New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

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Kookaburra
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by Kookaburra »

Applying the same logic re: being worthless and having negative long-term returns, and in the spirit of helping others avoid the mistake that I made, I would like to suggest that we also include references to owning Vanguard Energy Fund (VGENX) in the “greater fool” ban.
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watchnerd
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by watchnerd »

skor99 wrote: Wed May 19, 2021 12:23 pm

Matures to what ? How will Bitcoin generate any wealth except for the greater fool theory ? I am all for the underlying technology like Blockchain etc but how does Bitcoin by itself do anything except to act as an alternative currency that maybe provides some anonymity and hence the potential for nefarious uses and therefore may be banned in the future
The crypto space is not synonymous just with Bitcoin.

Bitcoin is <50% of the crypto market cap at present.

But, in any case, I could write all sorts of things speculating on how the crypto space might evolve, but it doesn't matter.

None of my hypothetical thoughts will pass the Boglehead sniff test.

If Vanguard or Fidelity ever makes a crypto fund, then maybe BH will allow the discussion.

Until then, it's a waste of neurons to debate in this community as the majority of the community, and the mods, don't want to talk about it.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
Valuethinker
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by Valuethinker »

ResearchMed wrote: Wed May 19, 2021 12:03 pm
gwe67 wrote: Wed May 19, 2021 11:38 am
ResearchMed wrote: Wed May 19, 2021 10:31 am

[*] We have no crypto, unless there is some hidden within some mutual funds or ETFs, which is a slightly disturbing thought...

RM
Surely you own Tesla in some form. As of a few weeks ago, Tesla held $2.5 billion in bitcoin (I guess it's $1.98 billion now). Many companies accept crapto as payment and would have at least a nominal stockpile. So the vast majority of index investors do indirectly have a stake in crapto at least in some small way, but we just can't talk about it in this forum (which is a good thing).
Point well taken, and thanks.

I've made an edit to my post above to reflect this.
That was a :oops: for me...

RM
having said they were a long term holder, Tesla then booked a profit on selling crypto currencies in the next quarter.

Elon Musk is adept at "pump and dump".

There will be utility companies that are making significant profits from selling electricity to crypto miners. Oil and gas and coal companies selling fuel to the utilities that generate the electricity that ...

You get the picture. It's part of world "economic activity" so it's also therefore something you have an (indirect) investment in.
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vanbogle59
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by vanbogle59 »

gwe67 wrote: Wed May 19, 2021 11:38 am Many companies accept crapto as payment
Was this the greatest typo of all time? :D

A Freudian slip? Or am I just learning an old joke?
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anon_investor
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by anon_investor »

watchnerd wrote: Wed May 19, 2021 12:33 pm
skor99 wrote: Wed May 19, 2021 12:23 pm

Matures to what ? How will Bitcoin generate any wealth except for the greater fool theory ? I am all for the underlying technology like Blockchain etc but how does Bitcoin by itself do anything except to act as an alternative currency that maybe provides some anonymity and hence the potential for nefarious uses and therefore may be banned in the future
The crypto space is not synonymous just with Bitcoin.

Bitcoin is <50% of the crypto market cap at present.

But, in any case, I could write all sorts of things speculating on how the crypto space might evolve, but it doesn't matter.

None of my hypothetical thoughts will pass the Boglehead sniff test.

If Vanguard or Fidelity ever makes a crypto fund, then maybe BH will allow the discussion.

Until then, it's a waste of neurons to debate in this community as the majority of the community, and the mods, don't want to talk about it.
BTC ETF applications are pending with the SEC, so we shall see.
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willthrill81
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by willthrill81 »

wootwoot wrote: Wed May 19, 2021 12:31 pm
skor99 wrote: Wed May 19, 2021 12:23 pm
watchnerd wrote: Wed May 19, 2021 12:15 pm
wootwoot wrote: Wed May 19, 2021 12:02 pm This policy feel like a "bury our head in the sand" type of move. While crypto has been erratic that will change over time. There's a real lack of understanding across the forum regarding what crypto is and what it isn't.
It's an incredibly conservative move but this is an incredibly (financially) conservative forum.

I've been here 14 years and remember when ETFs were considered a bit sketchy and Bogle himself was skeptical.

But ETFs have matured and become mainstream.

Perhaps 5-10 years from now, if the crypto space matures, it will be allowed to be discussed here.
Matures to what ? How will Bitcoin generate any wealth except for the greater fool theory ? I am all for the underlying technology like Blockchain etc but how does Bitcoin by itself do anything except to act as an alternative currency that maybe provides some anonymity and hence the potential for nefarious uses and therefore may be banned in the future
Do you consider investing in gold the greater fool theory? Gold doesn't generate wealth and private ownership was outlawed at one time https://en.wikipedia.org/wiki/Executive_Order_6102. Should threads concerning precious metal investing be banned as well?
I posed a very similar question upthread. No response.

Should discussions of cash allocations be banned?

Should the forum be turned into an echo chamber?
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Kalzarak
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by Kalzarak »

I am a frequent reader and I am in full agreement and support the new policy, too many assumptions that crypto is ok, thank you.
Last edited by Kalzarak on Wed May 19, 2021 12:37 pm, edited 1 time in total.
MarkBarb
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by MarkBarb »

I'm OK with it. I would hate for this to become just another financial forum. I like the focus on Bogle inspired investing. That is a difficult balance.

As somebody said upthread, I wouldn't want this to be nothing more than an echo chamber. On the other hand, I don't want to have to wade through a bunch of threads about day-trading, technical charts, crypto speculation, and the like. If someone started a thread about beanie babies, I wouldn't care. If there were dozens of beanie baby threads, I'd get annoyed. Crypto has definitely gotten to the annoying point. I don't care whether it is banned or pushed into a single thread.

I'm not sure I would ban NFT discussions. NFT like blockchain is a useful concept that is being used for what is effectively gambling right now. At some point, I expect it to be used as a way to establish ownership on productive assets. I'm glad I'm not a moderator.

I'm grateful for the moderators and the work they do. They've done a good job with a difficult balance.
UpperNwGuy
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by UpperNwGuy »

Glad to see this new policy. Sorry to see several members poking and prodding it at it from various angles.
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by Elric »

anon_investor wrote: Wed May 19, 2021 12:34 pm BTC ETF applications are pending with the SEC, so we shall see.
Imagine if a low expense ratio, cryptocurrency index fund emerges! :D
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grok87
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by grok87 »

Kalzarak wrote: Wed May 19, 2021 12:37 pm I am a frequent reader and I am in full agreement and support the new policy, too many assumptions that crypto is ok, thank you.
agree
RIP Mr. Bogle.
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watchnerd
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by watchnerd »

Wanderingwheelz wrote: Wed May 19, 2021 12:30 pm I recall your post about selling 10% of your equities because of the elevated Schiller CAPE awhile back and then when we returned from a month long RV trip last week I saw you picked up two cryptocurrencies during the time we were w/o internet in the mountains. Being roughly the same age and in a similar position in life it’s made for a least a bit of contemplation on my part. Thanks for your candor!

I’m rooting for your crypto to do a 180.
That 10% equity reduction contributed to creating our LMP bond ladder.

No regrets -- our cost of living is now pre-funded to the year 2037.

Interestingly, the 2% crypto allocation (well, 1.5% now) has a risk parity volatility of about 1:7 when compared to VT.

So even though we cut equities by 10%, the 2% crypto acts like 12-14% equities in terms of portfolio gyrations.
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gwe67
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by gwe67 »

vanbogle59 wrote: Wed May 19, 2021 12:34 pm
gwe67 wrote: Wed May 19, 2021 11:38 am Many companies accept crapto as payment
Was this the greatest typo of all time? :D

A Freudian slip? Or am I just learning an old joke?
I'm sure I didn't coin the term, but I don't mind using it...surprised nobody noticed earlier.
VTI 48%, VXUS 12%, BND 40%
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CalPoppy
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by CalPoppy »

To those that are doing the work to set policies, moderate the discussions, and the likely 100+ other tasks it takes to run this forum and its associated events and activities:

THANK YOU!
txhill
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by txhill »

Valuethinker wrote: Wed May 19, 2021 12:27 pm
Elric wrote: Wed May 19, 2021 12:24 pm
secondopinion wrote: Wed May 19, 2021 12:16 pm A real estate/stock/bond bubble is often far milder than what was seen with tulips. With the former, all three can generate earnings as to the investor (whether it is realized or not).
This is not my area of expertise, but my understanding is that one can currently lend out ether and earn a return in that manner. Is that not correct?
But there was never any clear explanation as to how that particularly money making machine worked?

Lend out to whom? And why would they pay you 10% pa for that privilege?
This is the kind of discussion that makes me think the forum would benefit from continuing to have at least one thread on crypto, because there are different types of crypto assets, some of which are yield-generating, and there are some crypto assets that are purely speculative.

I gave an example for AAVE earlier. Owning AAVE tokens gives you governance over the protocol, just as you get voting rights as a shareholder. AAVE itself generates revenue by serving as a lending protocol (people can borrow and lend USD on the platform). If you stake your AAVE (i.e., use your AAVE to validate transactions) then you earn a portion of the revenue generated by the platform. It's really just like a bank, except it reduces costs by eliminating the need for brick and mortar / personnel.

Ethereum is another example, if the transition to ETH 2.0 goes as planned. Ethereum is kind of like the App Store, or AWS--it is a network that people can run applications on--the most popular applications are decentralized finance apps like AAVE but also include some gaming apps and also NFTs. The network charges a fee to run applications (called a "gas" fee), and after ETH 2.0 the revenue generated by those fees passes to those who hold ETH 2.0--that is direct income to ETH 2.0 holders. It's like owning a tollbooth on a highway.

The majority of cryptocurrencies, however, are like Bitcoin or Dogecoin--they are not programmable and do not generate yield (although they can be lended for a return like a bond). Those are speculative. But they are not the whole story when it comes to crypto assets.
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anon_investor
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by anon_investor »

willthrill81 wrote: Wed May 19, 2021 12:35 pm
wootwoot wrote: Wed May 19, 2021 12:31 pm
skor99 wrote: Wed May 19, 2021 12:23 pm
watchnerd wrote: Wed May 19, 2021 12:15 pm
wootwoot wrote: Wed May 19, 2021 12:02 pm This policy feel like a "bury our head in the sand" type of move. While crypto has been erratic that will change over time. There's a real lack of understanding across the forum regarding what crypto is and what it isn't.
It's an incredibly conservative move but this is an incredibly (financially) conservative forum.

I've been here 14 years and remember when ETFs were considered a bit sketchy and Bogle himself was skeptical.

But ETFs have matured and become mainstream.

Perhaps 5-10 years from now, if the crypto space matures, it will be allowed to be discussed here.
Matures to what ? How will Bitcoin generate any wealth except for the greater fool theory ? I am all for the underlying technology like Blockchain etc but how does Bitcoin by itself do anything except to act as an alternative currency that maybe provides some anonymity and hence the potential for nefarious uses and therefore may be banned in the future
Do you consider investing in gold the greater fool theory? Gold doesn't generate wealth and private ownership was outlawed at one time https://en.wikipedia.org/wiki/Executive_Order_6102. Should threads concerning precious metal investing be banned as well?
I posed a very similar question upthread. No response.

Should discussions of cash allocations be banned?

Should the forum be turned into an echo chamber?
Gold has practical industrial uses which can impact prices, not just the speculative investment aspect.

You can earn interest on cash (e.g 0.5% at Ally Bank).
secondopinion
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by secondopinion »

Thesaints wrote: Wed May 19, 2021 12:24 pm
secondopinion wrote: Wed May 19, 2021 12:16 pm ... As far as gold, it has an history value that is thousands of years old.
Yes, but that long history ended on August 15th, 1971.
Did it truly end? People still value it just as much as before despite it no longer being a currency. It is a commodity now.
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
RJC
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by RJC »

gwe67 wrote: Wed May 19, 2021 12:41 pm
vanbogle59 wrote: Wed May 19, 2021 12:34 pm
gwe67 wrote: Wed May 19, 2021 11:38 am Many companies accept crapto as payment
Was this the greatest typo of all time? :D

A Freudian slip? Or am I just learning an old joke?
I'm sure I didn't coin the term, but I don't mind using it...surprised nobody noticed earlier.
I thought you were just trying to avoid the word after the ban :wink:
Tanelorn
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by Tanelorn »

Alex Frakt wrote: Wed May 19, 2021 1:46 am The forum has adopted a new Forum Policy which can be found at Unacceptable Topics - Greater Fool Investing Strategies

I'll quote it here. Note that the exact wording may change as we receive further feedback, but the basic message will not.
Greater Fool Investing Strategies

Eventually, one runs out of greater fools. - Burton Malkiel

Discussions of investment strategies based on securities or physical assets that have no underlying value or negative expected long term returns are prohibited. Examples include: cryptocurrencies; lottery tickets; tulip bulbs; Ponzi, pyramid, and multi-level marketing schemes; affinity frauds; and market manipulation schemes.
I always thought non-dividend paying stocks were a Ponzi scheme since, like crypto currencies, they produce no cashflow often because the underlying business is unprofitable. Sure they have value, like crypto, in that you can sell them in the market for what some fool will pay, but do they have a fundamental value? You can speculate that there will be future cashflows or a buyout by some institutional greater fool, but that’s not really different than hoping you’ll be able to stake your crypto for lending yield or that future applications may use Etherium in ways that make it more valuable eventually.
Last edited by Tanelorn on Wed May 19, 2021 12:45 pm, edited 1 time in total.
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vanbogle59
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by vanbogle59 »

watchnerd wrote: Wed May 19, 2021 12:40 pm Interestingly, the 2% crypto allocation (well, 1.5% now) has a risk parity volatility of about 1:7 when compared to VT.

So even though we cut equities by 10%, the 2% crypto acts like 12-14% equities in terms of portfolio gyrations.
Do you need to update those volatility numbers after the last 24 hours? :D
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Alex Frakt
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by Alex Frakt »

We are locking this thread since it is turning into another debate on the merits of crypto.

Thank you for your feedback. The discussion will be ongoing in the Advisory Board and Moderators forums. It will obviously take a little while to figure out issues such as people discussing existing crypto holding in the context of their overall portfolio or someday perhaps regulated crypto-based products. Please bear with as we work through this.
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Re: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies

Post by Alex Frakt »

10/19/21 Update: What about BITO, the new futures ETF?

This still falls under our prohibition. Our ban on crypto discussions is ultimately based on cryptocurrencies' lack of intrinsic value. While the ETF structure greatly reduces non-market risks, purchasing it is still a purely speculative gamble, not an investment.
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