BS&T -- Are you staying or leaving?

[GeoRW]

I can do several percent per week on trading at Mt. Gox + some other exchanges, though not very often ...

What does that mean? On average you are not even making 10% a year.

You may have been able to achieve such gains in the beginning, with luck. But now you can't, not on any longer-term average.

Lol, you don't know what you are talking about 

[EskimoBob]

You guys are like a bunch of old women at the market. Nothing important to say but mouths (fingers) are moving at maximum speed.
For frack sake! Stop whining about BFL and Pirate. Spend this energy on finding out, who prints those damn chips for BFL and at what price. Report back, when you actually have something valuable to say. If not, send your yapping to /dev/null

15 pages of useless and utterly pointless ego stoking verbal diarrhea. If you can not shut up, sit on your fat grabby fingers and count to 99 000.
You guys make the bitcoin community look like a bunch of retards with keyboards.

And now, STFU and go help your mom do your laundry.

[organofcorti]

For frack phrack's sake!

FTFY

[farfiman]

Firstly, you want to read about a great Ponzi scheme? Read the original one: http://en.wikipedia.org/wiki/Charles_Ponzi

Secondly, Currin Trading demonstrated that a Ponzi scheme with 1 investor disproportionately larger than the others puts the whole scheme at risk (if this investor pulls out, the scheme collapses.) This is precisely why Pirate limits the investment amount to 5k BTC per account.

There is no limitation to 5000- thats only for the "smaller accounts" that get miniumum %

Thirdly, this is also the reason why Pirate has done forced withdrawals. Because the big investors letting the interest compound over and over would become disproportionately larger than the others, and would put the Ponzi scheme at risk if they withdraw.

The forced withdraws were mostly from the smaller newer accounts and NOT the old BIG  accounts

Fourthly, like Currin Trading, Pirate is making great efforts to keep his Ponzi floating. He locked down his BTCS&T forum thread to silence the critics. He announced he will show up in person at DEFCON in Las Vegas to drive buzz. He gave away 50 BTC as a surprise prize to some random guy who noticed Pirate's avatar image was being rotated every day (very much like CT trying to re-inforce their "good guys" image with the lottery.)

or he just likes to have some fun now and again ....

Fifthly, the reason Pirate is planning to lower his interest rate is to keep his scheme alive longer. For example, compare Charles Ponzi to Madoff. The first ran his scheme for only 8 months because he was doubling the investors' money every 45 days or so. The second was able to run his for almost 20 years because he was doubling the money only every 6 years. The lower the rates, the longer the scheme goes on.

He hasnt really lowered the rates - most investors will move to the trust funds which gets top % just like before.

[unclescrooge]

All those suckers using Bitcoin are going to be a laughing stock of the internet over this before long.

I beg your pardon? Why are here in the first place if you don't even believe in bitcoins? What a waste of time

That's the kind of thing that will drag even more people to pirate's thing, whatever it is. Because we're mostly here because we trust bitcoin to be a sound and good investment.

[Vladimir]

All those suckers using Bitcoin are going to be a laughing stock of the internet over this before long.

I beg your pardon? Why are here in the first place if you don't even believe in bitcoins? What a waste of time

That's the kind of thing that will drag even more people to pirate's thing, whatever it is. Because we're mostly here because we trust bitcoin to be a sound and good investment.

You are probably relatively new here, you look at that statement of mine slightly out of content (long term).

[unclescrooge]

All those suckers using Bitcoin are going to be a laughing stock of the internet over this before long.

I beg your pardon? Why are here in the first place if you don't even believe in bitcoins? What a waste of time

That's the kind of thing that will drag even more people to pirate's thing, whatever it is. Because we're mostly here because we trust bitcoin to be a sound and good investment.

You are probably relatively new here, you look at that statement of mine slightly out of content (long term).

I indeed do "know" you since a few days, so I'm maybe wrong. My bad if i'm wrong

[organofcorti]

All those suckers using Bitcoin are going to be a laughing stock of the internet over this before long.

I beg your pardon? Why are here in the first place if you don't even believe in bitcoins? What a waste of time

That's the kind of thing that will drag even more people to pirate's thing, whatever it is. Because we're mostly here because we trust bitcoin to be a sound and good investment.

You are probably relatively new here, you look at that statement of mine slightly out of content (long term).

I indeed do "know" you since a few days, so I'm maybe wrong. My bad if i'm wrong

Vlad's tongue and his cheek are good friends. You're not the first to have failed at tongue-in-cheek detection, and you won't be the last. Damn this internet! People never know when I'm joking either.

[Raoul Duke]

All those suckers using Bitcoin are going to be a laughing stock of the internet over this before long.

I beg your pardon? Why are here in the first place if you don't even believe in bitcoins? What a waste of time

That's the kind of thing that will drag even more people to pirate's thing, whatever it is. Because we're mostly here because we trust bitcoin to be a sound and good investment.

You are probably relatively new here, you look at that statement of mine slightly out of content (long term).

I indeed do "know" you since a few days, so I'm maybe wrong. My bad if i'm wrong

Vlad's tongue and his cheek are good friends. You're not the first to have failed at tongue-in-cheek detection, and you won't be the last. Damn this internet! People never know when I'm joking either.

meh...
Just get used to it.
One guy writes one sentence and all of the sudden everyone and its dog detects some emotion that just wasn't there, or fails to detect one that was. The former happens more than the latter

[danieldaniel]

All those suckers using Bitcoin are going to be a laughing stock of the internet over this before long.

I beg your pardon? Why are here in the first place if you don't even believe in bitcoins? What a waste of time

That's the kind of thing that will drag even more people to pirate's thing, whatever it is. Because we're mostly here because we trust bitcoin to be a sound and good investment.

You are probably relatively new here, you look at that statement of mine slightly out of content (long term).

I indeed do "know" you since a few days, so I'm maybe wrong. My bad if i'm wrong

Vlad's tongue and his cheek are good friends. You're not the first to have failed at tongue-in-cheek detection, and you won't be the last. Damn this internet! People never know when I'm joking either.

meh...
Just get used to it.
One guy writes one sentence and all of the sudden everyone and its dog detects some emotion that just wasn't there, or fails to detect one that was. The former happens more than the latter

Wow, this isn't getting off topic or anything.

[Raoul Duke]

All those suckers using Bitcoin are going to be a laughing stock of the internet over this before long.

I beg your pardon? Why are here in the first place if you don't even believe in bitcoins? What a waste of time

That's the kind of thing that will drag even more people to pirate's thing, whatever it is. Because we're mostly here because we trust bitcoin to be a sound and good investment.

You are probably relatively new here, you look at that statement of mine slightly out of content (long term).

I indeed do "know" you since a few days, so I'm maybe wrong. My bad if i'm wrong

Vlad's tongue and his cheek are good friends. You're not the first to have failed at tongue-in-cheek detection, and you won't be the last. Damn this internet! People never know when I'm joking either.

meh...
Just get used to it.
One guy writes one sentence and all of the sudden everyone and its dog detects some emotion that just wasn't there, or fails to detect one that was. The former happens more than the latter

Wow, this isn't getting off topic or anything.

If you go that route, 90% of the thread is off-topic.
The topic is "Are you staying or leaving?", and despite that you have an army debating "Should you leave or leave?"... Take your pick.

[Rygon]

Props to Haplo and Mrb for having a (mostly) civil discussion.

Like a lot of other people on this forum, I have my suspicions about the investment, but I still invest in a PPT. There seems to be this unsaid assumption that the only two options are to invest "nothing" or "everything". I would consider those extremes. Where is the conversation about how much people are willing to invest? Everyone has some lower limit they feel comfortable just throwing away for fun, right? I'm somewhat fortunate that I don't think twice about spending $50-100 on a nice dinner or a new pair of shoes if I'm in the mood for that. If I lose that much money on a bad investment, I can do without that fancy dinner for a week, no big deal. On the other end, I wouldn't sleep well at night if I had $10K+ invested in something risky as Pirate because losing that would cause some pretty long term financial harm.

Also, the amount of entertainment I've gotten out of investing in Pirate has been easily worth a few movie tickets or a trip to the amusement park. (Perhaps I'm just a geek like that)

Personally, I'm reducing my risk down to ~100 BTC because of the recent changes. It can't be much worse than the poor investment choice I made in Sirius XM Radio stock. I don't ever expect to get my principal back on that one. Plus, most of what I have invested are dividends anyhow.

[hgmichna]

Like a lot of other people on this forum, I have my suspicions about the investment, but I still invest in a PPT. There seems to be this unsaid assumption that the only two options are to invest "nothing" or "everything". I would consider those extremes. Where is the conversation about how much people are willing to invest? Everyone has some lower limit they feel comfortable just throwing away for fun, right? ...

Check the Kelly Criterion.

[Haplo]

@Rygon: I agree, although I don't believe the recent changes are cause for suspicion. I suggest checking out the lending forum. There are a good number of lenders which take deposits and are very transparent about their operations. They pay quite well, too, although not as high as pirate.

Check the Kelly Criterion.

I think that's a bit overcomplicated. I also don't buy the whole "Warren Buffet uses this" deal, either. I've read Buffet, and his decisions are based solely on the solvency, competitiveness, and quality of management of the businesses he surveys. He most definitely does not treat investment as a sort of gambling and the amount of money he invests in a company depends on what % of that company he decides he wants to own (based on size and individual merit).

[FreeMoney]

@Rygon: I agree, although I don't believe the recent changes are cause for suspicion. I suggest checking out the lending forum. There are a good number of lenders which take deposits and are very transparent about their operations. They pay quite well, too, although not as high as pirate.

Check the Kelly Criterion.

I think that's a bit overcomplicated. I also don't buy the whole "Warren Buffet uses this" deal, either. I've read Buffet, and his decisions are based solely on the solvency, competitiveness, and quality of management of the businesses he surveys. He most definitely does not treat investment as a sort of gambling and the amount of money he invests in a company depends on what % of that company he decides he wants to own (based on size and individual merit).

I don't know what Buffett thinks about, but if he is usually running in to a limit of what % of this company do I want instead of what % of my assets do I want in this company then it doesn't really apply to him. It would be like a millionaire playing penny poker. If the limit is lower than Kelly would recommend anyway then it doesn't matter. But every small competent investor at least makes an intuitive approximation of Kelly Criterion. I'm by no means a trader, but I do have assets and I don't put -all- of them in the one thing I expect to preform the best.

[PatrickHarnett]

the criterion is only valid when the investment or "game" is played many times over, with the same probability of winning or losing each time, and the same payout ratio

will do better than any essentially different strategy in the long run

Note the requirements.  This typically means more than you think by orders of magnitude.

[Haplo]

I don't know what Buffett thinks about, but if he is usually running in to a limit of what % of this company do I want instead of what % of my assets do I want in this company then it doesn't really apply to him. It would be like a millionaire playing penny poker. If the limit is lower than Kelly would recommend anyway then it doesn't matter. But every small competent investor at least makes an intuitive approximation of Kelly Criterion. I'm by no means a trader, but I do have assets and I don't put -all- of them in the one thing I expect to preform the best.

Eh, Peter Lynch has a pretty good system for it, although it certainly isn't a science. My point is that treating financial investments the same as gambling is the wrong idea. Whether a company does well or not, or whether a bank is solvent and can pay your interest or not are much more predictable than, say, whether a particular horse wins a race or whether a marble lands on red or black. In both cases, though you don't get any "well this company has x% chance of doing well" sort of figures to work by, so the equations used in the Kelly Criteria can't apply.

@Patrick: Yes, sort of, but the math and considerations that go into investments (as opposed to gambling) are very different.

[sadpandatech]

the criterion is only valid when the investment or "game" is played many times over, with the same probability of winning or losing each time, and the same payout ratio

will do better than any essentially different strategy in the long run

Note the requirements.  This typically means more than you think by orders of magnitude.

exactly.
the other reason this cannot be applied to stocks, bonds, etc. Is because there are no set in stone payouts for stocks and bonds. The Kelly Bet relies on the payouts always being the same since you need them to plug into the formula. Granted you could recalculte any time there is a change in the stocks and bonds but it would not be true Kelly Bet.

@Patrick: Yes, sort of, but the math and considerations that go into investments (as opposed to gambling) are very different.

Maybe I misunderstood, but I took it as that is what he was getting at.

[PatrickHarnett]

I was actually observing the "all or nothing" approach being challenged by the Kelly reference as to why you might not want to do that.  In simple optimisation problems (multdimensional linear/binary/non-linear) and point in an interior space is sub-optimal and that's why the simplex method for LP is so easy (it traces the n-dimensional space to an optimum provided the Kuhn-Tucker conditions are met - typically a concave space).

The other aspect of investing/gambling is expected payoff versus average payoffs and that is why people typically diversify their portfolios.  Putting 1000 BTC on a horse to win might have a 100k BTC return, and might have a higher expected return than a BS&T account or a 1% deposit account, but getting enough horse races to get that return becomes unlikely.

As for the difference between gambling and investing, what is your subtle difference between these? 

[Haplo]

As for the difference between gambling and investing, what is your subtle difference between these? 

In gambling the outcomes are random or near it. In investment you can see a company's earnings (to a point, although it's also possible to learn to recognize fraud), you can call them and ask them what they're doing to improve their business, you can see what tangible saleable assets they have (which may not relate to their main business), you can see how often they've paid dividends (if any) and if they've raised them or not. Etc etc.

Investing properly is like appraising a farm for sale. You already know more or less what productivity to expect out of the land, which you can verify by checking various soil features (assuming you know about farming) and determine whether the price you're being offered is low, fair, or too much. In other words, you get a big advantage by having specialist knowledge into the business you're investing in, whereas in gambling the only advantage you might glean is purely mathematical.