rpietila Wall Observer - the Quality TA Thread ;)

[conspirosphere.tk]

Anybody who puts in 50% up front has an incredible appetite for risk and is probably a heavy gambler.

yes, like any other asset were so safer.
ppl still believing that they 'own' their home or their bank account or gold or anything else in the western world are in for a surprise.
then they may find that bitcoins were mostly an insurance against what is coming.

http://www.telegraph.co.uk/finance/personalfinance/10819885/David-Cameron-Taxes-will-rise-unless-we-can-raid-bank-accounts.html

[MahaRamana]

But if you are moderately invested (<50% of total assets), and want to buy more, this is a good time.

this raises the interesting question of the optimal % of total net worth to invest in BTC.
I believe this is a much more important question than determining exactly when to buy. Yet most of the discussion goes in timing, not wealth allocation.

Of course it is a question that each person has to reply for himself depending on his circumstances. But most people lack the framework that would help them to make a rational decision based on their investment profile.

It is useful to help people assess the value of bitcoin against the trendline to optimise timing. But it would be even more useful if we could help people understand for themselves how much BTC they should own relative to their wealth.

I am saying this because I am asking this question for myself. When I see the terms "moderately invested" for a BTC position of less than 50%, I am a bit jumping on my chair. Do you really believe that someone entering today and taking a position of 33-49% of his total assets would be only moderately invested ? I see it as very heavily invested.

If you saw BTC rise 100X or more while holding it, and BTC went from being 5% of your assets to 90% and you diversify away from BTC, it feels like getting down to "only" 50% BTC is a moderate position. But when you initially enter BTC, it is a very different thing.

Take someone who has for exemple 1 million USD in total assets and 100K yearly income. He has a house valued 600K fully paid. He has a car valued 40K. He has precious metals for 150K. He has other real-estate investments for 100K. He has liquid investments and cash for 110K.

What you are basically saying is that the guy would have to sell everything he has including metals, and take a partial mortgage on his house, and put everything in BTC, to be more than moderately invested in BTC ? This sounds way too much, don't you think ? I mean, it's maybe more than a winning bet, but is it a reasonable, responsible one ?

My personal view is : 0-1% of net worth being a small position, 2-5% moderate, 6-10% big position, 11-25% very big, 26-50% huge position, 51+% extreme position.

I would be interested to hear what people here think is a good % of total assets to hold in BTC today.

This is a very reasonable view point. I have about 50% of my total assets in BTC, but I don't own much and when I originally started buying, I think I had put in about 5%. Anybody who puts in 50% up front has an incredible appetite for risk and is probably a heavy gambler. Yet, if you have a true understanding of how revolutionary this technology is, pitted against the archaic methods it will replace, coupled with the dominance of its first mover advantage that has secured an unsurpassable hashing power, consistently increasing investment in infrastructure, and the recent sidechain revelation, it almost seems foolish not to take an otherwise extreme position. I know I wish I had understood all of this better when I first started trading. You can bet I would have put in much more than 5% of my assets.

Thanks for your reply. What if you didn't invest back then and you understood all this today, looking at the past rise. Would you invest more than 5% ? Would you invest even 50% of a smaller total asset base ?

There is a lot of psychology in this. It's easy to hold a 50% total asset position if it became that much through the rise. Mostly because you have not "worked for" and gradually built your life around these 50%.

I am interested in the reasoning for a newcomer as I am one and there are many others who see the posts of Risto Pietila. Risto gave a great Bitcoin Savings Plan, but no help in determining how much should be put in. I read often : as much as you are able / willing to lose. This is a wise advise for the gambler, but not for the prudent investor : it does not say enough.

I guess multiple replies to this question would satisfy my appetite : "If you would never have invested in BTC yet and didn't experience the wealth increase provided by BTC, what % of your total assets would you consider your optimal position now ?"

I think a regular poll with this question presented to the more senior btc holders would be very interesting for newcomers.

[MahaRamana]

But if you are moderately invested (<50% of total assets), and want to buy more, this is a good time.

this raises the interesting question of the optimal % of total net worth to invest in BTC.
I believe this is a much more important question than determining exactly when to buy. Yet most of the discussion goes in timing, not wealth allocation.

Of course it is a question that each person has to reply for himself depending on his circumstances. But most people lack the framework that would help them to make a rational decision based on their investment profile.

It is useful to help people assess the value of bitcoin against the trendline to optimise timing. But it would be even more useful if we could help people understand for themselves how much BTC they should own relative to their wealth.

I am saying this because I am asking this question for myself. When I see the terms "moderately invested" for a BTC position of less than 50%, I am a bit jumping on my chair. Do you really believe that someone entering today and taking a position of 33-49% of his total assets would be only moderately invested ? I see it as very heavily invested.

If you saw BTC rise 100X or more while holding it, and BTC went from being 5% of your assets to 90% and you diversify away from BTC, it feels like getting down to "only" 50% BTC is a moderate position. But when you initially enter BTC, it is a very different thing.

Take someone who has for exemple 1 million USD in total assets and 100K yearly income. He has a house valued 600K fully paid. He has a car valued 40K. He has precious metals for 150K. He has other real-estate investments for 100K. He has liquid investments and cash for 110K.

What you are basically saying is that the guy would have to sell everything he has including metals, and take a partial mortgage on his house, and put everything in BTC, to be more than moderately invested in BTC ? This sounds way too much, don't you think ? I mean, it's maybe more than a winning bet, but is it a reasonable, responsible one ?

My personal view is : 0-1% of net worth being a small position, 2-5% moderate, 6-10% big position, 11-25% very big, 26-50% huge position, 51+% extreme position.

I would be interested to hear what people here think is a good % of total assets to hold in BTC today.

This is a very reasonable view point. I have about 50% of my total assets in BTC, but I don't own much and when I originally started buying, I think I had put in about 5%. Anybody who puts in 50% up front has an incredible appetite for risk and is probably a heavy gambler. Yet, if you have a true understanding of how revolutionary this technology is, pitted against the archaic methods it will replace, coupled with the dominance of its first mover advantage that has secured an unsurpassable hashing power, consistently increasing investment in infrastructure, and the recent sidechain revelation, it almost seems foolish not to take an otherwise extreme position. I know I wish I had understood all of this better when I first started trading. You can bet I would have put in much more than 5% of my assets.

MahaRamana I hope you start a new thread for this topic.  I suggest it does not belong here, but is an interesting topic to discuss.

I was aware it was out topic and we could move the discussion in a new post. But I introduced my questioning here because this is the only post I follow (don't have much time) and people here seem smarter than elsewhere. Ok let me move it.

[BitchicksHusband]

Well, here in the US, I don't expect any problems, but I guess we'll find out soon.  I mean, certainly I wouldn't be the first person to test Coinbase's $50,000 limit, right?  And since they have already done KYC, it shouldn't be a problem, should it?

i tried to take out 40k via coinbase in december and failed.  but the larger point is that even if coinbase does not fail, or you use local exchange, whatever, then trying to move the fiat thereafter is not necessarily going to work well.  you may be better off spending btc.

What was the nature of the failure?  Did your bank refuse the transaction?  If so, was it a big 5 bank (Wells, Chase, BofA, Citi, etc.) or a local bank, credit union, etc.? 

[Bitcopia]

Thanks for your reply. What if you didn't invest back then and you understood all this today, looking at the past rise. Would you invest more than 5% ? Would you invest even 50% of a smaller total asset base ?

There is a lot of psychology in this. It's easy to hold a 50% total asset position if it became that much through the rise. Mostly because you have not "worked for" and gradually built your life around these 50%.

I am interested in the reasoning for a newcomer as I am one and there are many others who see the posts of Risto Pietila. Risto gave a great Bitcoin Savings Plan, but no help in determining how much should be put in. I read often : as much as you are able / willing to lose. This is a wise advise for the gambler, but not for the prudent investor : it does not say enough.

I guess multiple replies to this question would satisfy my appetite : "If you would never have invested in BTC yet and didn't experience the wealth increase provided by BTC, what % of your total assets would you consider your optimal position now ?"

I think a regular poll with this question presented to the more senior btc holders would be very interesting for newcomers.

I would absolutely invest more than 5%. In fact, I have been and am continuing to increase my position further with money I've made through more traditional endeavors, such as stereotypical "work." It takes a long time to truly understand this protocol and it's market. I went in at a small position because one of my friends was so excited about it. If I had understood it like I do now, I would have gone 50% in with fresh capital.

To be clear, I would still go 50% in today with fresh capital. And to put my money where my mouth is, in the past month I have put in another 5% of my total wealth and will continue to do so over the next couple months before we see another leap in price.

However, this is a personal decision, and please don't take my words as investment advice, as I am not qualified to give it.

[BitchicksHusband]

And why in the world would any man want more than one woman!?  That is the question I have always had for polygamists!  

I must admit I am equally confused about why any one man wouldn't want more than one woman. Polygamy/polyamory seems very natural to me. Also it's very practical when running a household. Also polyamory is wrong. You shouldn't mix Greek and Latin like that. It should be multiamory or polyphilia  

People think that monogamy is the right way of doing things because they are blind naive folks who grew up among christians or other religious nuts who think monogamy is the right way of life. Polygamy is natural for us but keep telling to fools that monogamy is the right way and that polygamy is evil and you will go to hell and all sorts of bad things will happen to you there.  Repeat this 500 times and it becomes "truth".

Repeat 500 times:
Evil middle east terrorists did 9/11 because YOLO
Iraq REALLY HAD weapons of mass destruction, our invasion was therefore legal.
Russians eat children, Ukraine nazi unelected government are the good guys.
USA government are the good guys.
Monogamy is natural, polygamy is for mentally ill people, terrorists and russians.
If you eat your vegetables, you will get an icecream later.
God is real because this piece of paper says so.
Flying spaghetti monster god with meatballs is not real because my piece of paper doesnt mention it.
Assad really used chemicals on civilians, our videos are not staged.
We really dont know where flight M370 crashed, honest.
Russians have secret underground bases below Washington, for sure.
We are not spying on anybody.




Some long living parrot species and budgies are monogamous tho....

Way offtopic, but wouldn't fairness and common decency say that in a society with nearly 50% male and 50% female, everyone should have one spouse.  But in a society where 75% of the men are killed in battle, that a 1:3 or 1:4 ratio starts to make sense?

[ErisDiscordia]

Way offtopic, but wouldn't fairness and common decency say that in a society with nearly 50% male and 50% female, everyone should have one spouse.  But in a society where 75% of the men are killed in battle, that a 1:3 or 1:4 ratio starts to make sense?

It doesn't just have to be one man + several women. Could be one woman with several men, several men with several women etc. Also it doesn't have to be "forever" but temporary. Read Heinlein's "Time enough for Love" for a good elaboration on how such a society might work and why it might be desirable.

I'll just leave one thought here and stop hijacking this thread:

Right now many people think because the male/female ratio is approximately 50/50, that most people can get a partner. And once they get them, many succumb to the illusion that now they "have" them for the rest of their lives and often try to seal this illusion with silly things like marriage. This in turn gives them license to feel like they are being owed a partner by society which often results in a their lack of effort to actually try and be a good and desirable partner. In a society where romantic relationships are multiamorous a temporary the threat of your partner leaving you or yourself not being even able to get a partner at all will presumably put enormous pressure on people to actually try and be partners worth having. And let me tell you it would be hard to convince me that that's a bad thing Most monogamous relationships seem to be based on fear, insecurity and ego-driven possessiveness, whereas I'm personally much more interested in love and freedom. But I do acknowledge that my views on this matter are even more unpopular than my views on the state & the government so I'll just leave it at that

[kireinaha]

folks, can we please move this polygomastic shit elsewhere please? perhaps the off topic board? cluttering up the thread.

[rpietila]

What you are basically saying is that the guy would have to sell everything he has including metals, and take a partial mortgage on his house, and put everything in BTC, to be more than moderately invested in BTC ? This sounds way too much, don't you think ? I mean, it's maybe more than a winning bet, but is it a reasonable, responsible one ?

My personal view is : 0-1% of net worth being a small position, 2-5% moderate, 6-10% big position, 11-25% very big, 26-50% huge position, 51+% extreme position.

Assets can be classified in many ways but I would try:

- land/RE
- PMs
- businesses (that you run)
- paper investments (cash, stocks, bonds, funds, all that is correlated to fiat liquidity)
- cryptos.

I know many people that, due to mortgage, are more than 100% (in fact, often 1000% or even negative % because of negative net worth) invested in RE. No doubt RE is a good investment but not so good that you should take insane leverage. The long-term return is more like 2-5% depending on many things.

Lots of people don't have anything else but paper investments, in other words they haven't diversified at all and are 100% at the mercy of the liquidity masters. When liquidity was withdrawn from the market in late 2008, all these tanked 50-100%. They are very risky, and there is comparatively little upside.

With PM's and cryptos you cannot fail so badly as the risk of going to zero is rather small, and sane people realize that they don't need leverage because the upside is very good anyway if they hit big. Now, gold's upside is maximum 10x from now, silver's 100x and (to keep the similar probability) bitcoin's is 10,000x.

There is a claim that high volatility equals high risk, but that is fallacious. Bitcoin's volatility is so high that for every 2-year period you have always netted at least 200%. There is no security in the history of capital markets that has always shown a positive 2-year return. Therefore all the other assets have historically been of higher risk than Bitcoin (and not only lower return).

=> The upside with Bitcoin is so great and the risks so small that the only reasons to own anything at all besides them are:

* if you need the other thing
* for hedging against Bitcoin's catastrophic failure
* for short-term capital needs (because of Bitcoin's volatility).

[Biodom]

What you are basically saying is that the guy would have to sell everything he has including metals, and take a partial mortgage on his house, and put everything in BTC, to be more than moderately invested in BTC ? This sounds way too much, don't you think ? I mean, it's maybe more than a winning bet, but is it a reasonable, responsible one ?

My personal view is : 0-1% of net worth being a small position, 2-5% moderate, 6-10% big position, 11-25% very big, 26-50% huge position, 51+% extreme position.

Assets can be classified in many ways but I would try:

- land/RE
- PMs
- businesses (that you run)
- paper investments (cash, stocks, bonds, funds, all that is correlated to fiat liquidity)
- cryptos.

I know many people that, due to mortgage, are more than 100% (in fact, often 1000% or even negative % because of negative net worth) invested in RE. No doubt RE is a good investment but not so good that you should take insane leverage. The long-term return is more like 2-5% depending on many things.

Lots of people don't have anything else but paper investments, in other words they haven't diversified at all and are 100% at the mercy of the liquidity masters. When liquidity was withdrawn from the market in late 2008, all these tanked 50-100%. They are very risky, and there is comparatively little upside.

With PM's and cryptos you cannot fail so badly as the risk of going to zero is rather small, and sane people realize that they don't need leverage because the upside is very good anyway if they hit big. Now, gold's upside is maximum 10x from now, silver's 100x and (to keep the similar probability) bitcoin's is 10,000x.

There is a claim that high volatility equals high risk, but that is fallacious. Bitcoin's volatility is so high that for every 2-year period you have always netted at least 200%. There is no security in the history of capital markets that has always shown a positive 2-year return. Therefore all the other assets have historically been of higher risk than Bitcoin (and not only lower return).

=> The upside with Bitcoin is so great and the risks so small that the only reasons to own anything at all besides them are:

* if you need the other thing
* for hedging against Bitcoin's catastrophic failure
* for short-term capital needs (because of Bitcoin's volatility).

hmmm...out of these three, what category your castle belongs to?  

Seriously, though, I intend to short bitcoin via puts in my "regular" accounts when I shall consider that it peaked (short term).
I intend to do this just as a hedge against my long core position in BTC.
Winlevoss ETF will be quite handy for this purpose, hopefully.

[pinksheep]

[/quote]


With PM's and cryptos you cannot fail so badly as the risk of going to zero is rather small, and sane people realize that they don't need leverage because the upside is very good anyway if they hit big. Now, gold's upside is maximum 10x from now, silver's 100x and (to keep the similar probability) bitcoin's is 10,000x.


[/quote]

You really think that BTC can increase x 10,000 times from here?

[bucktotal]

You really think that BTC can increase x 10,000 times from here?

omm nomm nommmm

[hdbuck]

You really think that BTC can increase x 10,000 times from here?

omm nomm nommmm

+1 on that lovely graph
thx for sharing.



OooMmmm NnooOooMmmmm NoooOoOoomMMMmm

[pinksheep]

[/quote]

You really think that BTC can increase x 10,000 times from here?
[/quote]

Firstly, I don't think it will ever go anywhere even remotely close to that, but even if it does, I'll be out a LONG time before that

[aminorex]

Well, here in the US, I don't expect any problems, but I guess we'll find out soon.  I mean, certainly I wouldn't be the first person to test Coinbase's $50,000 limit, right?  And since they have already done KYC, it shouldn't be a problem, should it?

i tried to take out 40k via coinbase in december and failed.  but the larger point is that even if coinbase does not fail, or you use local exchange, whatever, then trying to move the fiat thereafter is not necessarily going to work well.  you may be better off spending btc.

What was the nature of the failure?  Did your bank refuse the transaction?  If so, was it a big 5 bank (Wells, Chase, BofA, Citi, etc.) or a local bank, credit union, etc.? 

Unclear.  Money never showed up.  Coinbase was unable/unwilling to speak to non-merchant clients on the phone.  Email was queued unanswered for a week before I finally called the merchant support number, got an overworked harried and apologetic gentleman who said the transfer would be cancelled.  By then it had lost much of its value, so I didn't try selling any more, started accumulating again.

[BitchicksHusband]

Well, here in the US, I don't expect any problems, but I guess we'll find out soon.  I mean, certainly I wouldn't be the first person to test Coinbase's $50,000 limit, right?  And since they have already done KYC, it shouldn't be a problem, should it?

i tried to take out 40k via coinbase in december and failed.  but the larger point is that even if coinbase does not fail, or you use local exchange, whatever, then trying to move the fiat thereafter is not necessarily going to work well.  you may be better off spending btc.

What was the nature of the failure?  Did your bank refuse the transaction?  If so, was it a big 5 bank (Wells, Chase, BofA, Citi, etc.) or a local bank, credit union, etc.? 

Unclear.  Money never showed up.  Coinbase was unable/unwilling to speak to non-merchant clients on the phone.  Email was queued unanswered for a week before I finally called the merchant support number, got an overworked harried and apologetic gentleman who said the transfer would be cancelled.  By then it had lost much of its value, so I didn't try selling any more, started accumulating again.

Was it a big 5 bank?  I know that BofA in particular pretty much cancels any bitcoin transaction that they notice.

[aminorex]

Was it a big 5 bank?  I know that BofA in particular pretty much cancels any bitcoin transaction that they notice.

No, it was a local bank.

[Torque]

Well, here in the US, I don't expect any problems, but I guess we'll find out soon.  I mean, certainly I wouldn't be the first person to test Coinbase's $50,000 limit, right?  And since they have already done KYC, it shouldn't be a problem, should it?

i tried to take out 40k via coinbase in december and failed.  but the larger point is that even if coinbase does not fail, or you use local exchange, whatever, then trying to move the fiat thereafter is not necessarily going to work well.  you may be better off spending btc.

What was the nature of the failure?  Did your bank refuse the transaction?  If so, was it a big 5 bank (Wells, Chase, BofA, Citi, etc.) or a local bank, credit union, etc.?  

Unclear.  Money never showed up.  Coinbase was unable/unwilling to speak to non-merchant clients on the phone.  Email was queued unanswered for a week before I finally called the merchant support number, got an overworked harried and apologetic gentleman who said the transfer would be cancelled.  By then it had lost much of its value, so I didn't try selling any more, started accumulating again.

Was it a big 5 bank?  I know that BofA in particular pretty much cancels any bitcoin transaction that they notice.

And Chase, from what I've heard and read, they apparently hate bitcoin too.  My fiancee had a VERY bad experience with Chase once.  Stay. Very. Far. Away.

[BTCtrader71]

Was it a big 5 bank?  I know that BofA in particular pretty much cancels any bitcoin transaction that they notice.

I have my BoA account linked to Coinbase and for the most part, transactions go through. When I started out, I only did small transactions that went through without a problem. I did have several (still small) bitcoin purchases that were reversed when it came time for the transaction to clear a week or so after initiation, with no explanation other than "suspicious transaction." I sent an email pointing out that the price of bitcoin had risen during that week and it sure looked suspicious to me that they would allow one of my former purchases when the price remained stable, but then cancel this one when the price had risen. I wasn't nasty in the email, and I don't think that's what they were actually doing (then again, who knows?). They pretty quickly reversed the reversal and allowed the transaction to go through. That happened maybe 3 or 4 times last summer but since then I've had no problem.

Keep in mind that anything more than $10k per day is the magic cutoff that means you might be a drug dealer. For coinbase, I generally stay below that limit. 

[BitchicksHusband]

Was it a big 5 bank?  I know that BofA in particular pretty much cancels any bitcoin transaction that they notice.

I have my BoA account linked to Coinbase and for the most part, transactions go through. When I started out, I only did small transactions that went through without a problem. I did have several (still small) bitcoin purchases that were reversed when it came time for the transaction to clear a week or so after initiation, with no explanation other than "suspicious transaction." I sent an email pointing out that the price of bitcoin had risen during that week and it sure looked suspicious to me that they would allow one of my former purchases when the price remained stable, but then cancel this one when the price had risen. I wasn't nasty in the email, and I don't think that's what they were actually doing (then again, who knows?). They pretty quickly reversed the reversal and allowed the transaction to go through. That happened maybe 3 or 4 times last summer but since then I've had no problem.

Keep in mind that anything more than $10k per day is the magic cutoff that means you might be a drug dealer. For coinbase, I generally stay below that limit. 

I'm not worried about that.  I have nothing to hide.  They can see that I bought and sold bitcoin.  I have receipts for everything for exactly this situation.