Bitcoin Forum

This is to share that I will publish my real asset allocation live here in a regular basis. I do this as it might be helpful to see for people who also agree that we are just before a major financial turbulence.


My hypotheses are:
1) Stocks will crash by 2016 and will mark new 15-20 year lows.
2) Precious metals will survive better but will also decline first before rallying strongly. It is key to own physical precious metal, not paper certificates.
3) The US Dollar will initially fare better against other currencies (particularly against the EUR), but then crash as well and may disappear in its current form by 2017-2018.
4) Overall asset prices and prices of goods will decline = we are in a unprecedented deflation.

You don't have to agree to this view. Most of these views are also similar to those offered on www.bullbearanalytics.com (http://www.bullbearanalytics.com), but this specific thread is solely based on my personal point of view.


Assets September 14, 2014.

90% Cash (USD)
6% Gold
2% Short Stocks (S&P 500)
1% Bitcoin
0.8% Monero
0.2% DIEM (as a "playground play", no serious fundamentals behind)

Why so few cryptos?

Are you anticipating a bitcoin and alt crypto crash soon?

Because
i) Cryptos have the second mover disadvantage. Bitcoin has the first mover advantage and unless bitcoin runs into a major problem, wil always be stronger longterm. Just look at Coke. First mover and always ahead of Pepsi, despite unrelentless attempts of Pepsi to take over market leadership.
ii) Most cryptos do not have a big enough competitive advantage or differentiation to overcome barrier i)
iii) Monero might gain more traction and that's why I hold them

Which ones do you suggest. I am happy to get convinced depending on your arguments.

I think the question is, why do you only have 1% in btc?

I think has saying why so few btc.

OK thanks, but then why so few BTC?

1% doesn't sound a lot, unless you are very rich.

For bitcoin forecasts, please refer to http://bit.ly/1qUp4qN (http://bit.ly/1qUp4qN). To be fair to the huge subscriber pool, we cannot publish the forecasts here.

In general, bitcoin may be stronger than many other assets, but since it is also a speculative vehicle, it may get affected by the ongoing and worsening flight to cash - as people may need to liquidate a lot of assets to pay their bills or cover losses in other assets.

Hope this helps you.

Unfortunately I am not rich...
We are talking a couple of thousands here, but more importantly, the point of this is to show the allocation in percentages, so that rich or less rich people can scale it to their needs.

About why no more BTC? I had close to 100% a while ago. But since the 1200 $ top, I went out. I will go in again when I judge the time is right.

Can you confirm that you consider the time right after we have had some sustained upward movement. Going for the lower risk approach of seeing the price going up, rather than trying to time the bottom?

yes, correct. This is my approach. I keep 1% in BTC and wait for buying more at a clear upward breakout or seeing a more panic-style bottom. We cover the proper timing for a bigger BTC allocation 24/7 here: http://bit.ly/1qUp4qN (http://bit.ly/1qUp4qN).

I really dont understand you. your predictions are that most fiat currencies will die in just next few years, but you hold 90% of your wealth in USD.

Why short the S&P when there is absolutely no long term bearish confirmation (like a weekly EMA/MA crossover etc.).

There is a high probability you will get squeezed and the S&P will just continue to rally to 2100.

If this is meant to be some form of investment strategy then i can't take you seriously. I will share 2 reasons. No doubt the forum will add a few more.

1.  90% investment in cash. Cash isn't an investment at less than 1% return so unless you think every other form of investment is about to devalue, by comparision, then its like putting it under your bed.

2 Having 1% only in bitcoin. What is the point? bitcoin is high risk with high potential return. 1% suggests you don't believe in Bitcoin so why bother as when it flies off to the moon you will enjoy unprecedented returns on almost F! all!

Seems to me you are worried about losing more than making.

If your net worth is over a million, 1% in BTC is more than enough.  :P

1. That's exactly what he is postulating. Deflation.

2. Maybe he wants to preserve his capital more and tries to minimize risk by reducing exposure during certain periods. Comparatively, he certainly isn't that risk averse, given that he stated that he held almost 100% in BTC before. You know, trading? :D

Monetising the portfolio is irrelavent. It's 1%. Also he is suggesting he had ALL his money in Bitcoin and managed to sell at EXACTLY the peak.

If I had sold like that, taking into account the current value I would have re invested more than 1% considering we are at cirace $475.

Seems to me it's all a lot of hot air to get people to buy into his website for advice u8nless he has a crystal ball and knows EXACTLY when the trough will botoom out of course!

agree with all of the above except the comment of "hot air".
The forecast service builds on in depth analysis and continuously outperforms buy and hold.

But this is not to advertise the forecasting service, it's about seriously protecting wealth in the next years.
Those who don't see the risk and those who dont want any forecast, do not need to follow or read this thread.

I would increase the S&P short to 10% and switch physical gold to physical silver as it is more undervalued but that is just me.

Interesting strategy, I hope it works out for you but I am worried about you holding 90% fiat. Bail ins are right around the corner.

Good luck and thanks for sharing your viewpoint.

Believe me, if you invested at date you registered (2010-09-18) $100 USD and bought 1,600 BTC @ $0.06 then BUY AND HOLD you have more than a couple of thousands here

My sentiments precisley. Something doesn't quite add up and I have filed it in the "Too Good To Be True" folder but maybe I am being cynical :-)

Maybe he means a couple of thousand BTC?

Maybe :-) ("Unfortunately" poor guy with 100 x a couple of thousand BTC)

He did not outperform B&H strategy.
He is in order of magnitudes below B&H if not in loss.

exactly.  given how long S3052 has been around since $0.06, he should be rich given his claims of trading outperformance and having picked the 1200 top with a 100% BTC portfolio.  he says he's outperformed buy and hold.  those of us who have used buy and hold since that time are up many thousands of %  and are indeed rich even despite the pullback.  yet he claims he's outperformed buy and hold through day trading, so he should be even richer than rich.

doesn't add up at all.  it never has. just look at the title of his sub thread.

Why Monero and not another one?

I'd suggest you to decrease USD and increase GOLD ad BTC.
If you invest 2% in Cryptos at least 1.8 should go on BTC. IMHO

Guys he may have used his earnings to pay for expenses over the years and thus has "only" a few thousand to invest now. Having a small investment portfolio now does not exclude him from making bank on his investments but then spending them prior to this thread.

Blitz, hows life? Long time no "see". I just realized it has been five years since we started here..!

And indeed, you are right. It is not abou clinging to BTC just because we love it. It is solely about how to best trade it. And apart from some short term opportunities, I do not see any reason to hold or accumulate BTC unless certain technical criteria will have been met.

Well BBR would be a better option than Monero. Its 1/15 the current market cap, better tech, and is about to get a lot of press for a lot of reasons, some of them obvious to those of use in the alt crypto world and some of them not so obvious.

Not to be an ass here, but if you were around 5 years ago, how the heck are you not "rich" or at least close to it?

I think you should share this as a cautionary tale in your thread for full disclosure.

Prices of goods measured in what? Not in dollars, since dollar will decline too. In gold? If price of everything, but gold is going to crash, then your hypothesis can be simplified to the: price of gold will rally. :)

It seems like there is confusion.
I have never and will also not here disclose my wealth to anyone.

But yes, I have outperformed buy and hold with bitcoin by orders of magnitude :-) and this led to a very sizable absolute gain. This is now re-invested into other areas.

But this thread is about a percentage example portfolio approach.

The forecast doesnt out perform buy and hold that such a misleading statement....  If you are a experienced trader maybe it could be helpful vs buy and hold.  When i subscribed i remember suggestions from your service of picking up long term holding positions @ around $900 (on the way back down from $1200 this was).  I also remember no predictions of the china bubble price boom, you guys didnt even give a slight clue we were going up to to insane prices like $1200.  Even that guy fontas in BTC-e was calling for a $1300 top iirc - this was when we were at like $200!

Newbies or inexperienced traders should always buy and hold if investing in bitcoin < debunk that.  

So you've experienced a +1,000,000x return but you're not rich?

You should be on the Forbes list

indeed... "by orders of magnitude" = at least 100x better than B&H  ::)
so let's say OP just bought 100$ worth of BTC in 2010, that's about 1000BTC at ~0.1$ each
100 * 1000 BTC * 1200 $/BTC = 120 million $ ... yeah that's not rich at all... just moderately wealthy  ;D

correction. not orders of magnitudes, but 1.5-2x better than B&H. And also recognize that there were hacks and losses due to MtGox and bitcoinica going down.

1.5 * 1 000 BTC  * $1 200 USD/BTC = 1 800 000 USD ->  "We are talking a couple (1,800) of thousands here"

What are you trying to prove here? As I mentioned, when BTC were worth much less, I donated a lot to good projects and lost some during hacks and exchange closures. This is why the real numbers are nowhere near your numbers and I need to work hard everyday.

OK,  you donated a lot to good projects and lost some during hacks and exchange closures. What about BUY AND HOLD (in paper wallet), did you OUTPERFORM this strategy ? Did you even make 1% compared to B&H ?

My personal outperformance was 1.5-2x vs. buy and holding bitcoins.

BitcoinBullbear.com forecast performance tracking can be found on the website.

And from now on, you can track my portfolio performance live here in this thread.

Since the start, bitcoin is down as predicted and thats why I only keep 1%.

I don't think it is entirely fair to compare B&H to someone's trading results purely on past profits of a few years.

1) Unconditional B&H is subject to complete risk of loss. On the other hand, trading is subject to counterparty risk. This risk can be managed in some ways at least (pick a longer term trading style and withdraw your money in between trades, try spread your assets on multiple exchanges). Presumably, this risk will decrease once Bitcoin gets away from shady exchanges and becomes tradeable via ETF on actual brokers.
2) The performance of Bitcoin the past few years may not be the expected outcome, and the strategy that worked very well in the past may not work as well in the future

Not to say buy and hold doesn't have merit. It is a great "set it and forget it" strategy. But say you allocate 5% to BTC and then it becomes 90% because it appreciated so much, then you'll probably want to do risk management either via re-allocation or by trading.

PS: I did not think you lost anything to MtGox, I'm surprised to hear that. Had thought you switched it all to Bitstamp before.

Blitz,
well said!
On MtGox, I lost some, but it was minor - because indeed I switched most to Stamp before. Where I lots a lot was bitcoinica.

2.
Assets September 18, 2014.

89% Cash (USD)
6% Gold
4% Short Stocks (S&P 500)
0.5% Bitcoin
0.3% Monero
0.2% DIEM (as a "playground play", no serious fundamentals behind)

Appreciate you sharing and updating this asset allocation table with everyone here.

Curious to hear your assessment of DRK in relation to XMR.  DRK seems to be doing well compared to other cryptos over the past few days.



 

Are you saying stocks will crash by January 1st 2016?  So within one year and 3.5 months?

So if USD will fare better than other currencies and you hold 90% USD, when USD crashes and disappears where will you move your money in 2017-2018?

Great questions!
First, timing is the most difficult to forecast. Price is easier. Along those lines, the S&P 500 will crash at least to a lower low than in 2009 in USD terms. Quite probably it will fall even lower into the 100 point range. In terms of timing, I'd give a range between 2016 and 2017.
We will keep trying to narrow down the timing in the forecasting work we do.

Second, when moving out of USD? I will probably move a high percentage into physical hold and silver stored in a safe location like at safe store from safewealth.com. And only keep the needed cash in local currencies to survive and buy food.

Update 3.
Assets September 19, 2014.

85% Cash (USD)
6% Gold
5% Short Stocks (S&P 500)
3.5% Bitcoin
0.3% Monero
0.2% DIEM (as a "playground play", no serious fundamentals behind)

Hi. This is an interesting thread to watch. Great job S30S2! I'm a bit wary on your 2016-17 predictions but I will grand you the dubiousness about the timing. The outcome is definitely certain and I have the same opinion as well. What I find intriguing though is that you moved your Monero holdings to BTC. Why did you do so?

Cheers

Thanks much!
In fact I moved cash to BTC today around 390 for a brief trade with stop at 379.
And moved another cash portion to short S&P 500 (2012) and Nasdaq 100 (4107)

You and me together. I've bought 4 btcs today as well (haven't done so for a couple of years tbh). I personally think that the bottom is reached ($370-380 range on Stamp). What do you think?

I think it has been a temporary bottom. I currently see an a-b-c bounce up. If it does not turn into an impulsive 5-wave move, we may see a breach of the lows in the next days. I raised my stop to 385 $.

Exited the BTC long position at 418.35

nice thread, ty

 :)

I wanted to read this and actually gain some insight, but quite frankly you don't have any real estate, so in other words you have no money.  Do you have more money than me, possibly, but if your investments don't include even your own home in them, than either A. you don't have a lot of money or B. you don't know what your talking about.

Also no retirement plans, life insurance, mutual funds, etc?  You just have 85 percent of all the cash you own sitting under your mattress?  Even having it in a bank should be listed if your trying to show your asset allocation. 

Not trying to lay into you, but yeah....

Good question

The asset allocation discussed here is meant to be for liquid assets in the general sense. I recentely ended all life insurances and got them liquidated to cash . I also sold all remaining stocks over the past weeks.
I keep a risk life insurance and the mandatory retirement plan from my work.


I don't have real estate as prices are in a bubble and I'd buy real estate in a couple of years if I really want to.

Also, real estate is different depending on your location .
Hence, this is why my example allocation is build on liquid assets and one that could work globally.

And I have nothing under the mattress. Cash is sitting in the (so far) safest banks.

Thanks for the clarification.

Update 4.
Assets September 21, 2014.

88% Cash (USD)
6% Gold
5% Short Stocks (S&P 500)
0.5% Bitcoin
0.3% Monero
0.2% DIEM (as a "playground play", no serious fundamentals behind)

Main change over the past 24h was to cash in +9.6% profit of a leveraged bitcoin short position.

Total portfolio up +0.8% since inception on September 14

• If someone would have invested 1,000 USD, this person would be up 8 USD.
• If someone would have invested 1,000,000 USD, this person would be up 8,000 USD.

Update 5.
Assets September 21, 2014.

85.3% Cash (USD)
6% Gold
5% Short Stocks (S&P 500)
3.2% Bitcoin
0.3% Monero
0.2% DIEM (as a "playground play", no serious fundamentals behind)

Added leveraged bitcoin long position at 406 $.

could you let us know your target of taking profit and stoploss

I would consider this a fairly conservative defensive portfolio in anticipation of of a Financial Crash. The USD providing the bulk of the defensive position while the short (S&P 500) and Crypto-currencies XBT, XMR and DIEM providing the growth part to offset the 1-2% decline in the purchasing power of USD. 

There is one part that leaves me baffled. Given that this is over 85% of the portfolio what happens if this happens sooner? Presumably the XBT, XMR and DIEM will skyrocket to compensate for the loss in value of the USD. The short (S&P 500) position will become worthless or have negative values since it is in terms of USD. I know there are very few alternatives but, still it is very hard to have a 85% USD position if one believes the USD is in such deep trouble.

Good point on USD.

I foresee two strategies to manage a USD collapse (which I think won't happen before mid 2015), but even if here is what I'd do:

1) Move USD to CHF. CHF will most likely be the fiat currency to survive the longest. Since USD is liquid I can do this overnight.
2) Move part of it into phyisical gold stored as a safe location, e.g. via http://www.safewealthgroup.com/ (http://www.safewealthgroup.com/) (I have no affiliation with them, but think this is one of the few possibilities at hand)

You forgot to post how you closed your long position at $450 and go short.  (what means that in reality $392 has triggered your stop loss)

I did not forget. Just did not take the time to post it. Here the update. By the way, I did not take long position at 450 at all. Not sure why you believe this.

Recent developments
1. September 20: Exited BTC long position started at 390 at 418.35. Gained 28.35 $/BTC. Stop was not triggered as I proactively sold at 418.35 $ as communicated on Sep 20 in this very thread.
2. September 21: Started new long position at 404.8 $ (avg entry). Exited at 395.74 $. Loss 9 $ / BTC.
3. Maintain S&P 500 short position at 2012. Stop now 2010.
4. Maintain NDX short position at 4107: Stop now 4105.

Total Portfolio development
Significant gain over past 5 days, mainly behind stocks SHORT position

Total portfolio up +1.6% since inception on September 14, 2014.
* Investment of 10,000 USD would be up 160 USD.
* Investment of 1,000,000 USD be up 16,000 USD.

Current Asset Allocation September 26, 2014
88% Cash (USD)
6% Gold
5% Short Stocks (S&P 500, NDX, both 10x leveraged)
0.5% Bitcoin
0.3% Monero
0.2% DIEM (as a "playground play", no serious fundamentals behind)

Starting to track annualized gains. I know it is early after 11 days, but annualized returns is the right benchmark and will get more stable over time.

Annualized gains: 53.1%

Not that I mind but aren't you effectively giving the top level of service from bullbearanalytics in here for free?

I may be wrong, but I believe he is somehow affiliated (owner? )

Yes, I am affiliated with http://bullbearanalytics.com/ (http://bullbearanalytics.com/).
But http://bullbearanalytics.com/ (http://bullbearanalytics.com/) offers more frequent and deeper forecasts, as well as specific trading ideas.
Further, I am posting this "live investing / trading" here for free on a temporary basis and we will see how it develops.

Total Portfolio development

Portfolio up +1.7% since inception on September 14, 2014.
* Investment of 10,000 USD would be up 170 USD.
* Investment of 1,000,000 USD be up 17,000 USD.

Current Asset Allocation September 28, 2014
88% Cash (USD)
6% Gold
5% Short Stocks (S&P 500, NDX, both 10x leveraged)
0.5% Bitcoin
0.3% Monero
0.2% DIEM (as a "playground play", no serious fundamentals behind)

Thinking of playing around with DOGE for a bit. I have about 1M at the moment. I foresee 150 Satoshis coming mid-week. To be honest, I saw the current rally coming when they announced the Litecoin fork but didn't have the time/will to mess around with at the time. Also, did you gave up with XMR? It's a nice entry point IMHO.

Cheers

Great questions.

About XMR = Monero: Still holding a small portion. Short term, I see a bull flag developing. As long as XMR remains above 0.00286, there is a bit more upside and I keep holding.

About DOGE: Could still be a good momentum play as long it remains above 86 Dogoshis :-).

Update: Went short -2.5% of portfolio on BTCUSD at 395.1 $.

Total Portfolio development

Update September 29, 2014. Consistently making profits.

Portfolio up +1.81% since inception on September 14, 2014.
* Investment of 10,000 USD would be up 181 USD.
* Investment of 1,000,000 USD be up 18,100 USD.

Current Asset Allocation September 28, 2014
88% Cash (USD)
6% Gold
5% Stocks SHORT (S&P 500, NDX, both 10x leveraged)
1.5% Bitcoin SHORT
0.3% Monero
0.2% DIEM (as a "playground play", no serious fundamentals behind)

How do you feel shorting bitcoins at the bottom ?

not sure I understand your question. The bitcoin SHORT was started at 398.76 $, is in the profit and now has a stop at 398.7 $ - this at the minimum will be closed neutral.
The stocks short position is getting even more into the money every day.

Total Portfolio development

Update October 2, 2014. Accelerating profit making.

Portfolio up +3.49% since inception on September 14, 2014.
* Investment of 10,000 USD would be up 349 USD.
* Investment of 1,000,000 USD be up 34,900 USD.

Current Asset Allocation
88% Cash (USD)
6% Gold
5% Stocks SHORT (S&P 500, NDX, both 10x leveraged, started at 2012 S&P 500, in profit, stop lowered to 1951)
1.5% Bitcoin SHORT (stop lowered now to 386.87, position in profit)
0.3% Monero
0.2% DIEM (as a "playground play", no serious fundamentals behind)

Not willing to interfere with your investment plan, but I wonder why didn't you invest in XMR a bit more. It seems it gains momentum at the moment. BTC, I'd give it a bit more time, but XMR will definitely will gain you some short profit...

I am closely watching XMR. That said, there has been a clear downtrend since 4 weeks, and I want to see at least a short term impulsive wave = trend up before adding more.

Whats your analysis of reasons for XMR downtrend?

1. Almost all financial assets are in a decline globally; stocks, metals, bitcoin, altcoins. We are currently in a "risk off" period and risky assets are most affected.
2. There is no big enough reason that XMR outperforms these other assets yet. XMR would need much more awareness and traction to make it outperform.

Update October 3, 2014.

Bitcoin (short position closed at 377 $. 22 $ gained per BTC). Added minor bitcoin long position

Current Asset Allocation
88% Cash (USD)
6% Gold
5% Stocks SHORT (S&P 500, NDX, both 10x leveraged, started at 2012 S&P 500, in profit, stop lowered to 1951)
0.5% Bitcoin
0.3% Monero
0.2% DIEM (as a "playground play", no serious fundamentals behind)

update ? :D

Thanks for the update request.
Here it is:

Update December 27, 2014.

Overall, over the past months, we focused on cash, gaining significant interest payments. We also liquidated S&P 500 shorts with a 10xleverage gain of 3.03% = 30.3% from 2012 down to 1951. DIEM position was also liquidated completely with average 12% gain.

Current Asset Allocation
94.6% Cash (USD)
5.4% Gold
0.0% Bitcoin
0.0% Monero
0.0% DIEM

As a result, portfolio is up by +6.02% since beginning of this thread and an annualized 20.94%.

Thanks for the update. Just one question, do you value the ETF news for early next year? I know you can always buy in on the way up, but what about getting on board right now? I think BTC is extremely low priced at this moment. Thanks.

Any reason why you sold your Monero? Or is it just getting out of crypto in general?

Sold Monero already in October 2014. Considering to enter again a Monero position soon.

Didn't knew that, thanks for the explanation.

You are welcome. I just started to build a Monero position 2min ago.

It is always interesting to see what others asset allocation's are.

Thanks for doing this.

This flared up my bullshit-o-meter as well given his conflicting statements of not being rich yet his trading strategy outperforms buy and hold. Lol

What a joke.

Perhaps the OP can enlighten us on how he was around at 6 cents and has been trading all along in a manner that has outperformed buy and hold for over 3 4 years, yet is not rich??? ::)

Update December 27, 2014, #2.

Current Asset Allocation
92.7% Cash (USD)
5.5% Gold
0.0% Bitcoin
1.9% Monero

Update December 29, 2014.

Current Asset Allocation
92.1% Cash (USD)
5.4% Gold
0.0% Bitcoin
2.5% Monero


Portfolio

• UP +6.6% since inception.
• UP +22.7% annualized.