Global Macro Trading Journal

If you want to trade and invest well, learn history they say. With that thought I purchased the book The Book of Satoshi to learn more about the beginnings of Bitcoin. Great book, there is a lot of stuff there that you dont see anywhere else.

For instance, lots of people say that Bitcoin is the safest network in the world and it has never been hacked. Its possible that it is the most secure but it has been hacked in the past and I didnt know that:

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Here is the post where Satoshi is begging people to update the software so the whole thing doesn't implode
http://satoshinakamoto.me/2010/07/29/alert-upgrade-to-0-3-6/

Other things that I learned that I can recall
-Satoshi brings up the good point that when people lose their coins, the rest of the bitcoin coin holders gain as their coins become more valuable (to me, thats akin to a form of a 'yield' in the currency. the idiocy yield or 'natural deflation' as someone called)
-Satoshi designed the system for 1.5 years before going public with it
-People brought up all kinds of reasons why the project might be flawled in the beginning but Satoshi had antecipated pretty much all of them during design. Nobody could come up anything that made him sweat

The limited supply of BTC plus the idiocy yield makes it a very deflationary currency over-time, this encourages hoarding and lack of spending.

A commonly brought up point is that BTC is only attracting speculators/hodlers and its not being used in the real world (and I myself raised this point in the past) but I no longer think that is a big deal. To me, if someone learns about bitcoin, has a wallet, knows how to do transactions, that is a real user in the future, even if he is an speculator now (and its hard not to be due the dynamic of limited supply + idiocy yield + potential massive adoption). Its a person that is completely familiar with the system, when bitcoin matures and becomes stable, I bet the majority of these speculators will become users. its just that at this point its hard for them to do that

If you spend bitcoin and see it soar, it feels like you made a mistake, even if you can replace it. Replacing it is hard due the anchoring bias (who likes to rebuy what you spent at 10x the price you originally bought? mentally its not comfortable).

So it seems to me that BTC is destined to only mature AFTER it goes through a gigantic bubble. Maybe the bubble was the 2017 move, I'm betting there is one more leg up on this and my gain will be several times my risk if that is the case. But I could be wrong 2017 could have been it so, there's that risk
 
Gavin Andresen (one of the early BTC developers) talks abouy how hodl wasn't a thing in the beginning
"HODL” wasn’t a thing– instead, bootstrapping the community by purchasing things (like 50BTC alpaca socks or 10,000BTC pizzas) or giving away Bitcoin was encouraged." http://gavinandresen.ninja/not-as-many-as-you-think

All those people (including Andresen, which run a Faucet where he gave 5 BTC away for free for anyone that wanted it) eventually probably started to regreat their decision when prices started to soar (and whats funny is that some spanish douche abused the faucet after BTC 10xed from its start, by asking for coins over and over with a dif IP, Andresen when to the btc forums and asked who was the spanish jerk).
You had a limited supply currency with an 'yield' with a huge pontential and that was getting traction, quickly people started to get punished for any kind of bearish behavior. (like spending or giving away btc) So hodling eventually was born
 
https://www.wsj.com/articles/buffet...houldnt-sway-berkshire-investments-1519652278

“The inclination might be more toward repurchase than dividends, because dividends have the implied promise that you keep paying them forever,” he says. Berkshire already has said it would repurchase shares if prices fall to 120% of book value or below, and Mr. Buffett says that threshold could rise in the future. “We would do what made the most sense for shareholders,” he said.
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That's huge
I'm still long my BRKB that I longed back at $140s and I even added some recently during the market turmoil. The likely year end buyback price for BRK should be around $180 and he could raise that. At $210, that's only a 16% premium to that price, less if he raises it
 
https://gigaom2.files.wordpress.com/2012/05/vc-enemy-is-us-report.pdf

Good paper talking about the problems in the VC industry. For every $100 raised, VCs seem to take about $20-$25 in fees (mostly in the form of 2% a year commited capital management fees), this creates a significant return drag. As a result, most VC funds (in the limited sample from Kaufman) do not produce decent returns:

"The majority of funds—sixty-two out of 100—failed to exceed returns available from the public markets, after fees and carry were paid."

"The average VC fund fails to return investor capital after fees. "

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One sucessful ex-VC guy used these numbers to talk people out of doing angel investing. But in a lot of ways I find that this is actually encouraging.

This shows that a group of incompent, unethical and unintelligent copycats in a crowded industry are still not losing all of their money. They still produce some sort of return. And these returns would be positive absent of fees, that's what an angel investor can do (invest in a similar universe without fees).

The Kaufman paper itself says that one of the solutions to this problem is
"Invest directly in a small portfolio of new companies, without being saddled by high fees and carry;"

Angel investing is something that I'm getting into now and I already got a few companies that I'm looking at for a potential investment. I have found the book "Angel" by Jason Calacanis very informative in this field
 
Greenspan on using Fed policy to stop the Tech Bubble in the 90s

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I wonder if this same issue will happen with crypto. Governments can try to stop the bubble by taking certain actions, but when they fail (as its likely due the decentralization of crypto technologies) it will only embolden speculators, driving the bubble higher. Governments could kill it by jailing everyone who deals with crypto (similar to the 10% hike in the Fed funds) but that would lead to large social unrest. Its like trying to jail everyone who watched House of Cards or Game of Thrones ilegally, a completely absurd position that is unsustainable. That is the beauty of crypto, you can only stop if you have the guts to go against the masses, which governments seldom do (and even in China, they only went against the exchanges, not the average person buying coins).
 
In a lot of ways, this already has happened. Since China banning crypto trading couldn't stop an exponential rise (from $5K to $20k), people are likely to dismiss further actions, unless they are absolutely monstrous (G-20 banning ownership of crypto)
 
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