l82start wrote:
i would add the word "potentially" to the "excellent long term store of value" statement, as others have pointed out we really don't know how government or banks will react to decentralized currency and a bit of pessimism is probably warranted..
i am a long time fan of bit coins and was following them from before they actually existed (i may have even posted one of the first bit coin threads on this forum) but as much as i love the idea i am not an investor yet, i have to many worries about the complexity of exchanging/buying them and the prospects of lots choppy waters between now and stability and acceptance.
i do keep a small VP position in silver and when bit coins start to look stable and easy to work with i will probably pick up some for the same reasons i hold silver.. (the advantage of getting there ahead of time) i think there is still opportunity to both "be an early adopter" and "wait until some more of the uncertainty about bit coins is resolved".
i would still classify it as a VP play and not a part of my PP until the transition was well under way (at which point it would be cash)
Thanks for your valuable feedback. I agree with you that it is not urgent to implement bitcoin into the PP. Bitcoin's current value of a few billion may rise to a few hundred billion and it won't impact the assets of the PP. However, after that, once it grows into a few thousand billion it will start impacting the PP's value.
So I would agree that one does not need to implement bitcoin just yet based on the PP losing value if bitcoin becomes mainstream.
Thinking more about the other argument I gave in favor of adding bitcoin to the PP already today: the added protection bitcoin offers to a Permanent Portfolio when it comes to confiscation. Although that is certainly true, bitcoins are much harder to confiscate and having say 20% bitcoins in your pp as well as 20% physical gold would make you more protected against confiscation than just having 25% physical gold, however I realize now that the added currency risk of bitcoin is too high just to get that benefit.
Just on a sidenote, I admire your disciplined approach towards the PP but I am also surprised you never implemented bitcoin into your VP, considering you followed it from the start. Have you never found it to be a good speculation? To me the risk/reward seems very favorable. Do you not agree with that? Also, is it not hard for you to see that you missed out on some tremendous gains?
i came close to putting a small amount of money (nice dinner and a movie money -200$) in as a wild bet/show of support investment but pay-pal dropped them just before i could pull the trigger (BC .70), after that i looked into accounts with Dowala Mtgox and the other company's you were stuck working with and i just wasn't willing or trusting enough to provide the online banking information necessary to get money in and out ( i am paranoid about digital banking with known and trusted company's, so its not necessarily a bad review) i have been watching its rise's and crashes, the hacking of Mtgox etc... ever since.
I think the risk reward is probably pretty good but when i add in my worries about connecting online accounts and my lack of experience and lack of crystal ball to prognosticate tops and bottoms i don't feel i have likely missed anything..
also as i mentioned before i still think there is room to wait and see and still be an "early adopter" for a buy and hold investment VS making an ultra early speculation on a new currency.. even if it is interesting and exiting and tempting ..
Last edited by l82start on Tue Jun 04, 2013 9:54 am, edited 1 time in total.
-Government 2020+ - a BANANA REPUBLIC - if you can keep it
-Belief is the death of intelligence. As soon as one believes a doctrine of any sort, or assumes certitude, one stops thinking about that aspect of existence
"We think, the more people on earth, the less we each have. But it's exactly the opposite, the more people, the more resources we all have!" - Julian Simon, The Ultimate Resource 2
Libertarian666 wrote:I'll consider adding bitcoins [Federal Reserve Notes] to my portfolio as soon as someone explains why they should have any value at all other than because someone else might want them in the future
Two points:
1. Federal Reserve Notes have use value in that you have to use them to pay taxes demanded by local, state and federal government in the US.
2. Other than that, I don't have any of them in my portfolio.
l82start wrote:
i would add the word "potentially" to the "excellent long term store of value" statement, as others have pointed out we really don't know how government or banks will react to decentralized currency and a bit of pessimism is probably warranted..
i am a long time fan of bit coins and was following them from before they actually existed (i may have even posted one of the first bit coin threads on this forum) but as much as i love the idea i am not an investor yet, i have to many worries about the complexity of exchanging/buying them and the prospects of lots choppy waters between now and stability and acceptance.
i do keep a small VP position in silver and when bit coins start to look stable and easy to work with i will probably pick up some for the same reasons i hold silver.. (the advantage of getting there ahead of time) i think there is still opportunity to both "be an early adopter" and "wait until some more of the uncertainty about bit coins is resolved".
i would still classify it as a VP play and not a part of my PP until the transition was well under way (at which point it would be cash)
Thanks for your valuable feedback. I agree with you that it is not urgent to implement bitcoin into the PP. Bitcoin's current value of a few billion may rise to a few hundred billion and it won't impact the assets of the PP. However, after that, once it grows into a few thousand billion it will start impacting the PP's value.
So I would agree that one does not need to implement bitcoin just yet based on the PP losing value if bitcoin becomes mainstream.
Thinking more about the other argument I gave in favor of adding bitcoin to the PP already today: the added protection bitcoin offers to a Permanent Portfolio when it comes to confiscation. Although that is certainly true, bitcoins are much harder to confiscate and having say 20% bitcoins in your pp as well as 20% physical gold would make you more protected against confiscation than just having 25% physical gold, however I realize now that the added currency risk of bitcoin is too high just to get that benefit.
Just on a sidenote, I admire your disciplined approach towards the PP but I am also surprised you never implemented bitcoin into your VP, considering you followed it from the start. Have you never found it to be a good speculation? To me the risk/reward seems very favorable. Do you not agree with that? Also, is it not hard for you to see that you missed out on some tremendous gains?
i came close to putting a small amount of money (nice dinner and a movie money -200$) in as a wild bet/show of support investment but pay-pal dropped them just before i could pull the trigger (BC .70), after that i looked into accounts with Dowala Mtgox and the other company's you were stuck working with and i just wasn't willing or trusting enough to provide the online banking information necessary to get money in and out ( i am paranoid about digital banking with known and trusted company's, so its not necessarily a bad review) i have been watching its rise's and crashes, the hacking of Mtgox etc... ever since.
I think the risk reward is probably pretty good but when i add in my worries about connecting online accounts and my lack of experience and lack of crystal ball to prognosticate tops and bottoms i don't feel i have likely missed anything..
also as i mentioned before i still think there is room to wait and see and still be an "early adopter" for a buy and hold investment VS making an ultra early speculation on a new currency.. even if it is interesting and exiting and tempting ..
Glad to hear you have no regrets. I agree with you that it's still very early phase. I can understand that connecting bank accounts is something you not prefer to do. I wouldn't either. Thanks so much for sharing your experience.
"We think, the more people on earth, the less we each have. But it's exactly the opposite, the more people, the more resources we all have!" - Julian Simon, The Ultimate Resource 2
Wait a second, you added an ultra-speculative investment to the PP, and then decided it wasn't a good fit shortly thereafter?
If we're talking about a "permanent" portfolio, that makes no sense to me whatsoever.
I'm fine with rolling the dice on bitcoins or tulip bulbs or South Sea company shares, but all of that action should be in the VP with money that you can afford to lose.
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
Libertarian666 wrote:Two points:
1. Federal Reserve Notes have use value in that you have to use them to pay taxes demanded by local, state and federal government in the US.
2. Other than that, I don't have any of them in my portfolio.
1) Ok, I see your point about "all debts, public and private". But I received my last tax refund in I-bonds and electronic transfer to a bank account. Ultimately convertible to Federal Reserve Notes, but also to other things.
2) So, you are a non-USAian?
It is the settled policy of America, that as peace is better than war, war is better than tribute. The United States, while they wish for war with no nation, will buy peace with none"James Madison
Libertarian666 wrote:Two points:
1. Federal Reserve Notes have use value in that you have to use them to pay taxes demanded by local, state and federal government in the US.
2. Other than that, I don't have any of them in my portfolio.
1) Ok, I see your point about "all debts, public and private". But I received my last tax refund in I-bonds and electronic transfer to a bank account. Ultimately convertible to Federal Reserve Notes, but also to other things.
2) So, you are a non-USAian?
I am a US citizen and resident, but that doesn't mean I have to have FRNs in my portfolio. In fact, I am net short quite a few of them, via a fixed-rate non-recourse mortgage.
I am a US citizen and resident, but that doesn't mean I have to have FRNs in my portfolio. In fact, I am net short quite a few of them, via a fixed-rate non-recourse mortgage.
Do you hold treasury bonds in your portfolio? What will you ultimately be provided with when those bonds mature? I assume you would not want coins
Do you plan to take advantage of your short position and utilize the non-recourse provisions of your mortgage?
It is the settled policy of America, that as peace is better than war, war is better than tribute. The United States, while they wish for war with no nation, will buy peace with none"James Madison
I am a US citizen and resident, but that doesn't mean I have to have FRNs in my portfolio. In fact, I am net short quite a few of them, via a fixed-rate non-recourse mortgage.
Do you hold treasury bonds in your portfolio? What will you ultimately be provided with when those bonds mature? I assume you would not want coins
Do you plan to take advantage of your short position and utilize the non-recourse provisions of your mortgage?
No, I do not hold T-bonds.
I don't plan to take advantage of the non-recourse provision of my mortgage, but it is nice to have in the event of unexpected events.
