Bitcoin
Posted by: Kevin Richardson on 06 August 2017
I'm selling all my material possessions, equities and bonds. So... I'll be back in 5 years once I have my Statement system up and running. Until then, thanks for all the good advice.
Hi Kevin,
I've taken my own advice, and withdrawn my original modest investment back safely into my bank account. 
Mind you, the way things have been going over the last few days, the remaining "no risk" balance today still represents double the figure I initially chucked in, and so, for me, it's all just a bit of fun from here on in. 
Thanks for your valued assistance, as a complete "newbie" to the world of cryptocurrency.
dave marshall posted:Hi Kevin,
I've taken my own advice, and withdrawn my original modest investment back safely into my bank account.
Mind you, the way things have been going over the last few days, the remaining "no risk" balance today still represents double the figure I initially chucked in, and so, for me, it's all just a bit of fun from here on in.
Thanks for your valued assistance, as a complete "newbie" to the world of cryptocurrency.
Check the definition of "opportunity cost".
But good for you for taking some of the other "investors"' money. Kevin may advise that you get your funds out of the risky fiat currency immediately, though. Perhaps get it back into a safe investment like LTC......
Yes, Winky, I did engage in "opportunity cost" theory, when deciding to relinquish some of today's maximum available "profit" in favour of recovering my initial "investment".
The thing is that the remaining risk free balance, or other "investors" money, as you put it, stands at more than twice the value of that original stake.
I think of it as a day at the races, where one rocks up with an amount which one is prepared to gamble, and probably lose, just for the fun of taking part, except that one trebled one's money on the first race, stuffed one's money firmly back into one's wallet, and had some completely risk free fun betting on the remaining races, with the balance of those winnings.
dave marshall posted:Yes, Winky, I did engage in "opportunity cost" theory, when deciding to relinquish some of today's maximum available "profit" in favour of recovering my initial "investment".
The thing is that the remaining risk free balance, or other "investors" money, as you put it, stands at more than twice the value of that original stake.
I think of it as a day at the races, where one rocks up with an amount which one is prepared to gamble, and probably lose, just for the fun of taking part, except that one trebled one's money on the first race, stuffed one's money firmly back into one's wallet, and had some completely risk free fun betting on the remaining races, with the balance of those winnings.
I'd argue that what you did was not really reflective of opportunity-cost thinking, and it was also likely wrong of me to suggest that this really the main thing here.
Let me put it another way. Presumably the price at which you sold, you considered to be fair, all things considered. That you only sold a portion of your take is a form of diversification. But if you lose the remaining stake, it is your loss, just as if you had lost your initial stake. You will perhaps feel better than if it was your original stake, but the money is lost to you just the same.Things like "taking your profits" on the upside and "dollar cost averaging" on the downside are psychologically-based strategies that can make an "investor" feel better about their position, but the value of a trade is always independent of previous trades. Perhaps I am talking more about a variation of the sunk-cost fallacy.
dave marshall posted:Yes, Winky, I did engage in "opportunity cost" theory, when deciding to relinquish some of today's maximum available "profit" in favour of recovering my initial "investment".
The thing is that the remaining risk free balance, or other "investors" money, as you put it, stands at more than twice the value of that original stake.
I think of it as a day at the races, where one rocks up with an amount which one is prepared to gamble, and probably lose, just for the fun of taking part, except that one trebled one's money on the first race, stuffed one's money firmly back into one's wallet, and had some completely risk free fun betting on the remaining races, with the balance of those winnings.
The nice thing is the "races" will continue to run for years. You may have a small fortune in 20 years.
winkyincanada posted:dave marshall posted:Yes, Winky, I did engage in "opportunity cost" theory, when deciding to relinquish some of today's maximum available "profit" in favour of recovering my initial "investment".
The thing is that the remaining risk free balance, or other "investors" money, as you put it, stands at more than twice the value of that original stake.
I think of it as a day at the races, where one rocks up with an amount which one is prepared to gamble, and probably lose, just for the fun of taking part, except that one trebled one's money on the first race, stuffed one's money firmly back into one's wallet, and had some completely risk free fun betting on the remaining races, with the balance of those winnings.
I'd argue that what you did was not really reflective of opportunity-cost thinking, and it was also likely wrong of me to suggest that this really the main thing here.
Let me put it another way. Presumably the price at which you sold, you considered to be fair, all things considered. That you only sold a portion of your take is a form of diversification. But if you lose the remaining stake, it is your loss, just as if you had lost your initial stake. You will perhaps feel better than if it was your original stake, but the money is lost to you just the same.Things like "taking your profits" on the upside and "dollar cost averaging" on the downside are psychologically-based strategies that can make an "investor" feel better about their position, but the value of a trade is always independent of previous trades. Perhaps I am talking more about a variation of the sunk-cost fallacy.
"if you lose the remaining stake, it is your loss, just as if you had lost your initial stake. You will perhaps feel better than if it was your original stake, but the money is lost to you just the same".
'Fraid we just seem to see things differently, as I don't see the remaining risk free balance as being "mine", since it's not as if it resulted from any "work" on my part.
I simply took a gamble which paid off. The "day at the races" philosophy I mentioned earlier works fine for me, so a loss of the remaining balance would only be "my" loss, were I to allow it to assume that role.
dave marshall posted:"if you lose the remaining stake, it is your loss, just as if you had lost your initial stake. You will perhaps feel better than if it was your original stake, but the money is lost to you just the same".
'Fraid we just seem to see things differently, as I don't see the remaining risk free balance as being "mine", since it's not as if it resulted from any "work" on my part.
I simply took a gamble which paid off. The "day at the races" philosophy I mentioned earlier works fine for me, so a loss of the remaining balance would only be "my" loss if I were to allow it to assume that role.
No, we agree that it is just a difference in how we "see" things. If I lose $100, then I have lost $100 regardless of whether I just found it, won it, or whether I worked for it. I'll feel differently perhaps, but there's no getting around that $100 is $100, regardless of what I "feel" that particular $100 is worth. (Unlike cryptos which are certainly only worth what the market "feels" they are worth.)
Good piece by Kevin O'Leary today who asserted that until counterparties accepted BTC without requiring insurance to cover price risk during prior to settlement (which is of course, conversion back to fiat or delivery of actual goods and services), they couldn't be considered a "currency". I'll add that until I'm paid, and happy to be paid in BTC, I won't consider it a currency.
winkyincanada posted:dave marshall posted:"if you lose the remaining stake, it is your loss, just as if you had lost your initial stake. You will perhaps feel better than if it was your original stake, but the money is lost to you just the same".
'Fraid we just seem to see things differently, as I don't see the remaining risk free balance as being "mine", since it's not as if it resulted from any "work" on my part.
I simply took a gamble which paid off. The "day at the races" philosophy I mentioned earlier works fine for me, so a loss of the remaining balance would only be "my" loss if I were to allow it to assume that role.
No, we agree that it is just a difference in how we "see" things. If I lose $100, then I have lost $100 regardless of whether I just found it, won it, or whether I worked for it. I'll feel differently perhaps, but there's no getting around that $100 is $100, regardless of what I "feel" that particular $100 is worth. (Unlike cryptos which are certainly only worth what the market "feels" they are worth.)
Good piece by Kevin O'Leary today who asserted that until counterparties accepted BTC without requiring insurance to cover price risk during prior to settlement (which is of course, conversion back to fiat or delivery of actual goods and services), they couldn't be considered a "currency". I'll add that until I'm paid, and happy to be paid in BTC, I won't consider it a currency.
Dave will never lose anything. He has acquired x VTC with a basis of $0.00. The number of VTC he owns will never decrease. He may lose some potential USD in the short term but VTC is likely to appreciate rapidly over the next two years. So the relevant number is not how many USD are at risk but how many VTC he owns.
He started with x $ and now has x $ + y VTC. Pretty smart move as he will be able to buy VTC again if it ever has a "price correction."
The probability of VTC going to $0.00 approaches 0%. The probability of VTC going to $17 in next year is better than 50%. The EV of holding VTC is > 1.
Kevin Richardson posted:winkyincanada posted:dave marshall posted:"if you lose the remaining stake, it is your loss, just as if you had lost your initial stake. You will perhaps feel better than if it was your original stake, but the money is lost to you just the same".
'Fraid we just seem to see things differently, as I don't see the remaining risk free balance as being "mine", since it's not as if it resulted from any "work" on my part.
I simply took a gamble which paid off. The "day at the races" philosophy I mentioned earlier works fine for me, so a loss of the remaining balance would only be "my" loss if I were to allow it to assume that role.
No, we agree that it is just a difference in how we "see" things. If I lose $100, then I have lost $100 regardless of whether I just found it, won it, or whether I worked for it. I'll feel differently perhaps, but there's no getting around that $100 is $100, regardless of what I "feel" that particular $100 is worth. (Unlike cryptos which are certainly only worth what the market "feels" they are worth.)
Good piece by Kevin O'Leary today who asserted that until counterparties accepted BTC without requiring insurance to cover price risk during prior to settlement (which is of course, conversion back to fiat or delivery of actual goods and services), they couldn't be considered a "currency". I'll add that until I'm paid, and happy to be paid in BTC, I won't consider it a currency.
Dave will never lose anything. He has acquired x VTC with a basis of $0.00. The number of VTC he owns will never decrease. He may lose some potential USD in the short term but VTC is likely to appreciate rapidly over the next two years. So the relevant number is not how many USD are at risk but how many VTC he owns.
He started with x $ and now has x $ + y VTC. Pretty smart move as he will be able to buy VTC again if it ever has a "price correction."
The probability of VTC going to $0.00 approaches 0%. The probability of VTC going to $17 in next year is better than 50%. The EV of holding VTC is > 1.
"Dave will never lose anything. He has acquired x VTC with a basis of $0.00. The number of VTC he owns will never decrease."
Nicely put, thank you.