Why the Crypto Collapse Matters

Onomea

Onomea

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I have not followed our discussions here on crypto currency because, basically, I am not interested in it. I have felt since I first started hearing about it that it was something I wanted no part of. (I find the traditional stock market plenty risky enough for me.)

Still, this is a useful article in that it explains in fairly simple terms what is going on and why it matters:

Why the Crypto Collapse Matters - The New York Times
 
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ladder13 said:
RippedOH 😱
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??? I have no idea what that means... Maybe has to do with me knowing close to nothing about crypto... Or knowing very little internet slang?

(Maybe just another example of the wisdom of the old truth that the older I get the more I realize how little I know..;))
 
Onomea said:
??? I have no idea what that means... Maybe has to do with me knowing close to nothing about crypto... Or knowing very little internet slang?

(Maybe just another example of the wisdom of the old truth that the older I get the more I realize how little I know..;))
Click to expand...

Just my play on CRYPTO.

I did notice the reference to contributions in that article. Maybe affected the lack of any oversight?
 
One of the things that has stuck with me regarding investing in the stock market and for that matter elsewhere. Something that really stuck in my mind concerning crypto and the understanding of it and how literally everyone was getting into crypto including my son, against my advise. I can't remember exactly how this information was received but I just remember the story. It seems J Paul Getty was on the elevator ride up to his penthouse apartment with one of his closest partners. They got on and there was one operator in uniform and his buddy was with him talking incessantly about all of the money available in the stock market. This was just before the crash in '29. According to the story Getty was listening to these two elevator operators talking about their investments in the market and the "killings" they were making. Getty and friend got off the elevator and Getty turned to his partner and said "The stock market is in serious trouble, we need to make some changes." Within weeks of this discussion the market crashed and Getty managed to save much of is fortune. The lesson according to what I remember was that if a couple of elevator operators could be making a killing in the stock market something must be wrong, that is my sentiment when it comes to crypto...something that easy, shouldn't be.
 
Kinman said:
.. The lesson according to what I remember was that if a couple of elevator operators could be making a killing in the stock market something must be wrong, that is my sentiment when it comes to crypto...something that easy, shouldn't be.
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This reminds me of the Japanese economic miracle, the bubble, bursting in the early '90s due to rampant land speculation.
 
I think blockchain technology will be of use, but I darn sure don't know how it will shake out. NOVA on PBS had a good special on this week about how it works, uses other than with money, etc. Worth watching if you'd like information with both pros and cons.
 
Bullet Bob said:
I think blockchain technology will be of use, but I darn sure don't know how it will shake out. NOVA on PBS had a good special on this week about how it works, uses other than with money, etc. Worth watching if you'd like information with both pros and cons.
Click to expand...

I completely agree that it does and will have a proper place. It has proven to be useful in third world countries as a method of transacting business in everyday life. Risky adventures often produce excellent results and at the same time you can lose your shirt. As with most anything in the investment world it does pay to study in depth what you're getting yourself into. I have a cousin that considers herself a "day trader" because she has been working the stock market from her home computer for decades. I think she has done OK but would probably have done much better trusting a real stock broker that has a proven track record and an education in market strategy. My son on the other hand got talked into investing a good deal of his retirement fun and at the same time tried to talk me into the same thing. I did not understand how the system worked and told him it looked like risky business to me and he should do a bit more research before jumping in...."Oh its gonna be great Dad." Yeah well it ain't so great now is it?
 
Investing in blockchain technology development is much safer and more promising than dealing in cryptocurrency, and there are several ways to do it. Blockchain is, at its core, an extremely secure database that cannot be hacked or destroyed. It is now finding uses in a multitude of financial, business, logistics, military, and manufacturing applications that have nothing to do with cryptocurrency transactions. The technology has nowhere to go but up.
 
Crypto

I also watched the PBS show on Crypto the other night. After the show I was
just as confused as ever. Willyboy
 
Rustyt1953 said:
One of the perks of not having disposable income is not having to fret over foolish or risky investments.
Click to expand...

Over the course of my life, I've spent about 75% of everything I've ever earned on guns, motorcycles, fast cars, good beer, and beautiful women.

The other 25% of my money? I just wasted it... ;)
 
I spent my entire career as an investment analyst/ manager and investment banker. I knew from day one Bit Coin and it's imitators was another version of the Dutch tulip bubble hundreds of years ago. I never try to influence anyone or give advice. I knew the end was near when Odell Beckham Jr. was advising us all to get into Bit Coins.

The fact is a segment of the population wants to believe in fabulous easy money. There is no way to prevent it from happening over and over again.
 
S&WIowegan said:
I spent my entire career as an investment analyst/ manager and investment banker. I knew from day one Bit Coin and it's imitators was another version of the Dutch tulip bubble hundreds of years ago. I never try to influence anyone or give advice. I knew the end was near when Odell Beckham Jr. was advising us all to get into Bit Coins.

The fact is a segment of the population wants to believe in fabulous easy money. There is no way to prevent it from happening over and over again.
Click to expand...

Number 7 of Buffett's comments re crypto. However, the Tulip Bubble was somewhat limited in its effects to only a relatively small number of tulip speculators and it did little to adversely affect the Dutch national economy. One thing it did result in was to establish the need for regulations to control unbridled trading activities. And we are now in somewhat the same situation involving crypto trading which is also, to a large extent, unregulated.
 
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Rustyt1953 said:
Click to expand...

I bought the book in 1996.

Dogbert-X2.jpg
 
Onomea said:
This reminds me of the Japanese economic miracle, the bubble, bursting in the early '90s due to rampant land speculation.
Click to expand...
If you will remember that rampant land speculation caused the loss of the wonderful Parker Reproduction shotgun-they sold the factory to a golf course builder!!

As far as day trading from your home computer-you'd stand a better chance playing poker
 
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Kinman said:
One of the things that has stuck with me regarding investing in the stock market and for that matter elsewhere. Something that really stuck in my mind concerning crypto and the understanding of it and how literally everyone was getting into crypto including my son, against my advise. I can't remember exactly how this information was received but I just remember the story. It seems J Paul Getty was on the elevator ride up to his penthouse apartment with one of his closest partners. They got on and there was one operator in uniform and his buddy was with him talking incessantly about all of the money available in the stock market. This was just before the crash in '29. According to the story Getty was listening to these two elevator operators talking about their investments in the market and the "killings" they were making. Getty and friend got off the elevator and Getty turned to his partner and said "The stock market is in serious trouble, we need to make some changes." Within weeks of this discussion the market crashed and Getty managed to save much of is fortune. The lesson according to what I remember was that if a couple of elevator operators could be making a killing in the stock market something must be wrong, that is my sentiment when it comes to crypto...something that easy, shouldn't be.
Click to expand...

Sounds similar to the Joe Kennedy (JFK's daddy) "Shoeshine Boy" story. Supposedly he was getting his shoes shinned and the shoeshine boy was giving him stock tips. He went to the office and shorted the market into the '29 crash and established the Kennedy fortune.

I've had this happen to me. During the tech stock craze in 1999/2000 one of the salespeople I worked with was telling me about some stock she bought. It was Akamai Technologies. I asked her what they did. She said "I don't know, but they are a real good company!".

Uh-oh. I walked down the hall to the scheduling office and asked my friend how his (often talked about) tech stock was doing. He said he had made so much off of it he could pay for both his girls college with the profits. I told him don't be a pig, bank it. He did. A month later everything fell apart.

Saleslady rode Akamai down some 90%, certain it would come back. The two girls finished college debt-free.

I had never played the tech stocks. My large-cap value stocks all rode through the tech-bust just fine. I did lighten up a bit.

I no longer buy individual stocks. I still have a few but I've been selling them off and transferring the money to a mutual fund. I feel the need to simplify the account so when I'm no longer around it's easier to manage. I'm more of a 40/60 guy than a 60/40.
 
glenwolde said:
Uh-oh. I walked down the hall to the scheduling office and asked my friend how his (often talked about) tech stock was doing. He said he had made so much off of it he could pay for both his girls college with the profits. I told him don't be a pig, bank it. He did. A month later everything fell apart.

Saleslady rode Akamai down some 90%, certain it would come back. The two girls finished college debt-free.
Click to expand...

Reminds me of two sayings: "Pigs get fed, hogs get slaughtered" and "Nobody ever went broke taking a profit."
 
During most of the 1980s I was a fraud and forgery investigator for a major state agency. This was pre-internet days, paper documents were still in use, shoe leather and interview skills were still necessary in my business. Fake identities and bogus credentials were fairly common, but not impossible to figure out.

In today's financial world I am a lost puppy hoping someone will lead me home safely. I have a fairly good knowledge of stocks, bonds, mutual funds, and other typical investment media, but I rely on trusted and experienced people to manage my investments (with my involvement and approvals, of course). Now in retirement, our risk tolerance is near zero so we are concentrating on capital preservation and income generation more so than growth in values.

The whole crypto craze has happened without my participation. I don't understand it. I don't trust it. Ponzi and Madoff probably would have been leaders in the industry if given half a chance. Very little regulatory control or official interest, mostly speculation and blind hope.

A target-rich environment for criminals.
 
To be fair, the current scandal is less about crypto itself and more about an unregulated business run by incompetent managers that mishandled customer funds.

But it has tainted the entire sector. Look at all the knowledgeable people and firms that missed the problems at FTX. That's what's astounding. I don't think crypto is going anywhere. I use Fidelity for brokerage and even they are ramping up their own crypto exchange.
 
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