Why didn't you sell?

[oda.krell]

Meh. You know (cause I told you already ), your posts get a lot of respect from me, sgbett. This one is no different, 95% insightful, but a sweeping line like "TA is apophenia" is just, no offense, dumb. Might as well claim particle physics is like predicting lottery numbers -- just because the process is stochastic doesn't mean there are no patterns.

sorry for my sweeping and somewhat misleading statement - you are right the truth is more complicated I agree - but I had to keep it simple for this very special case.

what I should have said is 99% of traders are 100% lucky. 1% of traders are only 49% lucky - they are 'the house' so to speak.

Coming back here to quote this paragraph. If you don't mind, I'm going to refer to it in future discussions about whether trading is profitable or not (this topic always come up, with great regularity, often disguised as "Does TA work or not.").

You found a great way to summarize and give an answer to the discussion, as it contains both the observation of trading critics (that most people lose money actively trading btc), while acknowledging that there is in fact a way to make a long-term profit trading for a rather small subset of traders.

So the real question remaining, that everyone has to ask him or herself, is: am I 'the house', or am I a gambler if I'm honest with myself

in any bitcoin deal i would have to say  your the gambler rather than " the house"

"the house  " is more likley to be the btc exchanges as in they have all the power once they have your money or your btc
or both

So according to you, there are no traders who consistently make a profit (in total, I mean). Only guys who get lucky once in a while.

I would disagree.

[1715291287]

1715291287

[CoinCidental]

of course ,some day traders make a profit on the volatility swings

but trusting a foreign exchange with all your money or btc isnnt wise in my opionion

even gox  closed last week for  a hour in a very volatile period and cryptsy goes on and offline regularly
with transcations sometimes not even showing up and trades not being executed even though there is a buyer
and a seller at the same price

btc-e have been accused in multiple threads of  selective scamming larger accounts  and another exchange as well has just been accused of similar

also the exchanges themselves lack liquidity and if theyve been taking risks with your coin youl likely never know about it
until the fcuk up and  its bankrupty time

also the hassle of having accounts  frozen and taking months to recover funds  if at all is a major worry or governments
and banks suspending accounts and trading licences

if you think you have a stronger advantage than the house ,by all means ,go for it

[cAPSLOCK]

At this time I have a question for our trusty OP.

Why didn't you buy?

[bitcool]

At this time I have a question for our trusty OP.

Why didn't you buy?

Because for bitcoin's popularity to grow, somebody has to sell.  Thank you for selling OP, we appreciate your coins     

[piramida]

Yeah, it was quite obvious once no news has been published in 24hrs that bitcoin would shoot back up so op, why didn't you buy?

1- You thought the price will go back uplower and so got hold of your Bitcoins cash --> Very bad decision
2- You couldn't sellbuy them due to the lack of buyersmoney --> Plausible but unlikely
3- You are emotionally attached to your Bitcoinsfiat so you don't want to lose them no matter what --> You need a psychologist
4- When you found out about it, it was already too lateyou were busy publishing stupid topics on Speculation subforum --> I forgive you

[JayB]

At this time I have a question for our trusty OP.

Why didn't you buy?

I answered this question before. But I'll answer it once again giving more details this time.

1- I can't buy an amount that makes me excited enough to follow its news and be actively trading it. Sure I can spend around 1,000$ buying Bitcoins today, but with today's rates this will only buy me 1 Bitcoin. Is it worth the hassle? in my opinion I'm better of spending my time doing freelance work or finding a good job as the returns I can be making then would be, with a high degree of certainty (at least from my POV) higher than actively trading 1 Bitcoin (or 2 or 3 as a matter of fact).

2- It's hard for me to buy or acquire Bitcoins in the country I live in. As a matter of fact I come from the same country Nassim Taleb comes from and that is Lebanon. If you know Lebanon you'd know how corrupt it is and you'd know the hassle you'd go through if you wanted to buy Bitcoins here.
   a) Fewer then 0.01% of the population here heard of Bitcoin and much less than that own Bitcoins.
   b) If I decided to make a bank transfer and buy it from the open market it would probably be a bigger hassle.
   c) Mining Bitcoins nowadays is out of the question. I'd be better off buying it directly, which is a problem all by itself.

Now you can argue that my first concern is not valid since a Bitcoin can reach a value of 100K or 1 million $ and that this would make it economically attractive for me to even own 1 Bitcoin today (knowing its future value and the gain I can be making over time). I'm sorry to say that I think this is all wishful thinking.

Sure from an economic POV if the total number of Bitcoins to be ever made are limited to 21 million units, then it's easy to imagine that couple of years down the line when its enough spread over the world the market cap of Bitcoins would easily reach 10 - 11 trillion dollars, making each Bitcoin worth 500K dollars (equilibrium when demand = supply). But I don't see this happening for a couple of reasons:

1- If competition enters the market (and it surely started to), and if cryptocurrency always existed couple of years from now (big IF), then the number of total cryptocurrencies in circulation will be much more than 21 million units. So even if total value of those become a couple trillion dollars (to satisfy total market demand), it will be spread over a much wider number of units and so the value of an average unit will be much lower than 500K $. You can tell me here that only few cryptocurrencies will survive as time goes by, but even if that's the case I don't see why those can't be 40 or 50 cryptocurrencies surviving with total units in the market surpassing 1 trillion units. Current market dynamics suggest that it's becoming easier to accept and trade all types of cryptocurrencies, and the survival chance of a big number of them in such conditions i see can be quiet high.

2- If Bitcoin survived, looking at the different parties getting negatively affected by the rise of cryptocurrencies it's easy to see in how many direction it might experience resistance. Be it governments, or be it banks, or be it any type of business that is threatened by it. The pressure that might be exerted on it might make it less attractive to own cryptocurrencies and as a result make it go down in value.

3- Another way current cryptocurrencies may fail is due to all sort of issues innate to them that may not have come to the surface so far. This could be technical problems, economical problems, social problems and god knows what else. As far as I know it's a big experiment and the survival or in this case the death of it will only be proven with the passage of time. I just believe risks are still too high for it to still make a super-high return and survive.

One argument I once had with a user here was about the risk/return of getting into Bitcoins now vs. a couple of months ago and my point was that it would've made much more sense to get into it when the price was relatively low (i.e. 10$ or so) than to get into it today. Today might be less risky, but the risk/return ratio would've still made much more sense back then (I can give you my full analysis regarding that if any of you is interested). I only knwe about Bitcoin once its value surpassed 700$ a unit...

I personally believe it's a bit late for me to get into the game for the sake of making a profit out of it. Sure I might someday acquire some for its ease of use and all the other factors that makes it attractive due to its properties. But to make a super-normal profits out of it, I think this could've only be done couple of months ago when the price of each unit was below a certain value (that's my personal opinion, and the reason why I'm a bit reluctant to get into it now). I might certainly be wrong, only time will tell.

Now if your question was "why didn't you try to benefit from those swings that happened right after the Chinese government's announcement", I'll tell you that it's because I didn't have Bitcoins back then and I couldn't have bought it and made the trade all in a timely manner to take advantage of it.

I'll be happy to hear counter-arguments "that make sense" instead of just talking nonsense. Please back up your counter-arguments with strong analysis.

[sgbett]

Me again!

How convinced are you btc will fail? How can you be sure?

If there is a nonzero chance if something happening then it is possible for you to figure out ev (which you can adjust to fit your bias)

I'm not sure what set of circumstances gives you an outcome where the best (most rational) action us not to buy any btc? How do you come to the conclusion that there is zero risk holding no btc?

[ashaw596]

I didn't sell because I've long given up on short term trading.

[Chalkbot]

Sure from an economic POV if the total number of Bitcoins to be ever made are limited to 21 million units, then it's easy to imagine that couple of years down the line when its enough spread over the world the market cap of Bitcoins would easily reach 10 - 11 trillion dollars, making each Bitcoin worth 500K dollars (equilibrium when demand = supply). But I don't see this happening for a couple of reasons:

1- If competition enters the market (and it surely started to), and if cryptocurrency always existed couple of years from now (big IF), then the number of total cryptocurrencies in circulation will be much more than 21 million units. So even if total value of those become a couple trillion dollars (to satisfy total market demand), it will be spread over a much wider number of units and so the value of an average unit will be much lower than 500K $.

So you think there's a good chance that a bitcoin will be worth somewhere between $1000 (current value) and $500,000 in the future (that being the best case where it's the dominant cryptocurrency), and you can't justify investing $10 because of the "risk"?


Interesting thought process. For me personally, assuming I thought bitcoin had a 99% chance of total failure (i.e. crash to 0), this would still be a worthwhile investment. $10 is not a significant sum of money for me, and if the potential upside (by my own estimation) was 50,000% gains, it seems like a no-brainer. If they sold lottery tickets with those odds, I'd quit my job.

[JayB]

Me again!

How convinced are you btc will fail? How can you be sure?

If there is a nonzero chance if something happening then it is possible for you to figure out ev (which you can adjust to fit your bias)

I'm not sure what set of circumstances gives you an outcome where the best (most rational) action us not to buy any btc? How do you come to the conclusion that there is zero risk holding no btc?

I never said I'm certain Btc will fail (although it might).

But the conclusion of my argument would be something along these lines: There's less risk of not owning any Bitcoin, then to do, when the price of each Btc is close to 1,000$. Given all the reasons I have mentioned. Actually this statement might not be true for me at all time. But it's true for me today.

Also might not have been the case when the price was 10 or 20$ a piece.

Problem is that if the price now goes back down to 10 or 20$ a Bitcoin, it might not be as attractive an investment as when it first happened (on its way up, couple of months ago). Again there's a full analysis as to why this might be the case (in my own POV, not based on any economic theory but based on my own analysis).

Sure from an economic POV if the total number of Bitcoins to be ever made are limited to 21 million units, then it's easy to imagine that couple of years down the line when its enough spread over the world the market cap of Bitcoins would easily reach 10 - 11 trillion dollars, making each Bitcoin worth 500K dollars (equilibrium when demand = supply). But I don't see this happening for a couple of reasons:

1- If competition enters the market (and it surely started to), and if cryptocurrency always existed couple of years from now (big IF), then the number of total cryptocurrencies in circulation will be much more than 21 million units. So even if total value of those become a couple trillion dollars (to satisfy total market demand), it will be spread over a much wider number of units and so the value of an average unit will be much lower than 500K $.

So you think there's a good chance that a bitcoin will be worth somewhere between $1000 (current value) and $500,000 in the future (that being the best case where it's the dominant cryptocurrency), and you can't justify investing $10 because of the "risk"?


Interesting thought process. For me personally, assuming I thought bitcoin had a 99% chance of total failure (i.e. crash to 0), this would still be a worthwhile investment. $10 is not a significant sum of money for me, and if the potential upside (by my own estimation) was 50,000% gains, it seems like a no-brainer. If they sold lottery tickets with those odds, I'd quit my job.

No I never said it might be anywhere between 1 and 500K...but rather 0 and 500K.

And if you look at it from a probability distribution POV, I'd say much higher probability for it to be between 0 and 1K than for it to be between 1K and 500K.

That's my point. In my head, the probability distribution of it's future value would give a present value lower than it's current value + transaction costs + opportunity costs...I got a bit technical, if you need more explanation lemi know

[CoinCidental]

Me again!

How convinced are you btc will fail? How can you be sure?

If there is a nonzero chance if something happening then it is possible for you to figure out ev (which you can adjust to fit your bias)

I'm not sure what set of circumstances gives you an outcome where the best (most rational) action us not to buy any btc? How do you come to the conclusion that there is zero risk holding no btc?

I never said I'm certain Btc will fail (although it might).

But the conclusion of my argument would be something along these lines: There's less risk of not owning any Bitcoin, then to do, when the price of each Btc is close to 1,000$. Given all the reasons I have mentioned. Actually this statement might not be true for me at all time. But it's true for me today.

Also might not have been the case when the price was 10 or 20$ a piece.

Problem is that if the price now goes back down to 10 or 20$ a Bitcoin, it might not be as attractive an investment as when it first happened (on its way up, couple of months ago). Again there's a full analysis as to why this might be the case (in my own POV, not based on any economic theory but based on my own analysis).

theres more risk in holding $1000 than buying a bitcoin with it imo

[Tirapon]

JayB

You could trade BTC as a local dealer in your spare time. You would need to figure out how to make a bank transfer to an exchange. Once you are set up to do this however, you can make a commission by selling to people. Sounds like your country could do with some local traders.

You could keep the profits in BTC, then you don't have to invest anything. You can build up a small amount of coins and hold onto them long term.

With regards to 'not seeing the point' at this stage:

I told many friends to buy BTC at $10 but they couldn't see the point.
I told them again at $100, but like you, they just couldn't see it going any higher.

If they had bought $100 worth of BTC at $10, it would now be worth nearly $10 000
If they had bought $100 worth of BTC at $100, it would now be worth nearly $1 000.

[JayB]

JayB

You could trade BTC as a local dealer in your spare time. You would need to figure out how to make a bank transfer to an exchange. Once you are set up to do this however, you can make a commission by selling to people. Sounds like your country could do with some local traders.

You could keep the profits in BTC, then you don't have to invest anything. You can build up a small amount of coins and hold onto them long term.

With regards to 'not seeing the point' at this stage:

I told many friends to buy BTC at $10 but they couldn't see the point.
I told them again at $100, but like you, they just couldn't see it going any higher.

If they had bought $100 worth of BTC at $10, it would now be worth nearly $10 000
If they had bought $100 worth of BTC at $100, it would now be worth nearly $1 000.

Regarding your first point:

I don't see demand in this country and I don't think there will be demand for btc anytime soon.

Lebanon is a country who's population is a bit conservative when it comes to technology and innovation. We still have slow internet speeds, e-commerce is nearly non-existent here, few are the people who have credit cards to pay with, we don't even have proper home addresses...you get the idea

There's definitely no demand for btc here. For demand to build up the whole ecosystem must be ready for such a thing. If I go today to some store and offer to pay in Bitcoins he'll laugh at me; he might even threaten to punch me in the face thinking I'm making fun of him. It's hard for this to take off here.

Now probably very very few people here have Bitcoin (I personally haven't seen any...but well if you never saw a black swan doesn't mean it's non-existent :p) but early adopters are there in every corner of the world, but they are a tiny percentage of total population. The difficult part is to cross the chasm and make innovations be accepted by the masses, which I don't see happening here because of an ecosystem paralysis.

regarding your second point:

I agree. As I said I might be wrong...who knows.

[piramida]

1- I can't buy an amount that makes me excited enough to follow its news and be actively trading it. Sure I can spend around 1,000$ buying Bitcoins today, but with today's rates this will only buy me 1 Bitcoin. Is it worth the hassle? in my opinion I'm better of spending my time doing freelance work or finding a good job as the returns I can be making then would be, with a high degree of certainty (at least from my POV) higher than actively trading 1 Bitcoin (or 2 or 3 as a matter of fact).

Crappy excuse of "no money", I see. If you are such an awesome trader (in your head, anyway) you should be able to turn that 1BTC into 10BTC quickly and then it'll be appealing! Oh well anyway I'm out of this thread; continue to make excuses to be poor.

[zby]

Bitcoin always gives you a second chance

[cAPSLOCK]

Being upset that 1k will buy you only 1 bitcoin reveals at least two large misunderstandings on your part.

First of all is the psychological aspect of buying an expensive unit of investment.  You think its so expensive to buy one unit that its too late to get in.  I remember think something similar about Berkshire Hathaway in the 90s when it was about 8000$ a share if I remember right.

https://www.google.com/finance?q=NYSE:BRK.A&sa=X&ei=CSOoUoPMJoPj2AWf8YGAAg&ved=0CC0Q2AEwAA

Secondly you misunderstand a fundamental advantage of Bitcoin.  Buffet may never have wanted to split BRK.A, but bitcoin has splits built in.  *IF* we sustain levels between $500 and $1000 then we will continue to the the Mbit (millibit) become the favoured denomination of btc.its already happening.  "One bitcoin" is a somewhat artificial construct.  As is 1000 mBTCs.

One last thing. I am capable of spelling out in a semi intelligent way the reasoning behind my thought processes with BTC.  But you have to understand it has not seemed worth it to me.  

I will explain why.

You started this thread with an overbearing tone.  You sounded judgemental and arrogant.  You came off as a know it all. Called some dumb, stupid, or insane.  And constantly waved around a 'degree in finance from a respected school'.  Your tone has changed somewhat.. But you still obviously have judged most here in a negative light.

To be honest this is one of several ignorant positions on display from you in this thread.

You would be better off assuming there are some here who know more than you.  I can guarantee you you have spoken to successful professional traders and folks who are highly educated.

As has been mentioned you essentially suggest we should time the market, and you were sure btc would go down at a specific time.  You may have been right about that.  But your insistence on this display of hindsight is an old pattern most of us here recognize.  Its a noob investor mistake.

Another one...  Feeling like its too late to get in btc for the price.  "Not interesting to have only 1 coin to trade". Noob error.

I just don't buy that'd its too hard to buy btc in Lebanon.  If you can use the net you can find a way.

You have a donation address and ad in your SIG.  You obviously want btc.

Youre upset some of us have not taken the time to make good arguments.  Why should we?  You came in here guns blazing.  And seem ignorant to some simple concepts. (Hindsight is 20\20 and timing the market is folly for all but the best)

Its like trying to explain to a blind man that I am not a fool to believe in color.

[JayB]

Being upset that 1k will buy you only 1 bitcoin reveals at least two large misunderstandings on your part.

First of all is the psychological aspect of buying an expensive unit of investment.  You think its so expensive to buy one unit that its too late to get in.  I remember think something similar about Berkshire Hathaway in the 90s when it was about 8000$ a share if I remember right.

https://www.google.com/finance?q=NYSE:BRK.A&sa=X&ei=CSOoUoPMJoPj2AWf8YGAAg&ved=0CC0Q2AEwAA

Secondly you misunderstand a fundamental advantage of Bitcoin.  Buffet may never have wanted to split BRK.A, but bitcoin has splits built in.  *IF* we sustain levels between $500 and $1000 then we will continue to the the Mbit (millibit) become the favoured denomination of btc.its already happening.  "One bitcoin" is a somewhat artificial construct.  As is 1000 mBTCs.

One last thing. I am capable of spelling out in a semi intelligent way the reasoning behind my thought processes with BTC.  But you have to understand it has not seemed worth it to me.  

I will explain why.

You started this thread with an overbearing tone.  You sounded judgemental and arrogant.  You came off as a know it all. Called some dumb, stupid, or insane.  And constantly waved around a 'degree in finance from a respected school'.  Your tone has changed somewhat.. But you still obviously have judged most here in a negative light.

To be honest this is one of several ignorant positions on display from you in this thread.

You would be better off assuming there are some here who know more than you.  I can guarantee you you have spoken to successful professional traders and folks who are highly educated.

As has been mentioned you essentially suggest we should time the market, and you were sure btc would go down at a specific time.  You may have been right about that.  But your insistence on this display of hindsight is an old pattern most of us here recognize.  Its a noob investor mistake.

Another one...  Feeling like its too late to get in btc for the price.  "Not interesting to have only 1 coin to trade". Noob error.

I just don't buy that'd its too hard to buy btc in Lebanon.  If you can use the net you can find a way.

You have a donation address and ad in your SIG.  You obviously want btc.

Youre upset some of us have not taken the time to make good arguments.  Why should we?  You came in here guns blazing.  And seem ignorant to some simple concepts. (Hindsight is 20\20 and timing the market is folly for all but the best)

Its like trying to explain to a blind man that I am not a fool to believe in color.

Regarding your first point:

I know that very well, I'm not making any logical/psychological fallacy. The reason why I didn't say "1000$ worth of Bitcoins" instead was because 1000$ worth of Bitcoins would've been attractive to me when the price was still below 10$. It is now when the price is at 1000$ that it ceased becoming attractive to me. And it's not because of the psychological effect.

It's simply a Market cap analysis thing. My answer would've been the same if total Bitcoins to be produced are planned to be 2.1 billion units and each unit is at 10$ today. I would've said exactly the same thing...that it's unattractive for me to buy 100 btc today at 10$ each....It's that I don't see an attractive upside from this point onward (again...that's me and I can be wrong). In other words I believe it reached a point where, due to its current market cap, it will be gaining momentum (if any at all) at a much slower rate.

The reason why buying let's say 100K $ worth of btc would've been a different story is because the gains I could be making, even at a slow momentum, would've still been attractive to me today given my opportunity cost. A 10% gain on 1000$ is 100$ --> not attractive, but a 10% gain on 100K is 10K --> very attractive to me (over a certain time period). And both would require the same magnitude of effort from my side.


Regarding your second point:

I sometimes like to tackle things with an aggressive/arrogant attitude because it steers the discussion in an interesting way (to me at least) on many different levels (being it studying social dynamics behavior, or the fact that you'd be making more effort to prove me wrong etc...). sgbett at one point mentioned it's hard to predict human behaviors, but my experience tell me otherwise. I agree it's hard to know all the factors affecting human behavior, but at any point in time there are only 1 or 2 factors responsible for 95% of the outcome of human decision (my own version of the Pareto principle). When you're confronted with someone who is threatening your ego/position/belief it blinds you from all other factors affecting your decision making at the point of the confrontation and it makes you willing to put more effort in dealing with the issue.

Regarding experienced traders:
 
Being an experienced trader in certain areas doesn't make you experienced in all areas. Btc market is a new market and the laws affecting its value are very different than the laws affecting, lets say the value of a USD or the stock of Microsoft.

[jeppe]

4, had my exams this and last week.  So havent had time for BTC ;( ........... could have made a lot of bitcoins, but my exams are more important than some bitcoins

[oyeTorry]

I told many friends to buy BTC at $10 but they couldn't see the point.
I told them again at $100, but like you, they just couldn't see it going any higher.

If they had bought $100 worth of BTC at $10, it would now be worth nearly $10 000
If they had bought $100 worth of BTC at $100, it would now be worth nearly $1 000.

Do you tell your friends to buy now  ? 

[JayB]

So did you guys sell this time?