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Author Topic: Assumption "bulls are stupid"  (Read 1403 times)
Vandroiy
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November 22, 2011, 01:01:45 PM
 #1

Bullish high-risk statements have been facing an abundance of insults lately. Please allow me to take a stance on their behalf.

About myself: I believe in Bitcoin, like its ideology in general, and speculate with an optimistic opinion. That does not mean I believe Bitcoin cannot fail. I believe that if Bitcoin succeeds, it has absolutely massive potential. To account for this stark asymmetry, I use the Kelly Criterion (http://en.wikipedia.org/wiki/Kelly_criterion) and conservative estimates on success probability, and thus strictly limit my buying. Still, I feel included into a "blind bull" group, which people assume to consist of complete idiots who do not know the meaning of an underlying economy. May I please quote my first speculative statement on this forum, which was in April?


I have developed a certain fear of prices that de-couple from the actual market size.

Implying that I do not know of this problem is so idiotic, it should be embarrassing! Another two quotes from the same first post, both arguments that don't exactly match the "stupid bull" image:


(...) the kind of thinking applied might be a problem for all of BitCoin at this moment: overconfident BTC owners, showing no fear of creating a bubble, meeting skeptical demand and low trade volumes.

(...) overconfidence has brought many crises in the history of economy, and it might be worth to avoid notions down that path.

Hey, "I was so right" guys, imagine predicting the rise, and peak, and drop back down to 2~5. That's roughly what I managed. Had I used a large buy-in, I would be rich now. Would you think yourself super smart in my position? I ask because I do not. believe I was lucky and only had a few correct thoughts to help. But the attitude I see on the speculation board these days: complimenting oneself for predicting a single trend to not break. It's called being too full of yourself.

I may lose my current bet. All of it. I know that. I would not take a 50-50 bet on Bitcoin prices rising now, and that was never the essence of it. Questioning my decision is also okay, go ahead and tear me apart with superior logic or experience. However, flaming on the level of today's 4chan is not okay. Don't make me start pointing out how "someone manipulated", "a sucker", "a libertarian blowhead", "a fool" or whatever I am today compares to the people using these expressions. Display of blatant stupidity is often mixed in with the insulting of others, and neither is adding to the reputation of this forum. While I enjoy a clash of words from time to time, everyone should dislike continued drowning of discussions with bad manners.


End of rant.
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November 22, 2011, 02:37:57 PM
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I approve of this message.

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November 22, 2011, 02:41:55 PM
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It gets the mjcmurfy stamp of approval too.

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November 22, 2011, 06:59:29 PM
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I also agree with the message, but find it pointless and counterproductive.

There is often a great utility in having people think you are a retard, and one can often achieve one's goals more effectively when that is the majority perception.  Look at G. W. Bush for instance.

BTW, my very favorite term is 'bag holder'.  This is in part because it has a very literal meaning in some of my other long-shot speculative adventures I suppose.


Jonathan Ryan Owens
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November 22, 2011, 08:08:42 PM
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OKAY.

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November 22, 2011, 08:16:00 PM
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How much have you lost if you had to cash out at current price?
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November 22, 2011, 08:54:05 PM
 #7

Am I supposed to brag now with profits I made from shorting?  Huh

First they ignore you, then they laugh at you, then they keep laughing, then they start choking on their laughter, and then they go and catch their breath. Then they start laughing even more.
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November 22, 2011, 09:16:56 PM
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Am I supposed to brag now with profits I made from shorting?  Huh

I would if I had done so.

To the other poster, I personally am down in the neighborhood of 50% of my outlay or probably somewhat more, but I've not done the calcs for a while.  I'm surprised it is not much more, but since I was doubling down on the dips, I guess it worked out that way.

I have a vastly larger percent of one day's BTC supply 'in the bag' than I ever imagined I would however.  As always, I am prepared for the bag to be valueless in the end.


Jonathan Ryan Owens
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November 22, 2011, 09:18:57 PM
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Am I supposed to brag now with profits I made from shorting?  Huh

I would if I had done so.

To the other poster, I personally am down in the neighborhood of 50% of my outlay or probably somewhat more, but I've not done the calcs for a while.  I'm surprised it is not much more, but since I was doubling down on the dips, I guess it worked out that way.

I have a vastly larger percent of one day's BTC supply 'in the bag' than I ever imagined I would however.  As always, I am prepared for the bag to be valueless in the end.



Did you decide not to because you think it's against the spirit of Bitcoin to go short?

tvbcof
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November 22, 2011, 09:35:32 PM
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Am I supposed to brag now with profits I made from shorting?  Huh

I would if I had done so.

To the other poster, I personally am down in the neighborhood of 50% of my outlay or probably somewhat more, but I've not done the calcs for a while.  I'm surprised it is not much more, but since I was doubling down on the dips, I guess it worked out that way.

I have a vastly larger percent of one day's BTC supply 'in the bag' than I ever imagined I would however.  As always, I am prepared for the bag to be valueless in the end.


Did you decide not to because you think it's against the spirit of Bitcoin to go short?

Not at all.  I would have shorted to big time if I had thought that it was a good move and I could transfer other people's money into my pocket by doing so.

As it happened, I thought that the BTC I was buying was a good value proposition and was unlikely to go much lower.  I made this miscalculation time and time again, and was not informed or interested enough to learn how to hedge my bets appropriately.

I thought that enough people would have enough desire to have BTC 'in the bag' given that it can be easily and privately re-acquired from anywhere that the demand would be significant.  This contrasts with gold where one needs to carry it on an airplane or state-sponsered fiat which is highly monitored.  Anyway, I was wrong and someone else has some of my USD because of that.  If it's you or electric or whoever, congratulations...your analysis was better than mine so you deserve the money I once had.


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November 22, 2011, 10:09:38 PM
 #11

Am I supposed to brag now with profits I made from shorting?  Huh

I would if I had done so.

To the other poster, I personally am down in the neighborhood of 50% of my outlay or probably somewhat more, but I've not done the calcs for a while.  I'm surprised it is not much more, but since I was doubling down on the dips, I guess it worked out that way.

I have a vastly larger percent of one day's BTC supply 'in the bag' than I ever imagined I would however.  As always, I am prepared for the bag to be valueless in the end.


Did you decide not to because you think it's against the spirit of Bitcoin to go short?

Not at all.  I would have shorted to big time if I had thought that it was a good move and I could transfer other people's money into my pocket by doing so.

As it happened, I thought that the BTC I was buying was a good value proposition and was unlikely to go much lower.  I made this miscalculation time and time again, and was not informed or interested enough to learn how to hedge my bets appropriately.

I thought that enough people would have enough desire to have BTC 'in the bag' given that it can be easily and privately re-acquired from anywhere that the demand would be significant.  This contrasts with gold where one needs to carry it on an airplane or state-sponsered fiat which is highly monitored.  Anyway, I was wrong and someone else has some of my USD because of that.  If it's you or electric or whoever, congratulations...your analysis was better than mine so you deserve the money I once had.



So what's your next move? Now that the kool aid has worn off, are you still buying in the dips? Whether long or short, the same rules apply. Emotion can cause people to make bad decisions. Some of you got wiped out because you were at max leverage during that recent spike to 2.5, for instance. Many others are sitting with negative P/L in short positions because their base price is ~2.2 and we very well might see another short squeeze. If this happens, expect the price to jump into a large sell off at 2.6 - 2.7, and a wild ride back down to the low 2's. If anyone is short right now, you should make sure you're not maxed out, and/or increase your account balances ahead of time so that you can increase your base price during a squeeze, and benefit from the crash after.

Good luck tbvcof. Thanks for supporting Bitcoin. We need a lot more people like you. Can I suggest that you accept some losses and go support a Bitcoin merchant? It helps everyone. Smiley

-Jonathan

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November 22, 2011, 10:27:24 PM
 #12

...
So what's your next move? Now that the kool aid has worn off, are you still buying in the dips? Whether long or short, the same rules apply. Emotion can cause people to make bad decisions. Some of you got wiped out because you were at max leverage during that recent spike to 2.5, for instance. Many others are sitting with negative P/L in short positions because their base price is ~2.2 and we very well might see another short squeeze. If this happens, expect the price to jump into a large sell off at 2.6 - 2.7, and a wild ride back down to the low 2's. If anyone is short right now, you should make sure you're not maxed out, and/or increase your account balances ahead of time so that you can increase your base price during a squeeze, and benefit from the crash after.

Good luck tbvcof. Thanks for supporting Bitcoin. We need a lot more people like you. Can I suggest that you accept some losses and go support a Bitcoin merchant? It helps everyone. Smiley

-Jonathan

If you want to know my next move, I'll happily tell you, but it's a tentative plan and I am always prepared to change it as the situation demands.

If BTC goes down into the $1.xx range, I'll make one more sizable purchase, but probably no more.

If there is a terminal exploit, I'll kiss my money goodbye, else I'll sit on what I have pretty much indefinitely.  If I can use the BTC collection for something which I feel is a good purpose, I may do so.  I personally am lukewarm about using Bitcoin directly in a consumer economy because I don't think it will scale to where I could envision such a solution needing to, so I likely won't be supporting efforts which promote that.

I am concerned about the scaling of Bitcoin if it does actually become popular.  I am also interested in the technical details or keeping it viable in the event of various disasters (like Lieberman's 'internet kill switch' and that sort of thing.)  I intend to switch my efforts over to trying to do some actual useful work in these areas.



Vandroiy
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November 23, 2011, 12:46:24 PM
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Technomage, mjcmurfy: thanks. Smiley

tvbcof: I already have my speculating position. If anything, I want to get a feeling for opinion, and that's hard if one part of it is suppressed.

Jonathan: OK Wink

How much have you lost if you had to cash out at current price?

Counting from when? During inside the bust, hm, my average buying price should be around 2.8 so far, so one could say 18% down. Overall... well, there was the bubble, lol, so still up a factor.

Am I supposed to brag now with profits I made from shorting?  Huh

Go ahead, by any means! I want to know what's going on, including that stuff. The thread is just about attacks on other people. I like being shown how someone was better than me at some point, sorry if the aggressive tone in the first post made you think otherwise.


I personally am lukewarm about using Bitcoin directly in a consumer economy because I don't think it will scale to where I could envision such a solution needing to, so I likely won't be supporting efforts which promote that.

I am concerned about the scaling of Bitcoin if it does actually become popular.  I am also interested in the technical details or keeping it viable in the event of various disasters (like Lieberman's 'internet kill switch' and that sort of thing.)  I intend to switch my efforts over to trying to do some actual useful work in these areas.

I've been thinking about that a lot, and it seems that we'll always end up with some sort of web-of-trust super-protocol that is backed by Bitcoin, or, less modern solution, classical banks backed by Bitcoin. the strength of Bitcoin is that it's non-local and has strict rules, we don't need to be hedgehogs and use that technology for the tiniest movements. It's all about preventing scams, and that means keeping the difference between bank balance and Bitcoin balance lower than the bank's cost to gain the trust required for the transaction.

That problem can be formalized and solved. I'm currently thinking about designing a cool version of a secondary protocol for this, and by cool I mean that solving the Bitcoin scalability is only a stepping stone to its real features. But sadly, it's one of these projects that don't give revenue to the inventor, so who knows whether it will see the light of day.
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November 23, 2011, 06:04:07 PM
 #14

Am I supposed to brag now with profits I made from shorting?  Huh

Go ahead, by any means! I want to know what's going on, including that stuff. [...]

470% from the last 2 weeks, ok there was a long position or 2 involved and I could have made much more, but that's good enough for me.
And  I spend several hours reading up on technical analysis so that might translate to a poor salary, but if I keep this up.... I can certainly say that bitcoinica delivers.  Smiley

First they ignore you, then they laugh at you, then they keep laughing, then they start choking on their laughter, and then they go and catch their breath. Then they start laughing even more.
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November 23, 2011, 07:35:08 PM
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...
I personally am lukewarm about using Bitcoin directly in a consumer economy because I don't think it will scale to where I could envision such a solution needing to, so I likely won't be supporting efforts which promote that.

I am concerned about the scaling of Bitcoin if it does actually become popular.  I am also interested in the technical details or keeping it viable in the event of various disasters (like Lieberman's 'internet kill switch' and that sort of thing.)  I intend to switch my efforts over to trying to do some actual useful work in these areas.

I've been thinking about that a lot, and it seems that we'll always end up with some sort of web-of-trust super-protocol that is backed by Bitcoin, or, less modern solution, classical banks backed by Bitcoin. the strength of Bitcoin is that it's non-local and has strict rules, we don't need to be hedgehogs and use that technology for the tiniest movements. It's all about preventing scams, and that means keeping the difference between bank balance and Bitcoin balance lower than the bank's cost to gain the trust required for the transaction.

That problem can be formalized and solved. I'm currently thinking about designing a cool version of a secondary protocol for this, and by cool I mean that solving the Bitcoin scalability is only a stepping stone to its real features. But sadly, it's one of these projects that don't give revenue to the inventor, so who knows whether it will see the light of day.

My thoughts also tend to be along the lines of alternate solutions deriving at least some of their value and legitimacy by being backed by Bitcoin.  It is for this reason that I see protecting and strengthening Bitcoin as job #1, and I think that alternates could both facilitate that and provide much more usable end-user results in the process.

If Bitcoin can survive under a massive load only by forming a collection of 'super-nodes', I fear that that limits it's robustness against coordinated attack and makes it more possible for collusion to occur.  I would be much more comfortable about the Bitcoin if the barrier to entry for operating a full-on bitcoind with the full block-chain remains withing the grasp of anyone who wants to do so. Also if the data management and data transfer requirements for a functional network remain such that they could be achieved under a much degraded (or limited) global network infrastructure.

I think it would be a good idea, and relatively practical, to develop a framework which could simulate the load of a whole economic zone operating largely on Bitcoin.  Then see what happens.  What developments need to happen to support it, and how well those implementations work.  That seems like a good use of time and energy.

I am also increasingly interested in ad-hoc networks (given the increasing calls for 'internet kill switches' and the like.)  If Bitcoin cannot survive active and targeted attack at that level, then we need to develop something with can.  So, I will be interested in how the Bitcoin network and the various ad-hoc network projects can inter-operate and may put some effort into fiddling around with that.

I've no particular interest in revenue from fundamental developments (although if the Bitcoin network succeeds, my holdings of BTC would pay off personally.)  Most of the more successful and important developments are not really driven by revenue directly (ssl, Linux/BSD, etc, etc.)


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November 23, 2011, 10:19:08 PM
 #16

470% from the last 2 weeks, ok there was a long position or 2 involved and I could have made much more, but that's good enough for me.
And  I spend several hours reading up on technical analysis so that might translate to a poor salary, but if I keep this up.... I can certainly say that bitcoinica delivers.  Smiley

470% in two weeks? Okay, that beats me. Grin Excellent job!


I am also increasingly interested in ad-hoc networks (given the increasing calls for 'internet kill switches' and the like.)  If Bitcoin cannot survive active and targeted attack at that level, then we need to develop something with can.  So, I will be interested in how the Bitcoin network and the various ad-hoc network projects can inter-operate and may put some effort into fiddling around with that.

I've no particular interest in revenue from fundamental developments (although if the Bitcoin network succeeds, my holdings of BTC would pay off personally.)  Most of the more successful and important developments are not really driven by revenue directly (ssl, Linux/BSD, etc, etc.)

The ad-hoc network thinking is very much on the same page with me. I think we need networks to be more aware of themselves, so they can quickly include ad-hoc structures or topology changes without everybody manually changing the setup.

Generally, strength lies in networks where everybody can do an emergency jump-in for any task easily. If payment works, these people get rewarded, and everything auto-adjusts by force of the market. Smiley
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