Gyroscopic Investing

As a non-holder of Bitcoin, except for the .05 BC that Marc graciously gifted me, I was struck by what the performance of the PP would have been this year if we had held 25% Bitcoin and no gold. Being that Bitcoin is up 7000% in a year I'm guessing that the total return would have been about 1700%! Is BC a fair substitute for gold? Is this the future of the Permanent Portfolio?

From what I understand (and I could be wrong) the market for BTC is currently so small that any sale of a few thousand dollars will swing the price dramatically. Every time you rebalanced you'd probably cause a mini crash

But, again, that's just what I heard and could be wrong about that.

Also, the concept of the PP isn't to take risks and amass huge amounts of wealth. The PP is designed to protect you from any disaster, war or collapse and provide you with safety and peace of mind. A collapse of a power grid, for whatever reason, would instantly make the Bitcoins untradeable and a fairly useless currency in an emergency.

Gumby wrote: A collapse of a power grid, for whatever reason, would instantly make the Bitcoins untradeable and a fairly useless currency in an emergency.

An important point to remember.  It would seem obvious, but lots of obvious things are hard to grasp in the middle of a bubble.

Reub wrote: As a non-holder of Bitcoin, except for the .05 BC that Marc graciously gifted me, I was struck by what the performance of the PP would have been this year if we had held 25% Bitcoin and no gold. Being that Bitcoin is up 7000% in a year I'm guessing that the total return would have been about 1700%! Is BC a fair substitute for gold? Is this the future of the Permanent Portfolio?

How silly. Obviously the PP should be 100% bitcoin, because bitcoin went up 7000% in a year!

Exactly my point!

Part of the reason I hold physical gold and physical cash is fear of counterparty risk.  Since we barely know anything about bitcoin's ability to weather a real $hitstorm, I don't understand the idea that it replaces gold in the least.  It's built, essentially, on purely on the idea that an algorithm that mimics scarcity can have intrinsic value because it's cool.

At least my US dollars act as a get out of jail free card .

And if you think about it, isn't our monetary system built on an algorithm as well?

* If unemployment rate - target unemployment rate > inflation rate - target inflation rate, then Ease Monetary Policy
* If unemployment rate - target unemployment rate < inflation rate - target inflation rate, then  Tighten Monetary Policy

This is overly simplified, but for the most part, the fed hasn't verged too far away from this.

If you do buy bitcoins be sure to make a backup copy of your cryptographic key.

I don't know anything about them but is it really true if you lose it the money is gone?

If so, this guy is really an idiot since he works in IT and should have known better.

http://washington.cbslocal.com/2013/11/ ... 5-million/

I'm waiting for the day when there is a massive hacking of bitcoin and it all disappears into the ethernet....or somebody else's pocket.

Sounds like an absent-minded professor. Smart enough to write the mining code, but too careless to leave himself a note to keep the drive.
Poor guy. It's even worse than throwing out winning lotto tickets.

ns2 wrote: ...
If so, this guy is really an idiot since he works in IT and should have known better.

http://washington.cbslocal.com/2013/11/ ... 5-million/