The Bear Market is officially...OFF?!?

[tvbcof]

I would have to claim to have lost a huge amount of money (by my standards) by virtue of not cashing out a bunch during the big run-up.

Missed potential profit doesn't really count as a loss, so I wouldn't worry about it too much.

Not worried about it at all.  It was a totally conscious and calculated decision to shoot for a much higher target.  If we would have gotten to around $600/BTC on the run-up I would have started the next phase.  We didn't.  On this last cycle.

I consider the 'higher target' a long-shot and will not be surprised at all if it never happens or if I miss the boat for some reason should it occur.  But I also considered 10x to be a long-shot and always anticipated the probability of a total loss.  I currently feel that the probability of hitting the second target is higher than I suspected hitting the first one was almost two years ago.

[Spaceman_Spiff]

I would have to claim to have lost a huge amount of money (by my stanmore dards) by virtue of not cashing out a bunch during the big run-up.

Missed potential profit doesn't really count as a loss, so I wouldn't worry about it too much.

This is incorrect. There was no 'potential' profit, there was actual profit that was lost afterwards. Yes, that is a loss. Just like it was a gain before.

I find it psychologically a lot easier not to look at it like that.  I believe if you start thinking that way, you get emotional and are more prone to mistakes.
Plus, I live happier if I look at it like 'play money' and 'lost the moment you start speculating with it'.  

[hl5460]

BTC price is determined by demand and supply. While the demand for BTC to purchase asic miner is dead right now, it's natural to see the price drop mildly. We got a long way to go.

[juca]

Greetings!
Everything that goes up, must go down. That's like life goes!

[evolve]

I would have to claim to have lost a huge amount of money (by my standards) by virtue of not cashing out a bunch during the big run-up.

Missed potential profit doesn't really count as a loss, so I wouldn't worry about it too much.

This is incorrect. There was no 'potential' profit, there was actual profit that was lost afterwards. Yes, that is a loss. Just like it was a gain before.

Sorry, but this is wrong.

It's not a gain until it is sold for a profit, and its not a loss until it is sold for a loss.  Until its sold, it is either "unrealized gain" or "unrealized loss". This is not the same as actual profit or loss (which is why you cant be taxed on it).

http://www.investopedia.com/terms/u/unrealizedgain.asp
http://www.investopedia.com/terms/u/unrealizedloss.asp

[RationalSpeculator]

I would have to claim to have lost a huge amount of money (by my standards) by virtue of not cashing out a bunch during the big run-up.

Missed potential profit doesn't really count as a loss, so I wouldn't worry about it too much.

This is incorrect. There was no 'potential' profit, there was actual profit that was lost afterwards. Yes, that is a loss. Just like it was a gain before.

Sorry, but this is wrong.

It's not a gain until it is sold for a profit, and its not a loss until it is sold for a loss.  Until its sold, it is either "unrealized gain" or "unrealized loss". This is not the same as actual profit or loss (which is why you cant be taxed on it).

http://www.investopedia.com/terms/u/unrealizedgain.asp
http://www.investopedia.com/terms/u/unrealizedloss.asp

Who said anything about the legal term 'unrealized gains'?

I was correcting him on the 'potential profit' wording he used.

[RationalSpeculator]

I would have to claim to have lost a huge amount of money (by my stanmore dards) by virtue of not cashing out a bunch during the big run-up.

Missed potential profit doesn't really count as a loss, so I wouldn't worry about it too much.

This is incorrect. There was no 'potential' profit, there was actual profit that was lost afterwards. Yes, that is a loss. Just like it was a gain before.

I find it psychologically a lot easier not to look at it like that.  I believe if you start thinking that way, you get emotional and are more prone to mistakes.
Plus, I live happier if I look at it like 'play money' and 'lost the moment you start speculating with it'.  

Hi Spaceman,

I admire your honesty and ability to look inwards. I sympathise with your desire to feel good about your investments and I understand that not recognizing a drop as a loss makes you feel not so bad. I can also understand that you have good reason to bend reality if you otherwise would panic sell.

However, I think you are taking a dangerous shortcut because bending of reality (or said less nicely 'fooling yourself') can lead to much worse disasters than say panic selling. Denying what you have at risk with untrue statements that it is 'just play money' while it is actually an important part of your capital, or denying that you lost when it went down, can lead to ruin.  

Facing the truth of a loss, although painful, is the only way to improve your investment decisions, as it is exactly that pain that one needs in order to be motivated to change. That's why I think recognizing a loss is important in order to become a better investor, while indeed also setting up an investment plan/strategy so that you are less prone to panic selling.

Sorry for the lecture

 

[evolve]

I would have to claim to have lost a huge amount of money (by my standards) by virtue of not cashing out a bunch during the big run-up.

Missed potential profit doesn't really count as a loss, so I wouldn't worry about it too much.

This is incorrect. There was no 'potential' profit, there was actual profit that was lost afterwards. Yes, that is a loss. Just like it was a gain before.

Sorry, but this is wrong.

It's not a gain until it is sold for a profit, and its not a loss until it is sold for a loss.  Until its sold, it is either "unrealized gain" or "unrealized loss". This is not the same as actual profit or loss (which is why you cant be taxed on it).

http://www.investopedia.com/terms/u/unrealizedgain.asp
http://www.investopedia.com/terms/u/unrealizedloss.asp

Who said anything about the legal term 'unrealized gains'?

I was correcting him on the 'potential profit' wording he used.

Those terms mean the same thing; potential profit and unrealized gains are synonymous

[Arcas]

I would have to claim to have lost a huge amount of money (by my standards) by virtue of not cashing out a bunch during the big run-up.

Missed potential profit doesn't really count as a loss, so I wouldn't worry about it too much.

No, I should be able to claim the millions I lost by not investing my life savings at $.01 per BTC and selling at exactly $260 as a loss on my taxes.

[molecular]

I would have to claim to have lost a huge amount of money (by my standards) by virtue of not cashing out a bunch during the big run-up.

Missed potential profit doesn't really count as a loss, so I wouldn't worry about it too much.

This is incorrect. There was no 'potential' profit, there was actual profit that was lost afterwards. Yes, that is a loss. Just like it was a gain before.

Sorry, but this is wrong.

It's not a gain until it is sold for a profit, and its not a loss until it is sold for a loss.  Until its sold, it is either "unrealized gain" or "unrealized loss". This is not the same as actual profit or loss (which is why you cant be taxed on it).

http://www.investopedia.com/terms/u/unrealizedgain.asp
http://www.investopedia.com/terms/u/unrealizedloss.asp

It's also a question of measuring stick. What's more "real"? Bitcoin or Fiat. Do you use the state-enforced fiat measuring stick, then yes, if you hold on to your coins through all the volatility, you have fluctuating unrealized gains/losses until you sell, then you have realized some gain or loss.

If you use bitcoin measuring stick and you hold some fiat, then the question is: when will you sell your fiat stash into this rally? (what goes up must come down).

If you use bitcoin measuring stick and have no fiat, you're not making any gains/losses, not even unrealized ones. You're just sitting on the sidelines with your real money.

[RationalSpeculator]

It's also a question of measuring stick. What's more "real"? Bitcoin or Fiat. Do you use the state-enforced fiat measuring stick, then yes, if you hold on to your coins through all the volatility, you have fluctuating unrealized gains/losses until you sell, then you have realized some gain or loss.

If you use bitcoin measuring stick and you hold some fiat, then the question is: when will you sell your fiat stash into this rally? (what goes up must come down).

If you use bitcoin measuring stick and have no fiat, you're not making any gains/losses, not even unrealized ones. You're just sitting on the sidelines with your real money.

It is way too early to measure value in bitcoins.

If all is in bitcoin your net worth did not go up in the runup, eventhough your purchasing power in the economy tenfolded.

This is a contradiction. Which part is wrong? 'your net worth did not go up' or 'your purchasing power in the economy tenfolded'?

[Spaceman_Spiff]

Missed potential profit doesn't really count as a loss, so I wouldn't worry about it too much.

This is incorrect. There was no 'potential' profit, there was actual profit that was lost afterwards. Yes, that is a loss. Just like it was a gain before.

I find it psychologically a lot easier not to look at it like that.  I believe if you start thinking that way, you get emotional and are more prone to mistakes.
Plus, I live happier if I look at it like 'play money' and 'lost the moment you start speculating with it'.  

Hi Spaceman,

I admire your honesty and ability to look inwards. I sympathise with your desire to feel good about your investments and I understand that not recognizing a drop as a loss makes you feel not so bad. I can also understand that you have good reason to bend reality if you otherwise would panic sell.

However, I think you are taking a dangerous shortcut because bending of reality (or said less nicely 'fooling yourself') can lead to much worse disasters than say panic selling. Denying what you have at risk with untrue statements that it is 'just play money' while it is actually an important part of your capital, or denying that you lost when it went down, can lead to ruin.  

Facing the truth of a loss, although painful, is the only way to improve your investment decisions, as it is exactly that pain that one needs in order to be motivated to change. That's why I think recognizing a loss is important in order to become a better investor, while indeed also setting up an investment plan/strategy so that you are less prone to panic selling.

Sorry for the lecture

I don't think I agree with you.  In general (for most aspects of life) I agree that people deluding themselves or telling "white lies" to others to make them less sad/more optimistic etc. has a net negative effect, because it screws up the facts, and you need the facts in your decision-making processes to figure out the optimal solution.
However, I believe in trading it is well-known that people tend to be overemotional, and are often incapable of making rational decisions even if something is screaming "overbought" or "oversold" in their face.  Denying our emotional nature is self-delusion too.

Furthermore, I seem to get the impression that you think that my decision to look at it as "play money" will make me be riskier with my capital.  I don't think that is necessarily the case, because you also dampen the greedy emotions that lead to overinvestment in an overpriced asset.  At least, if you can do it right. I won't deny that I still thought/think about one day buying a house with BTC profits, or felt somewhat flustered/angry when the bubble collapsed that I didn't take more profit.  But I try minimize those thoughts when they occur.

Finally, I also believe that you can learn from your mistakes even without being (too) emotionally involved, perhaps even more so.  If I play a board game or a computer game, I strongly want to get better at it, regardless of the fact that there is no money involved.  But maybe that is because of my competitive nature when it comes to games, maybe I am just more emotionally involved to get started.  Could be that there is no right universal answer, and everybody needs to adapt based on their own character  .

[evolve]

It's also a question of measuring stick. What's more "real"? Bitcoin or Fiat. Do you use the state-enforced fiat measuring stick, then yes, if you hold on to your coins through all the volatility, you have fluctuating unrealized gains/losses until you sell, then you have realized some gain or loss.

If you use bitcoin measuring stick and you hold some fiat, then the question is: when will you sell your fiat stash into this rally? (what goes up must come down).

If you use bitcoin measuring stick and have no fiat, you're not making any gains/losses, not even unrealized ones. You're just sitting on the sidelines with your real money.

It is way too early to measure value in bitcoins.

If all is in bitcoin your net worth did not go up in the runup, eventhough your purchasing power in the economy tenfolded.

This is a contradiction. Which part is wrong? 'your net worth did not go up' or 'your purchasing power in the economy tenfolded'?

This is the same point I was going to make.  Right now, BTC is integrally tied to USD... When the value drops, so does your purchasing power. If you bought 1 BTC at $266, right now you would still have 1 BTC, but you cant buy the same amount of stuff with it as you could 6 months ago.

[molecular]

It's also a question of measuring stick. What's more "real"? Bitcoin or Fiat. Do you use the state-enforced fiat measuring stick, then yes, if you hold on to your coins through all the volatility, you have fluctuating unrealized gains/losses until you sell, then you have realized some gain or loss.

If you use bitcoin measuring stick and you hold some fiat, then the question is: when will you sell your fiat stash into this rally? (what goes up must come down).

If you use bitcoin measuring stick and have no fiat, you're not making any gains/losses, not even unrealized ones. You're just sitting on the sidelines with your real money.

It is way too early to measure value in bitcoins.

If all is in bitcoin your net worth did not go up in the runup, eventhough your purchasing power in the economy tenfolded.

This is a contradiction. Which part is wrong? 'your net worth did not go up' or 'your purchasing power in the economy tenfolded'?

This is the same point I was going to make.  Right now, BTC is integrally tied to USD... When the value drops, so does your purchasing power. If you bought 1 BTC at $266, right now you would still have 1 BTC, but you cant buy the same amount of stuff with it as you could 6 months ago.

I don't buy stuff with BTC today, I buy stuff with BTC in 15 years.

[tvbcof]

good day sir, I see bitcoin as a powerful educational tool. The gaming software is still new and what I would classify as beta. We have a long way to go, so I seriously hope no one get's the wrong idea and falls for craft strategies that repackagie bitcoin as some sort of get rich quick scheme... Ira

I hope people do.  Bitcoin is fairly unsatisfactory as an exchange currency and attempting to use it in that manner will probably result in a collapse, or at least in an evolution which quickly removes it from the category of valuable solution.  Employing it as a low velocity high powered wealth representation solution is probably it's best hope for sustainability and competitiveness against other solutions.

OTOH, it is possible to do much better than Bitcoin when targeting any number of needed niches so it could be a good thing if it 'burns out' trying to support 'skittles and goat cheese' transactions the world over.  It is largely simple greed on my part to hope for Bitcoin to eventually do another leg-up trick since I happen to hold a lot of them.

[Spaceman_Spiff]

good day sir, I see bitcoin as a powerful educational tool. The gaming software is still new and what I would classify as beta. We have a long way to go, so I seriously hope no one get's the wrong idea and falls for craft strategies that repackagie bitcoin as some sort of get rich quick scheme... Ira

Sorry, but I don't see what you are getting at.  Are you saying that bitcoin is still a risky experiment, or that it has no real future and all of this is just like an interesting psychological test that will ultimately not lead to something usable? Or what exactly?

[evolve]

I don't buy stuff with BTC today, I buy stuff with BTC in 15 years.

Fair enough.

The purchasing power of BTC 15 years from now may still be lower than it is today, though. It's still a gamble, IMO.

[nobbynobbynoob]

I don't buy stuff with BTC today, I buy stuff with BTC in 15 years.

Fair enough.

The purchasing power of BTC 15 years from now may still be lower than it is today, though. It's still a gamble, IMO.

Definitely agree with "it's a gamble", but that risk is one of the reasons why BTC1 can be bought for less than $100.

[molecular]

I don't buy stuff with BTC today, I buy stuff with BTC in 15 years.

Fair enough.

The purchasing power of BTC 15 years from now may still be lower than it is today, though. It's still a gamble, IMO.

That's certainly true.

[evolve]

Don't get caught in the suckers rally, people.  Even though there are profits to be made, we are still in a bear market...dont get greedy.