Why going all-in is not financially responsible. Capital is your Security.

[justusranvier]

Again you ignored my vital question:
What if you are not able to earn a living due to illness, accident or old age?

I did not ignore it.

The majority of illnesses in the modern world are both chronic and preventable, so they can be minimized with appropriate lifestyle changes. For the risks that can't be eliminated you can hedge against by having a strong social network.

In the current worldwide fiscal climate the people who are already old are doomed, so there's not much they can do anyway besides speculate and hope. Those who aren't yet old have the opportunity to prepare before they end up in that position.

[RationalSpeculator]

Again you ignored my vital question:
What if you are not able to earn a living due to illness, accident or old age?

I did not ignore it.

The majority of illnesses in the modern world are both chronic and preventable, so they can be minimized with appropriate lifestyle changes. For the risks that can't be eliminated you can hedge against by having a strong social network.

In the current worldwide fiscal climate the people who are already old are doomed, so there's not much they can do anyway besides speculate and hope. Those who aren't yet old have the opportunity to prepare before they end up in that position.

I'm sorry. You did address my question. Your answer is that you will depend on others to take care of you. That is the tribe/socialist solution. I have rejected that solution in my opening post as it limits your freedom and the freedom of others.

[piramida]

I just know that if I converted all my savings into bitcoin when it was at 0.10 a piece, neither I nor any one of my relatives would've had to work again, ever. Probably grandchildren would've been covered, as well.

Completely risky and crazy, sure, but it would it have been totally worth it. But yeah, I'm a chicken I prefer security as well, as OP. So that means doomed for mediocrity.

[SomeWhere]

Pardon my French, but: fuck security. Nothing is safe, nothing is secure, enjoy the thrill and live.

[justusranvier]

I'm sorry. You did address my question.

I think we may have cross-posted.

Your answer is that you will depend on others to take care of you. That is the tribe/socialist solution. I have rejected that solution in my opening post as it limits your freedom and the freedom of others.

Any time you consume more than you produce (spending your savings) you depend on others to take care of you. The only difference is whether you are depending on anonymous producers in a market, or depending on people you've built up personal relationships with.

Saving means consuming less that you produce in the present in order to accumulate that which you guess the producers of what you want to consume in the future accept for trade. It presupposes those producers will be willing and able to trade with you, and that whatever you accumulate now will still be in your possession when you want to consume.

Is it less speculative to depend on your ability to predict what anonymous producers will want in the future, or is it less speculative to maximize your own productive ability and to build social capital with people you know and trust?

This is not to say that saving and speculation are bad, but I just don't think they are the best long term strategy to rely on.

[RationalSpeculator]

Pardon my French, but: fuck security. Nothing is safe, nothing is secure, enjoy the thrill and live.

False argument. The Permanent Portfolio is safe.

I don't think you'll enjoy the thrill if you lose your lives work.

[Spaceman_Spiff]

Pardon my French, but: fuck security. Nothing is safe, nothing is secure, enjoy the thrill and live.

False argument. The Permanent Portfolio is safe.

I don't think you'll enjoy the thrill if you lose your lives work.

I think you'll find that in an early adopter environment such as bitcoin still is, a lot of people have strong convictions and a risk tolerance that more traditional investors would find insane  .

[RationalSpeculator]

Your answer is that you will depend on others to take care of you. That is the tribe/socialist solution. I have rejected that solution in my opening post as it limits your freedom and the freedom of others.

Any time you consume more than you produce (spending your savings) you depend on others to take care of you. The only difference is whether you are depending on anonymous producers in a market, or depending on people you've built up personal relationships with.

My argument is that you should have savings. When you risk it all in bitcoin and it fails you will have no savings or a lot less then what you need to support you.

Once you have savings you can buy in the market. Sure all those goods are produced by people but I don't see how this point has relevance in our discussion?

If you have no savings, you indeed depend on others to take care of you. If you have build strong relationships that means you have a lot of 'credit' with them and they will give you back. This is the tribe solution.

Also, do you really believe you have build up such credit that they will give back to you in such an extend that they will take care of your bills when you are, say, terminally ill?   

Is it less speculative to depend on your ability to predict what anonymous producers will want in the future, or is it less speculative to maximize your own productive ability and to build social capital with people you know and trust?

This is not to say that saving and speculation are bad, but I just don't think they are the best long term strategy to rely on.

Why 'does one need to predict what anonymous producers will want in the future' in order to save capital?

Why is building social capital a sufficient replacement for building financial capital?

I think it is not this or that. It is this - and - that. Building strong personal relationships can help you very well in times of difficulty. Building financial capital can also help you very well in times of difficulty. One however is credit, the other one is capital. A big difference.

[justusranvier]

Why 'does one need to predict what anonymous producers will want in the future' in order to save capital?

I agree with bullioner about the definition of capital.

Financial assets are not capital. Factories, energy, skills, and abilities are capital. Financial assets have been used for a long time to control and direct capital but that does not mean they are capital. Financial assets produce nothing. People, machines, energy, skills, and knowledge produce everything.

My argument is that your primary focus should be building true capital: the ability to produce new wealth, and treat speculation as what it really is - gambling.

[FreeMoney]

I thought the answer was going to be that you need something with which to buy coins if a better deal is offered.

[RationalSpeculator]

False argument. The Permanent Portfolio is safe.

How well did the "permanent portfolio" work for people living in Russia in 1917 ?

Nothing is safe. "Security" is just a bet that tomorrow will not be worst than yesterday

That period has not been tested to my knowledge. Though many other periods and crises have been tested with the permanent portfolio and it worked.

Can you show me that the permanent portfolio failed to preserve your purchasing power in Russia 1917, or any other period/crises?

[RationalSpeculator]

I think you'll find that in an early adopter environment such as bitcoin still is, a lot of people have strong convictions and a risk tolerance that more traditional investors would find insane   .

Strong convictions/belief in bitcoin I have no problem with. High risk tolerance also not. However, false statements, untruths, ignorance, and denial I don't like.

I have yet to meet the first person here who goes all-in, and at the same time is consciously recognizing he is risking to not have any savings if he were to become incapable to work due to illness, accident or even old age.

[randrace]

Stocks, bonds = zeroed
Gold = confiscated (by mean of torture if necessary)
Any other property = confiscated and given to the "community"

Will I still have internet access in this scenario?

[RationalSpeculator]

Can you show me that the permanent portfolio failed to preserve your purchasing power in Russia 1971, or any other period/crises?

Stocks, bonds = zeroed
Gold = confiscated (by mean of torture if necessary)
Any other property = confiscated and given to the "community"

By this time the only thing that you could have to keep your purchasing power - and your life - was a subscription to the bolchevik party ...

Since cash was the same as gold then the Permanent Portfolio in Russia 1917 would have consisted of 33% stocks, 33% bonds and 33% cash.

Do you have numbers/prove that the values of stocks and bonds were zeroed?

The Permanent Portfolio consist of 25%/33% physical gold. It is also strongly advised to store part of it outside your country. If you did the Permanent Portfolio well that should have allowed you to preserve part of your capital and even flee the country.

[MonadTran]

It doesn't matter what is, and what isn't, financially responsible, since not every person would want, or need, to be financially responsible.

If your personal priority is security, you are free to invest into proven assets.

What I needed was a decent chance to become moderately rich, while helping a just cause, not risking too much, and not speding too much time trading. So I went 20% in Bitcoin (it should now be closer to 50%).

I would perfectly understand if a young professional with no family went all-in.

[RationalSpeculator]

It doesn't matter what is, and what isn't, financially responsible, since not every person would want, or need, to be financially responsible.

If your personal priority is security, you are free to invest into proven assets.

What I needed was a decent chance to become moderately rich, while helping a just cause, not risking too much, and not speding too much time trading. So I went 20% in Bitcoin (it should now be closer to 50%).

I would perfectly understand if a young professional with no family went all-in.

Congratulations on your very successful speculation.

Ofcourse you are free to chose not to be financially responsible but why does it not matter what financially responsibility is?

I agree bitcoin gives you a good chance to become rich. Especially if you don't balance out of it and hold on to your coins tight.

But indeed very quickly this becomes a large % of your capital. And it would be untrue to say for example that you risk only 20%, as today you risk losing 50% of your capital if bitcoin fails.  

[bitlybit]

i bought a 1000 bitcoins back at $ 5 a year ago for $ 5200 and am now almost at $ 50000 :D:D:D:D

i am hold because i think bitcoin is a very good investment and i am a profressional trader already from before bitcoin

i think that bitcoin is safe investment for me because i am good at knowing the future

[RationalSpeculator]

i bought a 1000 bitcoins back at $ 5 a year ago for $ 5200 and am now almost at $ 50000 :D:D:D:D

Great to hear  

i think that bitcoin is safe investment for me because i am good at knowing the future

If you are good at predicting the future and speculating you are able to estimate your chances of success. Even with the best speculations, like bitcoin certainly is, there is always a small chance that it doesn't work out. So logically betting all your life savings on it is not responsible. You not agree?  

[bpd]

One of the beautiful things about buying bitcoin right now is that there is NO NEED to go all in! It is such an asymmetric bet, that in a truly ridiculous upside scenario, investing even a small amount at today's prices will make you very very wealthy. If you invested 5% of your net worth, and bitcoin went up 100x, you'd be 84% in bitcoin at THAT point, but at that time, it would actually be a much safer holding by virtue of the implications of its successful history.

There are a lot of unknowable risks still lurking out there. At this time, unless your net worth is extremely low compared to your salary (i.e. you're young and you basically haven't saved much), going all in is just a recipe for panic-selling when the inevitable volatility rears its head. In general, if you can't sleep at night because of your bitcoin holdings, you have too much invested.

[RationalSpeculator]

One of the beautiful things about buying bitcoin right now is that there is NO NEED to go all in! It is such an asymmetric bet, that in a truly ridiculous upside scenario, investing even a small amount at today's prices will make you very very wealthy. If you invested 5% of your net worth, and bitcoin went up 100x, you'd be 84% in bitcoin at THAT point, but at that time, it would actually be a much safer holding by virtue of the implications of its successful history.

There are a lot of unknowable risks still lurking out there. At this time, unless your net worth is extremely low compared to your salary (i.e. you're young and you basically haven't saved much), going all in is just a recipe for panic-selling when the inevitable volatility rears its head. In general, if you can't sleep at night because of your bitcoin holdings, you have too much invested.

I fully agree with first part. I might be wrong but I think it is not responsible for a young adult with a job and without any savings, neither. Because that's his primary goal is to build up savings/secure capital. Going all-in in bitcoin means he will also lose all his capital if it fails. Why do you make an exception for such person? I also have a part that wants me to go all in so part of me would be very happy if you could give good reasons why it does not apply to such person.