I sold off all my (modest) crypto holdings this morning

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Katietsu
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Re: I sold off all my (modest) cryto holdings this morning

Post by Katietsu »

Green Street wrote: Mon May 03, 2021 2:01 pm
Flannelbeard wrote: Mon May 03, 2021 1:56 pm
Green Street wrote: Mon May 03, 2021 1:52 pm
stoptothink wrote: Mon May 03, 2021 1:37 pm
Wannaretireearly wrote: Mon May 03, 2021 8:52 am My mom told me teenagers that work with her are buying crypto. Mostly first time foray into stocks for these youngsters. Quote that comes to mind: "Somebody gonna get hurt, real bad..."
My best friend is an investment banker. He recently was asked by a neighbor who teaches high school economics to come talk about investing to one of his classes; he told me the exact same thing. Multiple kids in the class said they were buying crypto and NFTs. Scared the heck out of him. He immediately went home and talked to his wife about a future gameplan to discuss investing with their kids (aged newborn to 9).
Yeah because DeFi isn’t going to be the biggest proponent of wealth for the newest generation smh. I’ll keep saying it, people are going to be left behind.
Reddit-tier substanceless FOMO comment.

How did investing in internet stocks work out for people who correctly predicted that the internet was the "next big thing"?
You tell me? How did Amazon turn out? How did the internet turn out general? This biggest thing of the last generation?
These discussions always make me think of Halt and Catch Fire.
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alpenglow
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Re: I sold off all my (modest) cryto holdings this morning

Post by alpenglow »

Wannaretireearly wrote: Mon May 03, 2021 8:52 am My mom told me teenagers that work with her are buying crypto. Mostly first time foray into stocks for these youngsters. Quote that comes to mind: "Somebody gonna get hurt, real bad..."
I'm a middle school teacher with students trading cryptos and meme stocks.
cogito
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Re: I sold off all my (modest) cryto holdings this morning

Post by cogito »

Dunning-Kruger effect is pretty strong in these crypto threads. And from a board who's motto is "nobody knows nuthin", no less! I suppose that only applies to areas that bogleheads know a bit about.

I've been adjusting my crypto holdings to stay aligned with risk tolerance and goals, which have changed a little bit with the incredible good luck I've had with Ethereum. Still believe in the space. What a wild approach to investing, I know. It disheartens me that the most intelligent investing board on the internet is not only so willfully misinformed and ignorant about this multi-trillion dollar global asset class, but also aggressively hostile to the idea that there is something to it. I'm getting pretty strong Charlie Munger "I just hate the idea of it" vibes. You guys have had a few years now to figure it out.
Jack Burton
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Re: I sold off all my (modest) cryto holdings this morning

Post by Jack Burton »

mikejuss wrote: Mon May 03, 2021 4:38 pm Interesting. A question: how easy is it to convert cryptocurrency into cash? If you had, say, $1 million in cryptocurrency, could you sell it all at once--or is there a ceiling regarding how much can be sold at one time?
On a big enough exchange no issues, or even through an over the counter service which may have some minimum requirements (i.e >1M). Sending cash from you wallet to your bank may take some time, depending on the exchange’s daily withdrawal limits, but even those can be temporarily increased if requested.
jcricket73
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Re: I sold off all my (modest) cryto holdings this morning

Post by jcricket73 »

vitaflo wrote: Mon May 03, 2021 4:34 pm
Green Street wrote: Mon May 03, 2021 2:01 pm You tell me? How did Amazon turn out? How did the internet turn out general? This biggest thing of the last generation?
Amazon dropped 95% and took a decade to recover.
Heh, I tell this to people (I'm in tech) and they don't believe me. You literally have to fiddle with the stock chart before the peak of $100/share in Dec 99 is visible in a way that makes it clear how far it fell. Microsoft too - peaked in 1999 and then dropped 50% or more and stayed flat for 15 years! Apple was a meh stock from the early 80s until 2002. That's a long time!

Easy to sit here now and think everyone knew what would happen, and also that you wouldn't have capitulated on the way down, or sometimes when it bounced off the bottom but long before it even hit the previous peak (let alone the new high 15+ years later).
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vitaflo
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Re: I sold off all my (modest) cryto holdings this morning

Post by vitaflo »

cogito wrote: Mon May 03, 2021 5:31 pm Dunning-Kruger effect is pretty strong in these crypto threads. And from a board who's motto is "nobody knows nuthin", no less! I suppose that only applies to areas that bogleheads know a bit about.
Well, one bogleheadism is "don't invest in things you don't understand". I suspect this is part of the aversion to cryptocurrencies. It doesn't make a lot of sense to people.
stoptothink
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Re: I sold off all my (modest) cryto holdings this morning

Post by stoptothink »

vitaflo wrote: Mon May 03, 2021 6:12 pm
cogito wrote: Mon May 03, 2021 5:31 pm Dunning-Kruger effect is pretty strong in these crypto threads. And from a board who's motto is "nobody knows nuthin", no less! I suppose that only applies to areas that bogleheads know a bit about.
Well, one bogleheadism is "don't invest in things you don't understand". I suspect this is part of the aversion to cryptocurrencies. It doesn't make a lot of sense to people.
It probably doesn't make a lot of sense to junior high and high school students either; that doesn't seem to be stopping them from getting in the mix.
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vitaflo
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Re: I sold off all my (modest) cryto holdings this morning

Post by vitaflo »

stoptothink wrote: Mon May 03, 2021 6:38 pm
vitaflo wrote: Mon May 03, 2021 6:12 pm
cogito wrote: Mon May 03, 2021 5:31 pm Dunning-Kruger effect is pretty strong in these crypto threads. And from a board who's motto is "nobody knows nuthin", no less! I suppose that only applies to areas that bogleheads know a bit about.
Well, one bogleheadism is "don't invest in things you don't understand". I suspect this is part of the aversion to cryptocurrencies. It doesn't make a lot of sense to people.
It probably doesn't make a lot of sense to junior high and high school students either; that doesn't seem to be stopping them from getting in the mix.
They're also not bogleheads.
luckyducky99
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Re: I sold off all my (modest) cryto holdings this morning

Post by luckyducky99 »

vitaflo wrote: Mon May 03, 2021 6:12 pm
cogito wrote: Mon May 03, 2021 5:31 pm Dunning-Kruger effect is pretty strong in these crypto threads. And from a board who's motto is "nobody knows nuthin", no less! I suppose that only applies to areas that bogleheads know a bit about.
Well, one bogleheadism is "don't invest in things you don't understand". I suspect this is part of the aversion to cryptocurrencies. It doesn't make a lot of sense to people.
Frankly, I don’t think a lot of people understand how bonds work. Or how stock valuations based on discount cash flow models (in theory) work. But they’re still the right investments for most people. Stable value funds are also supported around here even though hardly anyone understands how they work.

The point being that most investment decisions fall back to trust in authority. And this isn’t necessarily wrong. Crypto is just a very high risk speculative vehicle but as such a vehicle it’s legitimate. The extent to which people understand how speculative and risky crypto is I think is the main question. I think most people buying crypto would openly acknowledge the real possibility that they could lose everything.
ericcohen
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Re: I sold off all my (modest) cryto holdings this morning

Post by ericcohen »

Green Street wrote: Mon May 03, 2021 2:39 pm
Flannelbeard wrote: Mon May 03, 2021 2:27 pm
Green Street wrote: Mon May 03, 2021 2:01 pm
Flannelbeard wrote: Mon May 03, 2021 1:56 pm
Green Street wrote: Mon May 03, 2021 1:52 pm

Yeah because DeFi isn’t going to be the biggest proponent of wealth for the newest generation smh. I’ll keep saying it, people are going to be left behind.
Reddit-tier substanceless FOMO comment.

How did investing in internet stocks work out for people who correctly predicted that the internet was the "next big thing"?
You tell me? How did Amazon turn out? How did the internet turn out general? This biggest thing of the last generation?
You have cherry-picked possibly the most successful stock from the Dotcom Era. Persuasive. Since the analogy seems to be lost on you, just like you couldn't directly invest in "the internet" as a technology, you can't do that with blockchain or DeFi either.
You did say how did investing internet stocks work right? I can “cherry pick” plenty more. Point is, ppl made out well and some ppl didn’t make out well during the dotcom bust, if you invested in the right things... you make out no? The fact that you say that I can’t invest in blockchain or DeFi tells me you don’t understand the space. If you want some courses to look up, I got you. You can enlighten yourself a little more old timer.
Green Street: I’d be interested in any courses or info/links you can provide about DeFi and blockchain. Feel free to PM me if you don’t want to post on the board. Thank you.
manatee2005
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Re: I sold off all my (modest) cryto holdings this morning

Post by manatee2005 »

alpenglow wrote: Mon May 03, 2021 5:14 pm
Wannaretireearly wrote: Mon May 03, 2021 8:52 am My mom told me teenagers that work with her are buying crypto. Mostly first time foray into stocks for these youngsters. Quote that comes to mind: "Somebody gonna get hurt, real bad..."
I'm a middle school teacher with students trading cryptos and meme stocks.
Yet you need to be 21 to gamble in vegas
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alpenglow
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Re: I sold off all my (modest) cryto holdings this morning

Post by alpenglow »

manatee2005 wrote: Mon May 03, 2021 7:25 pm
alpenglow wrote: Mon May 03, 2021 5:14 pm
Wannaretireearly wrote: Mon May 03, 2021 8:52 am My mom told me teenagers that work with her are buying crypto. Mostly first time foray into stocks for these youngsters. Quote that comes to mind: "Somebody gonna get hurt, real bad..."
I'm a middle school teacher with students trading cryptos and meme stocks.
Yet you need to be 21 to gamble in vegas
True story. Even more crazy, my wife's friend set up her son on Robinhood with some "play money". He's 8 and was trading GME. :shock:
sociologydude76
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Re: I sold off all my (modest) cryto holdings this morning

Post by sociologydude76 »

30% gain is an excellent gain. Cashing out some profits at that level is something more crypto investors should do.

I already sold some of my ETH I bought years ago. But I am still holding ETH BTC LINK and ALGO. I think each of those will be around for awhile even if this cycle ends and I get caught holding the bag for awhile.

My prediction for the bubble pop is July 31st 2021. Mostly a complete guess since no one has any idea really. But if you look at halving data and historical trends, this would be around where it would be give or take a month.

I think crypto is here to stay even after this cycle will inevitably end and the prices all drop 50%+. The mainstream support and massive utility of the coins makes it far less risky of an investment than a few years ago. BTC and ETH are much different than holding stock in a risky company as they are actually changing the financial system. Buying crypto now is like investing in the internet in the late 1990s. That said, it's still a risk and will have massive volatility. Especially the alt coins! Crypto is my "fun money" allocation and the vast majority goes into index funds.
finite_difference
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Re: I sold off all my (modest) cryto holdings this morning

Post by finite_difference »

HomerJ wrote: Mon May 03, 2021 3:03 pm
JonnyDVM wrote: Mon May 03, 2021 2:54 pm
Green Street wrote: Mon May 03, 2021 2:39 pm
Flannelbeard wrote: Mon May 03, 2021 2:27 pm
Green Street wrote: Mon May 03, 2021 2:01 pm

You tell me? How did Amazon turn out? How did the internet turn out general? This biggest thing of the last generation?
You have cherry-picked possibly the most successful stock from the Dotcom Era. Persuasive. Since the analogy seems to be lost on you, just like you couldn't directly invest in "the internet" as a technology, you can't do that with blockchain or DeFi either.
You did say how did investing internet stocks work right? I can “cherry pick” plenty more. Point is, ppl made out well and some ppl didn’t make out well during the dotcom bust, if you invested in the right things... you make out no? The fact that you say that I can’t invest in blockchain or DeFi tells me you don’t understand the space. If you want some courses to look up, I got you. You can enlighten yourself a little more old timer.
Don't get my thread locked gentlemen. I'm good enough at doing that myself. The dotcom era saw some massive winners, but many pets.com losers as well. There were many who were rich on paper and lost it all. Today there are many who have already made immense wealth with crypto and I think odds are high many of them will lose it all too if they are too heavy into a coin that ends up in the "loser" category. diversification is never a bad thing.
It wasn't just dumb stocks like pets.com.

CISCO turned out to be a bad stock to own.

CISCO!! The company that built all the routers that most companies were using. That was an obvious slam-dunk pick for anyone in IT who "understood the internet", but then it turned out not to be very good at all.

That's the lesson to take. It's hard to pick the winners
If you’ve been regularly investing in Cisco from the 90s you’re a millionaire many times over.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
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HomerJ
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Re: I sold off all my (modest) cryto holdings this morning

Post by HomerJ »

finite_difference wrote: Mon May 03, 2021 9:06 pm
HomerJ wrote: Mon May 03, 2021 3:03 pm
JonnyDVM wrote: Mon May 03, 2021 2:54 pm
Green Street wrote: Mon May 03, 2021 2:39 pm
Flannelbeard wrote: Mon May 03, 2021 2:27 pm

You have cherry-picked possibly the most successful stock from the Dotcom Era. Persuasive. Since the analogy seems to be lost on you, just like you couldn't directly invest in "the internet" as a technology, you can't do that with blockchain or DeFi either.
You did say how did investing internet stocks work right? I can “cherry pick” plenty more. Point is, ppl made out well and some ppl didn’t make out well during the dotcom bust, if you invested in the right things... you make out no? The fact that you say that I can’t invest in blockchain or DeFi tells me you don’t understand the space. If you want some courses to look up, I got you. You can enlighten yourself a little more old timer.
Don't get my thread locked gentlemen. I'm good enough at doing that myself. The dotcom era saw some massive winners, but many pets.com losers as well. There were many who were rich on paper and lost it all. Today there are many who have already made immense wealth with crypto and I think odds are high many of them will lose it all too if they are too heavy into a coin that ends up in the "loser" category. diversification is never a bad thing.
It wasn't just dumb stocks like pets.com.

CISCO turned out to be a bad stock to own.

CISCO!! The company that built all the routers that most companies were using. That was an obvious slam-dunk pick for anyone in IT who "understood the internet", but then it turned out not to be very good at all.

That's the lesson to take. It's hard to pick the winners
If you’ve been regularly investing in Cisco from the 90s you’re a millionaire many times over.
Depends on the start date.

$10,000 in Cisco in Jan 1996 is worth $120,000 today
$10,000 in VTSAX (Vanguard Total Stock Market) in Jan 1996 is worth $112,500 today.

But if the start date was Jan 1997
$10,000 in Cisco is worth $72,800 today
$10,000 in VTSAX is worth $94,301 today.

If the start date was Jan 1998
$10,000 in Cisco is worth $52,600 today
$10,000 in VTSAX is worth $71,300 today.

If the start date was Jan 1999, near the height of the mania, when all us young guys knew those "old-timers" was dumb as dirt, and their warnings were stupid...
$10,000 in Cisco is worth $21,385 today
$10,000 in VTSAX is worth $58,000 today.

At the actual height of the mania, Jan 2000
$10,000 in Cisco is worth $9,400 today... Read that again... It's been 21 years, and Cisco STILL hasn't reached it's high point again.
$10,000 in VTSAX is worth $47,200 today.

Cisco was not pets.com

Cisco made the equipment that was behind the Internet. The Internet was changing the world. Cisco was a slam dunk choice.

But just picking the Total Stock Market Index was the better choice during the time the Internet stocks were completely hyped and on everyone's lips.

Seriously look at those numbers again.

Every 20 years a new generation comes along and makes the same dumb mistakes. I guess that's just how it works.

Maybe today is 1996, but maybe it's 1999 or 2000. You guys all seem to think it's 1992... But very few people were talking about Cisco in 1992. There's an awful lot of hype about crypto right now... It seems a lot more like 1998-2000 at this point...

But who knows..
Last edited by HomerJ on Mon May 03, 2021 10:55 pm, edited 1 time in total.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
livelovelaugh00
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Re: I sold off all my (modest) cryto holdings this morning

Post by livelovelaugh00 »

I own ETH and Chainlink. Nice gain. Will continue to DCA to them.
Once I buy something, I tend to hold for long time. This time seems no exception.
finite_difference
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Re: I sold off all my (modest) cryto holdings this morning

Post by finite_difference »

HomerJ wrote: Mon May 03, 2021 10:03 pm
finite_difference wrote: Mon May 03, 2021 9:06 pm
HomerJ wrote: Mon May 03, 2021 3:03 pm
JonnyDVM wrote: Mon May 03, 2021 2:54 pm
Green Street wrote: Mon May 03, 2021 2:39 pm

You did say how did investing internet stocks work right? I can “cherry pick” plenty more. Point is, ppl made out well and some ppl didn’t make out well during the dotcom bust, if you invested in the right things... you make out no? The fact that you say that I can’t invest in blockchain or DeFi tells me you don’t understand the space. If you want some courses to look up, I got you. You can enlighten yourself a little more old timer.
Don't get my thread locked gentlemen. I'm good enough at doing that myself. The dotcom era saw some massive winners, but many pets.com losers as well. There were many who were rich on paper and lost it all. Today there are many who have already made immense wealth with crypto and I think odds are high many of them will lose it all too if they are too heavy into a coin that ends up in the "loser" category. diversification is never a bad thing.
It wasn't just dumb stocks like pets.com.

CISCO turned out to be a bad stock to own.

CISCO!! The company that built all the routers that most companies were using. That was an obvious slam-dunk pick for anyone in IT who "understood the internet", but then it turned out not to be very good at all.

That's the lesson to take. It's hard to pick the winners
If you’ve been regularly investing in Cisco from the 90s you’re a millionaire many times over.
Depends on the start date.

$10,000 in Cisco in Jan 1996 is worth $120,000 today
$10,000 in VTSAX (Vanguard Total Stock Market) in Jan 1996 is worth $112,500 today.

But if the start date was Jan 1997
$10,000 in Cisco is worth $72,800 today
$10,000 in VTSAX is worth $94,301 today.

If the start date was Jan 1998
$10,000 in Cisco is worth $52,600 today
$10,000 in VTSAX is worth $71,300 today.

If the start date was Jan 1999, near the height of the mania, when all us young guys knew those "old-timers" was dumb as dirt, and their warnings were stupid...
$10,000 in Cisco is worth $21,385 today
$10,000 in VTSAX is worth $58,000 today.

At the actual height of the mania, Jan 2000
$10,000 in Cisco is worth $9,400 today... Read that again... It's been 21 years, and Cisco STILL hasn't reached it's high point again.
$10,000 in VTSAX is worth $47,200 today.

Cisco was not pets.com

Cisco made the equipment that was behind the Internet. The Internet was changing the world. Cisco was a slam dunk choice.

But just picking the Total Stock Market Index was the better choice during the time the Internet stocks were completely hyped and on everyone's lips.

Seriously look at those numbers again.

Every 20 years a new generation comes along and makes the same dumb mistakes. I guess that's just how it works.

Maybe today is 1996, but maybe it's 1999 or 2000. You guys all seem to think it's 1992... But very few people were talking about Cisco in 1992. There's an awful lot of hype about crypto right now... It seems a lot more like 1998-2000 at this point...

But who knows..
Regularly invested.

Also, I don’t think you’re including reinvested dividends for either.

If you regularly invested in Cisco from the beginning until now you’d be rich.

From 1991: https://www.portfoliovisualizer.com/bac ... ion2_2=100

From 1994:

https://www.portfoliovisualizer.com/bac ... ion2_2=100
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
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HomerJ
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Re: I sold off all my (modest) cryto holdings this morning

Post by HomerJ »

finite_difference wrote: Tue May 04, 2021 2:39 am
HomerJ wrote: Mon May 03, 2021 10:03 pm
finite_difference wrote: Mon May 03, 2021 9:06 pm
HomerJ wrote: Mon May 03, 2021 3:03 pm
JonnyDVM wrote: Mon May 03, 2021 2:54 pm

Don't get my thread locked gentlemen. I'm good enough at doing that myself. The dotcom era saw some massive winners, but many pets.com losers as well. There were many who were rich on paper and lost it all. Today there are many who have already made immense wealth with crypto and I think odds are high many of them will lose it all too if they are too heavy into a coin that ends up in the "loser" category. diversification is never a bad thing.
It wasn't just dumb stocks like pets.com.

CISCO turned out to be a bad stock to own.

CISCO!! The company that built all the routers that most companies were using. That was an obvious slam-dunk pick for anyone in IT who "understood the internet", but then it turned out not to be very good at all.

That's the lesson to take. It's hard to pick the winners
If you’ve been regularly investing in Cisco from the 90s you’re a millionaire many times over.
Depends on the start date.

$10,000 in Cisco in Jan 1996 is worth $120,000 today
$10,000 in VTSAX (Vanguard Total Stock Market) in Jan 1996 is worth $112,500 today.

But if the start date was Jan 1997
$10,000 in Cisco is worth $72,800 today
$10,000 in VTSAX is worth $94,301 today.

If the start date was Jan 1998
$10,000 in Cisco is worth $52,600 today
$10,000 in VTSAX is worth $71,300 today.

If the start date was Jan 1999, near the height of the mania, when all us young guys knew those "old-timers" was dumb as dirt, and their warnings were stupid...
$10,000 in Cisco is worth $21,385 today
$10,000 in VTSAX is worth $58,000 today.

At the actual height of the mania, Jan 2000
$10,000 in Cisco is worth $9,400 today... Read that again... It's been 21 years, and Cisco STILL hasn't reached it's high point again.
$10,000 in VTSAX is worth $47,200 today.

Cisco was not pets.com

Cisco made the equipment that was behind the Internet. The Internet was changing the world. Cisco was a slam dunk choice.

But just picking the Total Stock Market Index was the better choice during the time the Internet stocks were completely hyped and on everyone's lips.

Seriously look at those numbers again.

Every 20 years a new generation comes along and makes the same dumb mistakes. I guess that's just how it works.

Maybe today is 1996, but maybe it's 1999 or 2000. You guys all seem to think it's 1992... But very few people were talking about Cisco in 1992. There's an awful lot of hype about crypto right now... It seems a lot more like 1998-2000 at this point...

But who knows..
Regularly invested.

Also, I don’t think you’re including reinvested dividends for either.

If you regularly invested in Cisco from the beginning until now you’d be rich.

From 1991: https://www.portfoliovisualizer.com/bac ... ion2_2=100

From 1994:

https://www.portfoliovisualizer.com/bac ... ion2_2=100
I did include reinvested dividends.

And I'm talking about the last 5 years of the dot-com mania.

My point is investing in something that appears to be a slam-dunk during the mania part doesn't always work out.

People are here stating "Well, obviously bitcoin is a great investment... Look how well it's done over the past few years!"

Well, people were saying the same thing about Internet stocks during late 90s... And not just the dumb ones, but the smart ones like Cisco... "Look how much money you would have made in Cisco! It's the back-bone of the Internet, which is the future! It's a sure winner..."

Yet investing in Cisco from the middle of 1996 through 2000 would have made you less over the long run than just investing the broad stock market index fund.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
sbelcroft
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Re: I sold off all my (modest) cryto holdings this morning

Post by sbelcroft »

finite_difference wrote: Tue May 04, 2021 2:39 am
HomerJ wrote: Mon May 03, 2021 10:03 pm
Maybe today is 1996, but maybe it's 1999 or 2000. You guys all seem to think it's 1992... But very few people were talking about Cisco in 1992. There's an awful lot of hype about crypto right now... It seems a lot more like 1998-2000 at this point...

But who knows..
Regularly invested.

Also, I don’t think you’re including reinvested dividends for either.

If you regularly invested in Cisco from the beginning until now you’d be rich.

From 1991: https://www.portfoliovisualizer.com/bac ... ion2_2=100

From 1994:

https://www.portfoliovisualizer.com/bac ... ion2_2=100
Picks the years that most spectacularly miss the point! :oops:
finite_difference
Posts: 2510
Joined: Thu Jul 09, 2015 7:00 pm

Re: I sold off all my (modest) cryto holdings this morning

Post by finite_difference »

Duplicate.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
finite_difference
Posts: 2510
Joined: Thu Jul 09, 2015 7:00 pm

Re: I sold off all my (modest) cryto holdings this morning

Post by finite_difference »

sbelcroft wrote: Tue May 04, 2021 11:03 am
finite_difference wrote: Tue May 04, 2021 2:39 am
HomerJ wrote: Mon May 03, 2021 10:03 pm
Maybe today is 1996, but maybe it's 1999 or 2000. You guys all seem to think it's 1992... But very few people were talking about Cisco in 1992. There's an awful lot of hype about crypto right now... It seems a lot more like 1998-2000 at this point...

But who knows..
Regularly invested.

Also, I don’t think you’re including reinvested dividends for either.

If you regularly invested in Cisco from the beginning until now you’d be rich.

From 1991: https://www.portfoliovisualizer.com/bac ... ion2_2=100

From 1994:

https://www.portfoliovisualizer.com/bac ... ion2_2=100
Picks the years that most spectacularly miss the point! :oops:
Pick any year and Cisco does well.

Personally I’d be happy with 18%+ CAGR over 20+ years
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
finite_difference
Posts: 2510
Joined: Thu Jul 09, 2015 7:00 pm

Re: I sold off all my (modest) cryto holdings this morning

Post by finite_difference »

HomerJ wrote: Tue May 04, 2021 10:51 am
finite_difference wrote: Tue May 04, 2021 2:39 am
HomerJ wrote: Mon May 03, 2021 10:03 pm
finite_difference wrote: Mon May 03, 2021 9:06 pm
HomerJ wrote: Mon May 03, 2021 3:03 pm

It wasn't just dumb stocks like pets.com.

CISCO turned out to be a bad stock to own.

CISCO!! The company that built all the routers that most companies were using. That was an obvious slam-dunk pick for anyone in IT who "understood the internet", but then it turned out not to be very good at all.

That's the lesson to take. It's hard to pick the winners
If you’ve been regularly investing in Cisco from the 90s you’re a millionaire many times over.
Depends on the start date.

$10,000 in Cisco in Jan 1996 is worth $120,000 today
$10,000 in VTSAX (Vanguard Total Stock Market) in Jan 1996 is worth $112,500 today.

But if the start date was Jan 1997
$10,000 in Cisco is worth $72,800 today
$10,000 in VTSAX is worth $94,301 today.

If the start date was Jan 1998
$10,000 in Cisco is worth $52,600 today
$10,000 in VTSAX is worth $71,300 today.

If the start date was Jan 1999, near the height of the mania, when all us young guys knew those "old-timers" was dumb as dirt, and their warnings were stupid...
$10,000 in Cisco is worth $21,385 today
$10,000 in VTSAX is worth $58,000 today.

At the actual height of the mania, Jan 2000
$10,000 in Cisco is worth $9,400 today... Read that again... It's been 21 years, and Cisco STILL hasn't reached it's high point again.
$10,000 in VTSAX is worth $47,200 today.

Cisco was not pets.com

Cisco made the equipment that was behind the Internet. The Internet was changing the world. Cisco was a slam dunk choice.

But just picking the Total Stock Market Index was the better choice during the time the Internet stocks were completely hyped and on everyone's lips.

Seriously look at those numbers again.

Every 20 years a new generation comes along and makes the same dumb mistakes. I guess that's just how it works.

Maybe today is 1996, but maybe it's 1999 or 2000. You guys all seem to think it's 1992... But very few people were talking about Cisco in 1992. There's an awful lot of hype about crypto right now... It seems a lot more like 1998-2000 at this point...

But who knows..
Regularly invested.

Also, I don’t think you’re including reinvested dividends for either.

If you regularly invested in Cisco from the beginning until now you’d be rich.

From 1991: https://www.portfoliovisualizer.com/bac ... ion2_2=100

From 1994:

https://www.portfoliovisualizer.com/bac ... ion2_2=100
I did include reinvested dividends.

And I'm talking about the last 5 years of the dot-com mania.

My point is investing in something that appears to be a slam-dunk during the mania part doesn't always work out.

People are here stating "Well, obviously bitcoin is a great investment... Look how well it's done over the past few years!"

Well, people were saying the same thing about Internet stocks during late 90s... And not just the dumb ones, but the smart ones like Cisco... "Look how much money you would have made in Cisco! It's the back-bone of the Internet, which is the future! It's a sure winner..."

Yet investing in Cisco from the middle of 1996 through 2000 would have made you less over the long run than just investing the broad stock market index fund.
I think Cisco stock is a bad example to use because it has done really well if you invested early or regularly invested in it. It beats the market in a lot of cases.

If you lump summed into Cisco at the peak, then yes, that didn’t perform well.

But lump summing into individual stocks is always a terrible idea.

If you’re going to lump sum, better do it in an index.

If that’s your point, that lump summing into individual stocks is a terrible idea, then I fully agree. But there are so many other tech examples to pick from that went to like zero. With Cisco, chances are you did well.
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HomerJ
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Re: I sold off all my (modest) cryto holdings this morning

Post by HomerJ »

finite_difference wrote: Tue May 04, 2021 2:40 pm I think Cisco stock is a bad example to use because it has done really well if you invested early or regularly invested in it. It beats the market in a lot of cases.
No, it didn't.

Use your same portfolio visualizer link above and keep changing the year.

Regular investing starting in 1996 - Cisco did worse than the S&P 500, and had a max drawdown of 86% at one point.

1997 - worse
1998 - worse
1999 - worse
2000 - worse
2001 - worse
2002 - worse
2003 - worse
2004 - worse
2005 - worse
2006 - worse
2007 - worse
2008 - worse
2009 - worse
2010 - worse
2011 - worse

Now that said, it didn't do much worse in the years after the dot-com crash.. It came pretty close to tracking the S&P 500. You still got rich picking Cisco and investing every year faithfully. But you got slightly richer by not picking at all, and you didn't have to suffer through a 86% crash either.

Yes, there are plenty of examples of tech companies that were hyped in dot-com days that went to ZERO, or made very little.

Cisco was indeed a solid choice, but even investing in the most solid of companies during a mania isn't a sure bet.

That's my point. Cisco was a slam-dunk, and even it did worse (slightly) than the market. A lot of the other ones like Yahoo or AOL or Lucent that were hyped to the moon did a lot worse.

My point is that the even the most solid pick by anyone who was generally knowledgeable about the Internet during the mania still didn't do as well as just ignoring the mania all together and investing in the total stock market index fund.

Edit: I think you were responding to me stating
CISCO turned out to be a bad stock to own.
That was incorrect of me... It was a fine stock to own over the long-run, but I find it amazing that even an easy stock pick like this has done worse than the market.

People always bring up pets.com and the young people today say "Oh, I would never have been dumb enough to think that sock puppet was going to make me rich", so they dismiss that example of the "madness of crowds". I'm just stating that even the SMART picks didn't beat the market if you suddenly got FOMO during the dot-com mania.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
hilink73
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Re: I sold off all my (modest) cryto holdings this morning

Post by hilink73 »

mikejuss wrote: Mon May 03, 2021 4:38 pm Interesting. A question: how easy is it to convert cryptocurrency into cash? If you had, say, $1 million in cryptocurrency, could you sell it all at once--or is there a ceiling regarding how much can be sold at one time?
Very easy. The market on the big exchanges is very liquid.
Just create some sell orders on your preferred exchange and you're good.
On Kraken you could also have used the OTC desk (https://www.kraken.com/en-us/features/otc-exchange/).
Haven't checked if other exchanges also offer this service, though.

The withdrawal limits differ across the exchanges.
For example on Kraken, I'm PRO tier and have a withdrawal limit of 10mio USD/day or 100mio USD/month.
On Coinbase Pro, I haven't applied for a higher tier and my withdrawal limit is 250k USD a day or something like that.
finite_difference
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Re: I sold off all my (modest) cryto holdings this morning

Post by finite_difference »

HomerJ wrote: Tue May 04, 2021 3:09 pm Cisco was indeed a solid choice, but even investing in the most solid of companies during a mania isn't a sure bet.

That's my point. Cisco was a slam-dunk, and even it did worse (slightly) than the market. A lot of the other ones like Yahoo or AOL or Lucent that were hyped to the moon did a lot worse.

My point is that the even the most solid pick by anyone who was generally knowledgeable about the Internet during the mania still didn't do as well as just ignoring the mania all together and investing in the total stock market index fund.

Edit: I think you were responding to me stating
CISCO turned out to be a bad stock to own.
That was incorrect of me... It was a fine stock to own over the long-run, but I find it amazing that even an easy stock pick like this has done worse than the market.

People always bring up pets.com and the young people today say "Oh, I would never have been dumb enough to think that sock puppet was going to make me rich", so they dismiss that example of the "madness of crowds". I'm just stating that even the SMART picks didn't beat the market if you suddenly got FOMO during the dot-com mania.
That’s correct, I feel like Cisco was not a terrible stock, but a solid one. It does show how the index approach just works phenomenally well. It’s really hard to beat the market.

I disagree that Cisco would be the most obvious pick. Maybe in terms of infrastructure. But then why not Juniper or Lucent? You would’ve been lucky if you picked Cisco. If history played over, I think it just as easily could’ve been another one that came out on top.

So I think Apple and Microsoft are way more obvious. Even now (just add Google.) Back then maybe add IBM and Intel.

Amazon would’ve been a non obvious pick that did extremely well.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
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HomerJ
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Re: I sold off all my (modest) cryto holdings this morning

Post by HomerJ »

finite_difference wrote: Tue May 04, 2021 4:42 pm I disagree that Cisco would be the most obvious pick. Maybe in terms of infrastructure. But then why not Juniper or Lucent? You would’ve been lucky if you picked Cisco. If history played over, I think it just as easily could’ve been another one that came out on top.
I agree... I DID own some Lucent, and that one dropped like 99% (did it ever go all the way to zero? I got out and stopped paying attention to it)
So I think Apple and Microsoft are way more obvious. Even now (just add Google.) Back then maybe add IBM and Intel.

Amazon would’ve been a non obvious pick that did extremely well.
Yep, except Microsoft did pretty poorly too for a long time.
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Re: I sold off all my (modest) cryto holdings this morning

Post by SlowMovingInvestor »

finite_difference wrote: Tue May 04, 2021 4:42 pm
I disagree that Cisco would be the most obvious pick. Maybe in terms of infrastructure. But then why not Juniper or Lucent? You would’ve been lucky if you picked Cisco. If history played over, I think it just as easily could’ve been another one that came out on top.

So I think Apple and Microsoft are way more obvious. Even now (just add Google.) Back then maybe add IBM and Intel.

Amazon would’ve been a non obvious pick that did extremely well.
IBM in the late 90s ? Definitely not. IBM's heyday ended in the 80s, and by 1990 it was clear it had serious competition in every line of business except mainframes, which were shrinking because of client/server and desktop. Microsoft, HP (Printers), Intel (Semiconductors), Sun, Oracle, SAP and others were challenging it.
Portfolio: 50% DOGE, 10% SPACs, 10% Frozen OJ futures, 10% MOON ETF, 10% NFTs , 5% FOMO ETF, 5% New Jersey Delis with $100M market cap :)
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Re: I sold off all my (modest) cryto holdings this morning

Post by surfstar »

My "money" is on the crypto crash triggering the next recession.

It's too hard to get a mortgage now vs 2004. But you can buy crypto on margin/leverage/blind faith. But so far I'm wrong. *shrug*
finite_difference
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Re: I sold off all my (modest) cryto holdings this morning

Post by finite_difference »

SlowMovingInvestor wrote: Tue May 04, 2021 4:52 pm
finite_difference wrote: Tue May 04, 2021 4:42 pm
I disagree that Cisco would be the most obvious pick. Maybe in terms of infrastructure. But then why not Juniper or Lucent? You would’ve been lucky if you picked Cisco. If history played over, I think it just as easily could’ve been another one that came out on top.

So I think Apple and Microsoft are way more obvious. Even now (just add Google.) Back then maybe add IBM and Intel.

Amazon would’ve been a non obvious pick that did extremely well.
IBM in the late 90s ? Definitely not. IBM's heyday ended in the 80s, and by 1990 it was clear it had serious competition in every line of business except mainframes, which were shrinking because of client/server and desktop. Microsoft, HP (Printers), Intel (Semiconductors), Sun, Oracle, SAP and others were challenging it.
Looking back, maybe that’s easy to say.

Even in the late 90s IBM had a lot of things going for it in addition to its entrenched mainframe business.

Remember:

-PowerPC, used in all Apple products.
-The PS3’s Cell processor, released in 2006, used PowerPC.
-IBM had the ThinkPad until 2005.
-IBM also sold desktops and rack servers.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
SlowMovingInvestor
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Re: I sold off all my (modest) cryto holdings this morning

Post by SlowMovingInvestor »

finite_difference wrote: Tue May 04, 2021 5:53 pm
SlowMovingInvestor wrote: Tue May 04, 2021 4:52 pm
IBM in the late 90s ? Definitely not. IBM's heyday ended in the 80s, and by 1990 it was clear it had serious competition in every line of business except mainframes, which were shrinking because of client/server and desktop. Microsoft, HP (Printers), Intel (Semiconductors), Sun, Oracle, SAP and others were challenging it.
Looking back, maybe that’s easy to say.

Even in the late 90s IBM had a lot of things going for it in addition to its entrenched mainframe business.

Remember:

-PowerPC, used in all Apple products.
-The PS3’s Cell processor, released in 2006, used PowerPC.
-IBM had the ThinkPad until 2005.
-IBM also sold desktops and rack servers.


Not exactly looking back. I used to work for a hardware maker (mostly server) and then for an IBM software partner in the early/mid 90s. At the hardware maker we were worried about Sun's SPARC servers , Dec's Alpha servers and HP"s servers more than IBM"s Power servers. And at the partner, IBM was pushing us to do OS/2 development, but it was clear that Windows was winning. It's not that IBM wasn't a competitor, it just wasn't dominant outside mainframes. We worried far more about MSFT even before it released NT.

And for desktop we used Compaq/Dell at work when we needed PCs. And Gateway or other clones at home. Not IBM PCs. The DOJ/FTC brought cases against MSFT in the 90s for market dominance, not against IBM.
Portfolio: 50% DOGE, 10% SPACs, 10% Frozen OJ futures, 10% MOON ETF, 10% NFTs , 5% FOMO ETF, 5% New Jersey Delis with $100M market cap :)
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Re: I sold off all my (modest) crypto holdings this morning

Post by orcycle »

I bought the same amount ($10,000) in Greyscale Bitcoin Trust a couple years ago and just tracking how it does. It’s probably not the most efficient vehicle to be in crypto but oh well, I didn’t have to open a new account and if it does great, all the better. If I’m still capable decades from now, I will sell it (in my Roth brokerage) and simplify my portfolio. Taking a profit is always a nice feeling, though, besides the FOMO.
Tribonian
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Re: I sold off all my (modest) crypto holdings this morning

Post by Tribonian »

My college freshman mines ethereum, gets paid in bitcoin, converts to cash and buys VTI once a month. It’s small time ($3-$4/day) and the commissions for conversion are outrageous as a percentage but he figures it’s free money. And his university uses green energy, so he has a clear conscience.
z91
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Re: I sold off all my (modest) crypto holdings this morning

Post by z91 »

I have a small (5k?) crypto holding. It's mostly for diversification purposes. It's way too late (IMO anyway) to be jumping into it thinking you could make it big. There is a lot priced in, and some of these coins have no real-life utility. It could shoot to the moon, but has an equal chance to go to near-zero like beanie babies. After all, we are just buying a virtual asset that has no intrinsic value.
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davibi02
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Re: I sold off all my (modest) crypto holdings this morning

Post by davibi02 »

Any recommendations on handling taxes? I've been mining ETH this year and apparently I'm supposed to be recording the payouts in USD at the time of receipt. If I sell some, but not all, how do I know which "coin" I am selling to determine the gains?
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Re: I sold off all my (modest) crypto holdings this morning

Post by manatee2005 »

davibi02 wrote: Tue May 04, 2021 10:57 pm Any recommendations on handling taxes? I've been mining ETH this year and apparently I'm supposed to be recording the payouts in USD at the time of receipt. If I sell some, but not all, how do I know which "coin" I am selling to determine the gains?
This is why I don't mine
finite_difference
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Re: I sold off all my (modest) crypto holdings this morning

Post by finite_difference »

davibi02 wrote: Tue May 04, 2021 10:57 pm Any recommendations on handling taxes? I've been mining ETH this year and apparently I'm supposed to be recording the payouts in USD at the time of receipt. If I sell some, but not all, how do I know which "coin" I am selling to determine the gains?
I think you can do HIFO, FIFO, etc. It’s up to you on how you want to optimize it:

https://www.forbes.com/sites/shehanchan ... ecific-id/
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
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