Bitcoin hit a high of $8,458 today on coinbase. I'm calling it. This is the end of Bitcoin

[El OchoCinco]

Jack,

My point is that the criticism of BITCOIN that only buying it to sell to a bigger fool is the same reason most of us trade stocks, such as GOOG.

I don't think people buy GOOG because they want voting rights and expect a piece of the 19 billion GOOG made last year.

You think owning 1000 shares of GOOG gives you an real entitlement to a share of the net income? Call up GOOG and ask for your share of the billions. They made $19 billion last year...even .00001% is nice change. You are not entitled to anything if the company never pays a dividend. You are just holding paper.

You believe voting rights has intrinsic value that you can determine in the stock price? GOOG is worth $1,050/share and people buy it because they value the voting rights? I doubt it since power is usually consolidated still in founders or major proxies.

The only reason anyone pays $1,050/share is because they hope to sell it at a much higher price, not because they want to have a voting right or they have a share of income. Stocks are sold in the secondary market for a reason.

No one is buying GOOG because of voting rights or because it gives them a right to a share of the net income they can collect on. This is not a private holding. Stock is paper we trade for higher prices in companies that pay nothing and bigger fool theory works there and is same in BITCOIN.

No one is buying BITCOIN because they expect anything less than to be able to sell it for more money to a bigger fool down the road. If not, why buy it then?

My point is not to disagree with you but the OP who questions why buy BITCOIN except to sell it to a bigger fool. That is exactly what underpins a lot of trading and BITCOIN is traded.

 

[vanzandt]

You think owning 1000 shares of GOOG gives you an real entitlement to a share of the net income? Ok call up GOOG and ask for your share of the billions. They made $19 billion last year...even .00001% is nice change. You are not entitled to anything if the company never pays a dividend.

You believe voting rights has intrinsic value that you can determine in the stock price? GOOG is worth $1,050/share and people buy it because they value the voting rights?

The only reason anyone pays $1,050/share is because they hope to sell it at a much higher price, not because they want to have a voting right or they have a share of income. Stocks are sold in the secondary market for a reason.

No one is buying GOOG because of voting rights or because it gives them a right to a share of the net income they can collect on.

What about getting into the X-Mas party?

 

[El OchoCinco]

Reminds me of the people who buy 1 share of Berkshire just to go to the annual shareholders meeting.

 

[aqtrader]

ha ha. I see more extra tax dollars. the winner is always the government.

 

[JackRab]

@El OchoCinco, I get what you're aiming to to... but there is a difference between a stock and something like gold or bitcoin.

Of course people buy a financial asset to sell it at a higher price. The difference is that a stock has a fundamental valuation... based on cashflows/future earnings. That's earnings from that the company makes. And it's a fact that you do own part of those earnings as a shareholder... whether the company pays out dividend or not doesn't matter. Any earnings add up in their books/assets....

It has that fools game aspect to it, especially when you're investing in companies that don't seem to be (ever) able to make money... that would be something like SNAP. But there is always the possibility for earnings/cashflow. Or a takeover, where the companies assets (IP or goodwill or whatever) are valued at a certain price... because usually a company has assets...

When they never actually make money and generate earnings... then those companies are in a bubble because of the fools game. Hot potato hot potato... like what happened in the Internet-bubble late 90's.

If a company has no assets that will ever generate earnings or any valued IP, than it should be not worth much... like penny stocks. Except when people start a pump-n-dump, than the price can go from 5 cents to 100 bucks... because those people pumping it up make the ignorant common people believe it has value and it's very low now and can only go up, so you'd better get in now before it's too late... like BTC!

 

[sle]

@El OchoCincoThe difference is that a stock has a fundamental valuation... based on cashflows/future earnings. That's earnings from that the company makes. And it's a fact that you do own part of those earnings as a shareholder... whether the company pays out dividend or not doesn't matter. Any earnings add up in their books/assets....

Gold?

 

[JackRab]

Gold?

Gold is valued mostly the same as bitcoin... hype...

If you look at gold investing websites, they're the same doom scenario spruiking type of people as bitcoin sites... they all have only one way to talk it up, that's through marketing and hype.

Stocks have a fundamental basis of valuation. Gold and neither bitcoin does.

Well, they could... if linked to actual purchases. Like how the USD money supply is more or less linked to the US-GDP... same for EURO etc.

But they are not used for that... they are both used for speculation based on that fools' game of hot potato hot potato... Gold a bit less, since you can actually use it as a product in an industrial way.

Gold doesn't do anything really... I know of guys putting most of their net worth in gold around the GFC highs... that backfired significantly. Drop from 2000 to 1300 now and missed a 100% return in equities...

 

[sle]

Stocks have a fundamental basis of valuation. Gold and neither bitcoin does.

A lot of financial assets are based on faith. Purchase of the US dollars is statement of faith in the US government. Purchase of gold is a statement of faith in the universal acceptance of shiny gold metal. Neither is guaranteed to be true forever, but we continue to believe

 

[i960]

A lot of financial assets are based on faith. Purchase of the US dollars is statement of faith in the US government. Purchase of gold is a statement of faith in the universal acceptance of shiny gold metal. Neither is guaranteed to be true forever, but we continue to believe

It's gotta be physical gold though. There's no way all that COMEX "gold" will be useful when you *really* need it. If I'm not mistaken they already control and limit the amount of physical settlements that happen.

 

[sle]

There's no way all that COMEX "gold" will be useful when you *really* need it.

Some years ago I met a guy that was buying gold coins. His argument was something along the lines of "when the apocalypse comes, I will be able to trade these things for canned food and rounds for my AK-47". Needless to say, he could not explain why he would not stock up on the said canned food and rounds instead.