Jack Bogle Says ‘Avoid Bitcoin Like the Plague’

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

Post by DCChak » Thu Dec 07, 2017 6:30 am

Nuerosphere,

JDSU was my GLW. I recall both of them trading in sync around that time.

I ended up learning a similar, costly at the time, but not so costly over the long-term, lesson.

Oddly enough, my law school classmate ended up becoming general counsel of JDSU just before it changed into Viavi in the late 2010s. On paper, he benefited from a second, much smaller, bump, though I remember him being frustrated that he couldn't cash in due to restrictions on the shares.
Last edited by DCChak on Thu Dec 07, 2017 7:18 am, edited 1 time in total.

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

Post by Psyayeayeduck » Thu Dec 07, 2017 6:39 am

GoldenFinch wrote:
Thu Dec 07, 2017 6:10 am
Bitcoin went to over 14,000 overnight. Does this mean more people are throwing money into bitcoin or it is more valuable for some other reason. I know this is a stupid question, but I want to understand. Bitcoin feels like dot.com stocks to me, with people jumping on the momentum. But I don’t know what to think except that I can’t imagine myself ever using it.
That is exactly what it is. It's pure greed betting on the thought that it will go higher. This is the same route with the Dutch and tulips. This is the same route of the dot com bust. This is the same route when it came to flipping houses before the 2008-2009 Great Recession. If one was already in knees deep in BC before it became a daily news article, they have already won and should tap out. Unfortunately, there are those folks who will risk everything they have to get that A+ even though getting the A- is good enough.

It's like being on a game show where you have already won the dining room set, the BBQ grill, the year supply of maid service, the jewelry, the Around the World trip, and and a fistful of cash and risking all those prizes so you can get a car with odds not in your favor. Quit now and call it a win if you are already in. I feel no sympathy if one continues on this path despite dire warnings.

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

Post by fatlever » Thu Dec 07, 2017 8:29 am

Psyayeayeduck wrote:
Thu Dec 07, 2017 6:39 am

That is exactly what it is. It's pure greed betting on the thought that it will go higher. This is the same route with the Dutch and tulips. This is the same route of the dot com bust. This is the same route when it came to flipping houses before the 2008-2009 Great Recession. If one was already in knees deep in BC before it became a daily news article, they have already won and should tap out. Unfortunately, there are those folks who will risk everything they have to get that A+ even though getting the A- is good enough.
You do realize that the implementation of Bitcoin itself was experiment at a possible solution to the the complete lack of faith in governments and central banks where banks are bailed out by printing money out of thin air at the expense of everyone whose money is devalued?

Satoshi's message in the Bitcoin Genesis block:
The Times 03/Jan/2009 Chancellor on brink of second bailout for banks
Mr. Bogle is revered here for providing us with low cost index funds that give us low cost access to a wide range of investments and markets. But Satoshi's experiment as he called is has much further reaching consequences even if it remotely succeeds. Bitcoin has been fueled by speculation but what if it results in an economic black swan event? It's really surprising that such an intelligent as we have here have such a narrow view and are certain that Bitcoin is a ponzi scheme, tulips and will crash. There are many who believe in the economic benefits of Bitcoin so much that some have have given up their well paying careers advocating and evangelizing Bitcoin for years.

Jags4186
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Re: Jack Bogle Says ‘Avoid Bitcoin Like the Plague’

Post by Jags4186 » Thu Dec 07, 2017 8:42 am

fatlever wrote:
Thu Dec 07, 2017 8:29 am
You do realize that the implementation of Bitcoin itself was experiment at a possible solution to the the complete lack of faith in governments and central banks where banks are bailed out by printing money out of thin air at the expense of everyone whose money is devalued?
Was money really devalued though? Inflation has been very low and even central bankers are confused to why. There are places where homes are still under their 2007 peak. Very low unemployment but wages aren't rising very fast.
fatlever wrote:
Thu Dec 07, 2017 8:29 am
Satoshi's message in the Bitcoin Genesis block:
The Times 03/Jan/2009 Chancellor on brink of second bailout for banks
Mr. Bogle is revered here for providing us with low cost index funds that give us low cost access to a wide range of investments and markets. But Satoshi's experiment as he called is has much further reaching consequences even if it remotely succeeds. Bitcoin has been fueled by speculation but what if it results in an economic black swan event? It's really surprising that such an intelligent as we have here have such a narrow view and are certain that Bitcoin is a ponzi scheme, tulips and will crash. There are many who believe in the economic benefits of Bitcoin so much that some have have given up their well paying careers advocating and evangelizing Bitcoin for years.
The problem with Bitcoin, as I see it, is twofold.

1) You can create another superior cryptocurrency
2) No governing body which legitimizes it.

All world currencies have a very real demand, namely taxes. The United States requires taxes to be paid in US dollars. The United Kingdom requires taxes to be paid in British pounds. Germany requires taxes be paid in Euros. Canada requires taxes to be paid in Canadian dollars. While I can't speak for the other countries, in the United States if you avoid paying taxes for too long they throw you in jail and take all of your property. That threat creates a very real use for dollars.

Until there is a real use for Bitcoin that makes in indispensable over other crypto currencies it to me is merely a piece of hot "tech" that is in right now. Nokia used to be the hot cell phone until it wasn't. Better alternatives became available and people stopped using them.

Maybe I still don't quite understand!

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

Post by Psyayeayeduck » Thu Dec 07, 2017 8:56 am

fatlever wrote:
Thu Dec 07, 2017 8:29 am
Bitcoin has been fueled by speculation but what if it results in an economic black swan event?


You are calling it a black swan when we are smack in the middle of it not knowing if it is a black swan event or a bear's den. Seems like a foolish conclusion with limited data.

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

Post by alfaspider » Thu Dec 07, 2017 9:00 am

fatlever wrote:
Thu Dec 07, 2017 8:29 am
Psyayeayeduck wrote:
Thu Dec 07, 2017 6:39 am

That is exactly what it is. It's pure greed betting on the thought that it will go higher. This is the same route with the Dutch and tulips. This is the same route of the dot com bust. This is the same route when it came to flipping houses before the 2008-2009 Great Recession. If one was already in knees deep in BC before it became a daily news article, they have already won and should tap out. Unfortunately, there are those folks who will risk everything they have to get that A+ even though getting the A- is good enough.
You do realize that the implementation of Bitcoin itself was experiment at a possible solution to the the complete lack of faith in governments and central banks where banks are bailed out by printing money out of thin air at the expense of everyone whose money is devalued?

Satoshi's message in the Bitcoin Genesis block:
The Times 03/Jan/2009 Chancellor on brink of second bailout for banks
Mr. Bogle is revered here for providing us with low cost index funds that give us low cost access to a wide range of investments and markets. But Satoshi's experiment as he called is has much further reaching consequences even if it remotely succeeds. Bitcoin has been fueled by speculation but what if it results in an economic black swan event? It's really surprising that such an intelligent as we have here have such a narrow view and are certain that Bitcoin is a ponzi scheme, tulips and will crash. There are many who believe in the economic benefits of Bitcoin so much that some have have given up their well paying careers advocating and evangelizing Bitcoin for years.
I firmly believe that bitcoin is a bubble, but that does not mean it's a Ponzi scheme. A Ponzi scheme is when a promoter uses cash from new investors to pay back old investors (while pocketing a substantial proportion). That's not what is happening with bitcoin. It's just a plain-old asset bubble.

There's an outside chance that Bitcoin could become a world currency on par with the Dollar or the Pound, but in order for that to happen, the exponential value increase needs to slow significantly and the exchange component needs to become much smoother, and security needs to be improved. Frankly, I don't see how that happens from a logistic and practical standpoint.

Bitcoin could very well go to 100,000 or 1,000,000 before this is all over. But that doesn't mean I am getting in. Just not in my constitution to try to figure out who the greatest fool is.

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

Post by fatlever » Thu Dec 07, 2017 9:32 am

Psyayeayeduck wrote:
Thu Dec 07, 2017 8:56 am
fatlever wrote:
Thu Dec 07, 2017 8:29 am
Bitcoin has been fueled by speculation but what if it results in an economic black swan event?


You are calling it a black swan when we are smack in the middle of it not knowing if it is a black swan event or a bear's den. Seems like a foolish conclusion with limited data.
I am not saying it's a black swan event. I said what if it results in one -- what if it turns out to be one. I don't think we've seen anything like this and I think I am not sure how people can with absolute certainty call it modern tulips or ponzi scams.
alfaspider wrote:
Thu Dec 07, 2017 9:00 am

Bitcoin could very well go to 100,000 or 1,000,000 before this is all over. But that doesn't mean I am getting in. Just not in my constitution to try to figure out who the greatest fool is.
Well, I want to FIRE if Bitcoin can help if I do that responsibly, is that an issue? As much as I have been posting in the Bitcoin threads, I have been very conservative re-balancing out of Bitcoin every time it balloons up and then dollar cost average back in small amounts. I've lost out on a ton of gains that way. But I am certainly glad I got in and I am benefiting. Even if Bitcoin drops to 0, I've significantly reduced the number of years I have to work. If it's a black swan event, it's like I've won the lottery. It's no risk, potential lottery reward.

In a thread earlier this year, someone posted they had $250K in crypto and I was thinking they were nuts. Maybe they have a million now and they were rewarded for that risk. :oops:

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

Post by alfaspider » Thu Dec 07, 2017 10:46 am

fatlever wrote:
Thu Dec 07, 2017 9:32 am
Psyayeayeduck wrote:
Thu Dec 07, 2017 8:56 am
fatlever wrote:
Thu Dec 07, 2017 8:29 am
Bitcoin has been fueled by speculation but what if it results in an economic black swan event?


You are calling it a black swan when we are smack in the middle of it not knowing if it is a black swan event or a bear's den. Seems like a foolish conclusion with limited data.
I am not saying it's a black swan event. I said what if it results in one -- what if it turns out to be one. I don't think we've seen anything like this and I think I am not sure how people can with absolute certainty call it modern tulips or ponzi scams.
alfaspider wrote:
Thu Dec 07, 2017 9:00 am

Bitcoin could very well go to 100,000 or 1,000,000 before this is all over. But that doesn't mean I am getting in. Just not in my constitution to try to figure out who the greatest fool is.
Well, I want to FIRE if Bitcoin can help if I do that responsibly, is that an issue? As much as I have been posting in the Bitcoin threads, I have been very conservative re-balancing out of Bitcoin every time it balloons up and then dollar cost average back in small amounts. I've lost out on a ton of gains that way. But I am certainly glad I got in and I am benefiting. Even if Bitcoin drops to 0, I've significantly reduced the number of years I have to work. If it's a black swan event, it's like I've won the lottery. It's no risk, potential lottery reward.

In a thread earlier this year, someone posted they had $250K in crypto and I was thinking they were nuts. Maybe they have a million now and they were rewarded for that risk. :oops:
You can certainly gamble and win. If your goal is to be fabulously wealthy or FI very young, you are probably going to have to take some significant risks to get there. That's not my goal, and for me, the risk exceeds the potential reward. You can also greatly accelerate FI from going to Las Vegas and putting all of your investments on a spin of the roulette wheel- there's an almost 50% chance you will double your money. That doesn't make it responsible.

I don't understand your comment that bitcoin is "no risk." You have gotten outsized gains in part because there's a very real risk that bitcoin could fall to nominal value like the proverbial tulip bulb, just as you could loose all your money by putting everything on a roulette wheel. DCA is reducing your risk, but also your potential returns.

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