call them 'gifts' :)

This isn't intended to be rude at all, but some of your answers and references to wallets etc just show a lack of understanding of the technology.
[...]
It just feels like your defensive approach is to yell 'PYRAMID' when actually it's just a lack of understanding, and perhaps some further reading would be worthwhile.
[...]

Please keep in mind not to confuse 'Bitcoin', 'Ethereum' or any other with 'Blockchain', 'Cryptocurrency' etc more generally. It's like assuming Amazon and 'The Internet' are the same thing.


You've formed a strong opinion of my ignorance of this subject, which I will certainly not dispute!

But it would be really helpful for you to quote where I've got something wrong and correct it, both for me and for other readers [as opposed to repeating my ingnorance and that it definitely is not a pyramid scheme!]

And you didn't andswer about how to distinguish between kosher investments like etherium and ponzi schemes like BitShares as identified by you.

Thanks.

GS

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Re: Re:Hitting 1 Million - Stocks & Crypto

#99394

Postby GoSeigen » November 27th, 2017, 10:45 pm

will89 wrote:Likewise with your art example, I'll argue that fine art is a pyramid scheme:
It's a terrible payment instrument and currency, it's not divisible or portable.
It's easy to forge, difficult to store, but, similar to Bitcoin, it is highly sought after, with a fixed supply.
It's fully catalogued and recorded, just like Bitcoin.
A Picasso is recognised all over the world, just like Bitcoin.
Independent entities all over the world track and monitor its value, just like Bitcoin.


Sorry, didn't make it clear. I certainly was not defending or advancing fine art as an investment, merely something nice I want to spend my money on, and noting how cheap it has got in bitcoins!

I agree with most of the above. Very questionable investment, especially at $450m for an old master, but maybe worth it to just look at when you get in from work!

GS

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Re: Re:Hitting 1 Million - Stocks & Crypto

#99459

Postby will89 » November 28th, 2017, 9:25 am

GoSeigen wrote:
You've formed a strong opinion of my ignorance of this subject, which I will certainly not dispute!

But it would be really helpful for you to quote where I've got something wrong and correct it, both for me and for other readers [as opposed to repeating my ingnorance and that it definitely is not a pyramid scheme!]

And you didn't andswer about how to distinguish between kosher investments like etherium and ponzi schemes like BitShares as identified by you.

GS


Apologies, wasn't intended to be as strongly worded as perhaps it came across!

I think your question about how to distinguish between 'good eggs' and 'bad eggs' is essentially the same as any other investment, do your own research. With crypto it's actually very easy for me to know what I don't want to invest in, but my appetite is probably different to many others. There's been a huge boom in 'ICOs' this year, with companies raising funds for their projects based on little more than a whitepaper and roadmap, with no evidence of a solid team or any work. I would only be looking to invest in projects where the team has a track record of success in a similar field, they have their own capital at risk, they have a working product, and they have a clear USP.

From a coding perspective, most teams developing a product will now use Github to share their work on a very open source basis, as many will be working remotely. It's very easy to check whether projects are making updates to their code every day, with a variety of team members clearly contributing to progress. Equally, it's pretty easy to find projects that promise the earth, but their Github, beta, roadmap etc hasn't been updated in 6 months.

The mainstream media is certainly at fault for skewing views on the current environment. They're either yelling 'bubble' or 'the next Google' all the time. I've seen reputable media use quotes from 18 months ago to back up a story, which is just stupid in an environment that moves so quickly. Sure, at some point there will be a crash in price, I'm certain of it, but you have to compare the dotcom bubble of something like $6 Trillion in 2000, with Cryptocurrency of $300 Billion in 2017, and maybe form the conclusion that we're either not there yet, and/or even if it is a bubble, there will be good eggs that weather the storm successfully. I'm in it for the long run, so my task is finding those good eggs, not making a quick buck. Just like my stock portfolio, I've got a spread of risk within my crypto portfolio, some much earlier stage projects at the risky end, and some big stalwarts at the safer (but still risky!) end. It's open to debate, but in my view there's no way that something like Ethereum at the top end of the market cap scale could just disappear tomorrow, there are so many thousands of developers and corporations building on the platform, that it just wouldn't happen. By its nature, it's very different to saying that a company might go under, it's more akin to the collapse of 'The Internet', 'BACS', or 'Phone Lines'.

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Re: Hitting 1 Million - Stocks & Crypto [formerly Long Road to Millionaire Topic]

#103884

Postby will89 » December 13th, 2017, 12:04 pm

A small update again, no changes on the ISA front, ITs all holding up well. Continuing to fill allowances where possible.

Crypto has been very exciting, but nerve-wracking. BTC seems to be consolidating near the top of its recent run, and the excitement has moved on to other coins like Litecoin and Ether. Discussions on this forum have been very useful in helping reinforce my own personal views on the long term prospects.

My crypto portfolio has for a while now been about 80% Ether, 20% others, so the recent price growth has been a nice boost. I looked back recently at some of my buys from Christmas last year, when the price was $7, and was sat watching yesterday as it crossed $700 within a year.

I know the portfolio value is only a paper value, but its interesting nonetheless. I am still content with holding for the long term, knowing that good projects will have their value reflected in the end even if others fall away. I've taken enough capital off the table and reinvested into ISAs to be comfortable with letting the rest run.

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Re: Hitting 1 Million - Stocks & Crypto [formerly Long Road to Millionaire Topic]

#103943

Postby RossP » December 13th, 2017, 4:22 pm

Apologies will89 for hi-jacking your thread.

Thank you for your update. I thought I would say that with the recent ETH rise, the price has now doubled from my initial investment and I have taken out the value of my original investment with the plan to let the remain ride for the long term or until I need the funds.

I do feel I should perhaps have investment more than I did (~£2000 in ETH and ~£3000 in BTC) but that is with the benefit of hindsight!

Over the longer term I am interested by the idea of diversification over a range of crypto currencies and I wondered how you went about researching all of the others? My exposure has so far been limited to just the three available via the GDAX exchange and I am not sure where to head next to learn more. One friend has bought into Electronium and although I have missed the ICO for it, the concept of 'mining' using my mobile phone intrigues me. Any thoughts?

RossP

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Re: Hitting 1 Million - Stocks & Crypto [formerly Long Road to Millionaire Topic]

#103951

Postby will89 » December 13th, 2017, 4:55 pm

RossP wrote:Over the longer term I am interested by the idea of diversification over a range of crypto currencies and I wondered how you went about researching all of the others? My exposure has so far been limited to just the three available via the GDAX exchange and I am not sure where to head next to learn more. One friend has bought into Electronium and although I have missed the ICO for it, the concept of 'mining' using my mobile phone intrigues me. Any thoughts?


Hi Ross,

I think your situation is one of the key reasons why the 3 cryptos available on Coinbase/GDAX (BTC, ETH, LTC) have been doing so well recently. Lots of people are in the same position as yourself and those are what they are buying, there's nothing wrong with that and a 33/33/33 split, or a variation on that basis, of the 3 would I'm sure do very well. Over time I've decided that as with other investing it's often those who tinker the least that do the best.

I've spent the last 18 months engrossed in forums, Discords, reddit, twitter etc trying to learn as much about the ecosystem as I can. To be frank, I would find it completely overwhelming if it was new to me now, it was a very different beast even a year ago. It's much harder to pick out good ideas now just because of the mass of projects going on and launching. I still find it staggering to think that I was able to buy 80 ETH for £500 last December... I would estimate I probably spend 4-6 hours per day on average reading/discussing crypto.

I think if you have a good investing philosophy based on the stock market, you are already ahead of 99% of crypto 'investors'. I try to look for projects with a working product, solid team who have relevant experience, clear evidence of ongoing development and a clear future or existing revenue stream. There are definitely projects out there that fit the bill, but more that don't! Unless you want it to take a lot of time up, I would suggest that you're likely to get better long term returns by sticking to the big boys and leaving it alone. You probably won't get any 10000% rises, but you might also avoid anything going to 0. Once you buy, ignore the price movements. The whole market revolves around speculative trading, so your holding period needs to be months or years if it's a project you really believe in.

My personal hope is that we're still early on the adoption curve, and crypto has the potential to provide a passive income in the future. The single thing I'm most excited about is ETH moving to a PoS system and paying me a 'dividend', that's why I'm not selling a major amount in the short-mid term. ETH is currently 80% of my portfolio, the other 20% is a small amount of Bitcoin, and then a split of other projects I believe might do well in the future. Cryptos tend to have a 'theme'; store of value, privacy, smart contracts etc, so you could try to pick the one I think is best in each area and put a bit into it.

This is in no way advice, but my current portfolio is very roughly:
ETH - 80%
Nimiq - 11% (Mining in a browser, lightning network) I invested heavily in their ICO in the summer.
EOS - 4% ('3rd Generation' Blockchain, Smart Contracts)
BTC - 2.5%
Stratis - 1% (British Business-Focussed Chain, Good Team)
OmiseGo - 1% (Asian Payment Network)
ARK - 1% (Chain->Chain Transactions, 'Crypto Google')

Of course, there are 1000s of potential investments to pick from nowadays, so happy hunting :)

I wasn't ever going to mention it, and may well regret it, but I'll provide a bit of context about the time I have put in and the results I have had, just to show how crazy it has been. At the start of this year my total investment portfolio (stocks & crypto) was around 10% of the way to this board's largely arbitrary 'target'. On paper today, my portfolio value means that the thread is now outside the remit of the board. I think this is DEFINITELY a case of past results not being indicative of future returns!


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