Paying for this crisis? It's going to be money printing. Mark my words. Probably with a bit of austerity/tax rises around the edges, but primarily money printing, globally.
I reckon you're right, if most big economies take this approach then plus ca change .... except we seem to have handled things worse than most, and thus be financially hit significantly more than most by this crisis, so without enough tax rises then the pound will presumably lose a fair bit of value
I believe this has been suggested before - and all things being equal'ish it could work.
But, to paraphrase Clinton Baptiste, "I'm getting the word ..............China"
Listening to JP Morgan's Investment Webinar this afternoon it appears the "market" is seeing through Brexit and looking at the bigger picture. Also that interest rates will stay at near zero for many years to come & that there have been less bankruptcies this year than usual (mainly because firms have been propped up by Government money).
Anyway, speaking of tech stocks, and while we are all smugly inspecting our SIPP growth for the year..here are some thoughts which might not appear connected, but tech stocks are at the heart of them...would be interested in your responses, not least because I feel I have a decision to make about tech in my portfolio fairly soon.
Do any of you take a look at the "cryptos" thread? I do and each time I feel like drawing Private Eye's attention to it for a "CryptoPseuds Corner". No offence to the participants, some very decent Lifers there; I'm guessing that most of the active ones are aged under 40 too. Two years ago the hype was at its peak. I had a little dabble but basically thought I don't understand this stuff, therefore I should not invest in it. Instead an article in Motley Fool sent me down a different path. Basically it argued that Big Tech is taking a keen interest in the real world potential of blockchain, so it might be better to invest in those companies...Microsoft, IBM, Cisco etc. So for that reason I started buying Polar Capital Tech fund, and later on (thanks to recco from @Rob7Lee), the Allianz version. When I mentioned on the crypto thread my early gains for the Polar fund (maybe 8% in a month), the youngsters scoffed. They had their eyes on the Bitcoin graph, dreaming of how rich they would have been had they too bought it when it was worth $0.00001.
Looking back my first investment in the Polar fund, just shy of 2 years ago, is showing a profit of 130%.....
However, we all also know that the indices we track (with the exception of FTSE100), and the funds we hold, whether they are branded tech or not, are full of tech. And many people worry about the valuations of some of those stocks. Yet again there are people who were worrying about that two years ago too!.
Being of the age, I scaled back on my overt tech investments, especially in my SIPP, to reduce volatility. Yet the Polar fund remains a star performer in my SIPP. So what about the coming year? For those of us who are of the age where we should be reducing risk, shouldn't we be looking at tech exposure first? I just read an article in the FT about over-valuations, but one BTL comment which was widely applauded tersely pointed out that its mainly tech stocks which are over-valued. In a correction, they will get whacked first and hardest...
Anyway, speaking of tech stocks, and while we are all smugly inspecting our SIPP growth for the year..here are some thoughts which might not appear connected, but tech stocks are at the heart of them...would be interested in your responses, not least because I feel I have a decision to make about tech in my portfolio fairly soon.
Do any of you take a look at the "cryptos" thread? I do and each time I feel like drawing Private Eye's attention to it for a "CryptoPseuds Corner". No offence to the participants, some very decent Lifers there; I'm guessing that most of the active ones are aged under 40 too. Two years ago the hype was at its peak. I had a little dabble but basically thought I don't understand this stuff, therefore I should not invest in it. Instead an article in Motley Fool sent me down a different path. Basically it argued that Big Tech is taking a keen interest in the real world potential of blockchain, so it might be better to invest in those companies...Microsoft, IBM, Cisco etc. So for that reason I started buying Polar Capital Tech fund, and later on (thanks to recco from @Rob7Lee), the Allianz version. When I mentioned on the crypto thread my early gains for the Polar fund (maybe 8% in a month), the youngsters scoffed. They had their eyes on the Bitcoin graph, dreaming of how rich they would have been had they too bought it when it was worth $0.00001.
Looking back my first investment in the Polar fund, just shy of 2 years ago, is showing a profit of 130%.....
However, we all also know that the indices we track (with the exception of FTSE100), and the funds we hold, whether they are branded tech or not, are full of tech. And many people worry about the valuations of some of those stocks. Yet again there are people who were worrying about that two years ago too!.
Being of the age, I scaled back on my overt tech investments, especially in my SIPP, to reduce volatility. Yet the Polar fund remains a star performer in my SIPP. So what about the coming year? For those of us who are of the age where we should be reducing risk, shouldn't we be looking at tech exposure first? I just read an article in the FT about over-valuations, but one BTL comment which was widely applauded tersely pointed out that its mainly tech stocks which are over-valued. In a correction, they will get whacked first and hardest...
Thoughts, punters?
i mean, 130% is great, but bitcoin alone has considerably outperformed that in the last 12 months by many times. It's a very volatile market, but if you know basic technical analysis and are computer competent its getting easier and easier to make money. If you're still holding ethereum i'd suggest staking it on decentralised exchanges where you'll earn ethereum on what you've pooled.
2021 is likely going to see bitcoin thundering past its all time high, and with it they'll be another alt coin bubble. A lot of crypto traders i respect are seeing DEFI (decentralised finance) as the driving force behind this. Like I mentioned before - you're able to stake your finance in a pool and earn what's effectively interest on it (I know something like ZIL has something like 17% APY returns on staking).
What you have to learn about crypto is its a very sensitive market - as long as you are in on a bull market (which we're currently in) you'll make money.
I mentioned this on the crypto thread, but it's worth looking at this CrescoFinance, a new swiss bank, insured by lloyds of london and will offer interest rates of 3% (interest rates are already negative in switzerland). They just finished their initial sale, but 1 wCres will equal 1 share in the actual company. It's even on the bloomberg terminal. Market cap is still approx 5 million (the top performing DEFI cryptos have market cap of close to 1 billion). Liquidity will be provided on uniswap (the most popular decentralised exchange) at the end of the week/beginning of next where the price is likely to go up, but this is a long term hold for me.
Anyway, speaking of tech stocks, and while we are all smugly inspecting our SIPP growth for the year..here are some thoughts which might not appear connected, but tech stocks are at the heart of them...would be interested in your responses, not least because I feel I have a decision to make about tech in my portfolio fairly soon.
Do any of you take a look at the "cryptos" thread? I do and each time I feel like drawing Private Eye's attention to it for a "CryptoPseuds Corner". No offence to the participants, some very decent Lifers there; I'm guessing that most of the active ones are aged under 40 too. Two years ago the hype was at its peak. I had a little dabble but basically thought I don't understand this stuff, therefore I should not invest in it. Instead an article in Motley Fool sent me down a different path. Basically it argued that Big Tech is taking a keen interest in the real world potential of blockchain, so it might be better to invest in those companies...Microsoft, IBM, Cisco etc. So for that reason I started buying Polar Capital Tech fund, and later on (thanks to recco from @Rob7Lee), the Allianz version. When I mentioned on the crypto thread my early gains for the Polar fund (maybe 8% in a month), the youngsters scoffed. They had their eyes on the Bitcoin graph, dreaming of how rich they would have been had they too bought it when it was worth $0.00001.
Looking back my first investment in the Polar fund, just shy of 2 years ago, is showing a profit of 130%.....
However, we all also know that the indices we track (with the exception of FTSE100), and the funds we hold, whether they are branded tech or not, are full of tech. And many people worry about the valuations of some of those stocks. Yet again there are people who were worrying about that two years ago too!.
Being of the age, I scaled back on my overt tech investments, especially in my SIPP, to reduce volatility. Yet the Polar fund remains a star performer in my SIPP. So what about the coming year? For those of us who are of the age where we should be reducing risk, shouldn't we be looking at tech exposure first? I just read an article in the FT about over-valuations, but one BTL comment which was widely applauded tersely pointed out that its mainly tech stocks which are over-valued. In a correction, they will get whacked first and hardest...
Thoughts, punters?
Part of it will come down to you risk appetite as the years tick on and when you plan to start drawing from the SIPP and how happy you are with the current value. Plus the make up of yours currently.
Other than an early dabble in Crypto's (and I made money) i've not ventured back in, i've also in the past week started to take some profit on one of my SIPPs.
Predominantly as I still have a fair chunk in Fidelity that I want to move over to my ii SIPP. So cashing in ready for the transfer and a bit of a hedge re brexit.
Another thought, cash out some of your profit of those tech funds (maybe leave the original investment amount) and move some to a little less risk/balance. My guess would be you'd be broadly happy if you SIPP increased 7.5% a year from now, but very unhappy if it dropped 20%! The former is probably easier to achieve than stopping the latter!
Crypto is the new gold rush, there will be plenty of people who will make a fortune, but many more who will lose a lot due to greed, and falsely thinking they understand the market.
It is quite literally a bubble, the only underlying "asset" is blockchain technology, which seems decent enough.
Ultimately though, if the cryptos work out, there will be one, possibly two that will succeed, and the rest will fall away.
One will be "legitimised" and at that point, all the others will be worth nothing.
I wouldn't put more than 3-5% of investable wealth in cryptos, maximum.
Crypto is the new gold rush, there will be plenty of people who will make a fortune, but many more who will lose a lot due to greed, and falsely thinking they understand the market.
It is quite literally a bubble, the only underlying "asset" is blockchain technology, which seems decent enough.
Ultimately though, if the cryptos work out, there will be one, possibly two that will succeed, and the rest will fall away.
One will be "legitimised" and at that point, all the others will be worth nothing.
I wouldn't put more than 3-5% of investable wealth in cryptos, maximum.
Crypto is the new gold rush, there will be plenty of people who will make a fortune, but many more who will lose a lot due to greed, and falsely thinking they understand the market.
It is quite literally a bubble, the only underlying "asset" is blockchain technology, which seems decent enough.
Ultimately though, if the cryptos work out, there will be one, possibly two that will succeed, and the rest will fall away.
One will be "legitimised" and at that point, all the others will be worth nothing.
I wouldn't put more than 3-5% of investable wealth in cryptos, maximum.
incorrect.
Ok, well if cryptos are going to become more than a speculative vehicle for people hoping to make 50% a year, then I think unfortunately that I am right.
Cryptos are still a huge speculative market. Currently there are more crypto currencies than there are fiat currencies. This is both ridiculous and unworkable, and a symbol of how much speculation is the main driver. The amount of fork crypto currencies for example is ridiculous.
I do wish you all the best though and I really hope it works out for you. A personal friend of mine told me he lost "enough money to buy a Porsche" when he invested in bitcoin. He works in mergers and acquisitions and isn't someone I would consider "stupid." Greedy, yes, but not stupid.
Crypto is the new gold rush, there will be plenty of people who will make a fortune, but many more who will lose a lot due to greed, and falsely thinking they understand the market.
It is quite literally a bubble, the only underlying "asset" is blockchain technology, which seems decent enough.
Ultimately though, if the cryptos work out, there will be one, possibly two that will succeed, and the rest will fall away.
One will be "legitimised" and at that point, all the others will be worth nothing.
I wouldn't put more than 3-5% of investable wealth in cryptos, maximum.
incorrect.
Ok, well if cryptos are going to become more than a speculative vehicle for people hoping to make 50% a year, then I think unfortunately that I am right.
Cryptos are still a huge speculative market. Currently there are more crypto currencies than there are fiat currencies. This is both ridiculous and unworkable, and a symbol of how much speculation is the main driver. The amount of fork crypto currencies for example is ridiculous.
I do wish you all the best though and I really hope it works out for you. A personal friend of mine told me he lost "enough money to buy a Porsche" when he invested in bitcoin. He works in mergers and acquisitions and isn't someone I would consider "stupid." Greedy, yes, but not stupid.
I don't think you fundamentally understand what cryptocurrencies are and what blockchain is, and what cryptocurrencies utility is within their blockchain. Nearly all are not a replacement for fiat currency (bitcoin was created to be that, or at least a digital version of gold). They're a way of rewarding those that maintain their networks - why would you be a node on a blockchain if you weren't rewarded for it? You claim that you think Blockchain technology is good, but you don't realise the cryptocurrency is a fundamental part of any blockchain otherwise... nobody would participate to maintain the blockchain.
The amount of stocks for companies is, frankly, ridiculous, but we both know how those work and how they are both speculative and used to claim dividends (ie, reward for participating in investing in a company).
I mean, it's a little bit like in the early 90's claiming that only 1 or two websites will remain, the rest of the world's web's businesses will then be worthless. It hasn't turned out anything like that - Amazon and Apple owe their success, and in Amazon's case, existence to the internet. The 90's dot com bubble was a bubble - and there certainly is a bubble forming that will expand and likely contract late next year. But the bubbles are getting bigger, not crashing so hard and more and more institutions are getting involved. If you would have bought one bitcoin back in february, you will forever be up on your investment from now on imo.
Crypto is the new gold rush, there will be plenty of people who will make a fortune, but many more who will lose a lot due to greed, and falsely thinking they understand the market.
It is quite literally a bubble, the only underlying "asset" is blockchain technology, which seems decent enough.
Ultimately though, if the cryptos work out, there will be one, possibly two that will succeed, and the rest will fall away.
One will be "legitimised" and at that point, all the others will be worth nothing.
I wouldn't put more than 3-5% of investable wealth in cryptos, maximum.
incorrect.
Ok, well if cryptos are going to become more than a speculative vehicle for people hoping to make 50% a year, then I think unfortunately that I am right.
Cryptos are still a huge speculative market. Currently there are more crypto currencies than there are fiat currencies. This is both ridiculous and unworkable, and a symbol of how much speculation is the main driver. The amount of fork crypto currencies for example is ridiculous.
I do wish you all the best though and I really hope it works out for you. A personal friend of mine told me he lost "enough money to buy a Porsche" when he invested in bitcoin. He works in mergers and acquisitions and isn't someone I would consider "stupid." Greedy, yes, but not stupid.
I don't think you fundamentally understand what cryptocurrencies are and what blockchain is, and what cryptocurrencies utility is within their blockchain. Nearly all are not a replacement for fiat currency (bitcoin was created to be that, or at least a digital version of gold). They're a way of rewarding those that maintain their networks - why would you be a node on a blockchain if you weren't rewarded for it? You claim that you think Blockchain technology is good, but you don't realise the cryptocurrency is a fundamental part of any blockchain otherwise... nobody would participate to maintain the blockchain.
The amount of stocks for companies is, frankly, ridiculous, but we both know how those work and how they are both speculative and used to claim dividends (ie, reward for participating in investing in a company).
I mean, it's a little bit like in the early 90's claiming that only 1 or two websites will remain, the rest of the world's web's businesses will then be worthless. It hasn't turned out anything like that - Amazon and Apple owe their success, and in Amazon's case, existence to the internet. The 90's dot com bubble was a bubble - and there certainly is a bubble forming that will expand and likely contract late next year. But the bubbles are getting bigger, not crashing so hard and more and more institutions are getting involved. If you would have bought one bitcoin back in february, you will forever be up on your investment from now on imo.
Ok well like I said, good luck and I hope it goes well for you.
Crypto is the new gold rush, there will be plenty of people who will make a fortune, but many more who will lose a lot due to greed, and falsely thinking they understand the market.
It is quite literally a bubble, the only underlying "asset" is blockchain technology, which seems decent enough.
Ultimately though, if the cryptos work out, there will be one, possibly two that will succeed, and the rest will fall away.
One will be "legitimised" and at that point, all the others will be worth nothing.
I wouldn't put more than 3-5% of investable wealth in cryptos, maximum.
incorrect.
Ok, well if cryptos are going to become more than a speculative vehicle for people hoping to make 50% a year, then I think unfortunately that I am right.
Cryptos are still a huge speculative market. Currently there are more crypto currencies than there are fiat currencies. This is both ridiculous and unworkable, and a symbol of how much speculation is the main driver. The amount of fork crypto currencies for example is ridiculous.
I do wish you all the best though and I really hope it works out for you. A personal friend of mine told me he lost "enough money to buy a Porsche" when he invested in bitcoin. He works in mergers and acquisitions and isn't someone I would consider "stupid." Greedy, yes, but not stupid.
I don't think you fundamentally understand what cryptocurrencies are and what blockchain is, and what cryptocurrencies utility is within their blockchain. Nearly all are not a replacement for fiat currency (bitcoin was created to be that, or at least a digital version of gold). They're a way of rewarding those that maintain their networks - why would you be a node on a blockchain if you weren't rewarded for it? You claim that you think Blockchain technology is good, but you don't realise the cryptocurrency is a fundamental part of any blockchain otherwise... nobody would participate to maintain the blockchain.
The amount of stocks for companies is, frankly, ridiculous, but we both know how those work and how they are both speculative and used to claim dividends (ie, reward for participating in investing in a company).
I mean, it's a little bit like in the early 90's claiming that only 1 or two websites will remain, the rest of the world's web's businesses will then be worthless. It hasn't turned out anything like that - Amazon and Apple owe their success, and in Amazon's case, existence to the internet. The 90's dot com bubble was a bubble - and there certainly is a bubble forming that will expand and likely contract late next year. But the bubbles are getting bigger, not crashing so hard and more and more institutions are getting involved. If you would have bought one bitcoin back in february, you will forever be up on your investment from now on imo.
I think I can shed some light here and clear up a few misunderstandings.
Blockchain is an old crypto technique that was applied by the inventors of Bitcoin, in this case as an anonymised, de-centralised network, to provide an immutable audit trail of transactions.
But blockchain doesn't have to be decentralised or anonymous. In one of the companies that I advise and have invested in, they have gone further and distributed the hash key - it's almost impossible to hack and can be distributed across IoT devices - very similar to the system in ‘Start-Up’, if you have watched it. They guy that invented it is a Hungarian mathematician, very well-known in the crypto world.
In others that I've been involved in, such as the international trade finance network, they use specialised types of nodes to carry out different functions so that it can scale, others have a centralised ledger for regulatory purposes and those being designed for professional markets don't have to be anonymous and so aren't. Last, it doesn't even have to be a market that uses blockchain - it can just be used as a convenient way of building an immutable audit trail for any transactional process. Finally, there is a precursor, simply called block, without the chain, that is possibly better suited to professional markets but the guy that owns the patent is sitting on it for some reason.
So, Bitcoin uses blockchain but blockchain isn’t Bitcoin and doesn’t need a coin at all. Other than being decentralise and ‘anonymous’ the other key aspect of Bitcoin is that the hash algorithm is designed to make the solution increasingly difficult to solve as people get better at solving it (or pour more resources into solving it). This is a clever way of managing 'inflation' and why it might become a long term store of value. Unless, as @Huskaris points out, the network continues to vote to fork the chain and undermine the value, if you’ll excuse the pun.
Essentially, solving the hash is just trial and error and therefore computationally expensive and, in a decentralised network, competitive. Together with being anonymous, this is why Bitcoin nodes need to be rewarded for the work they do to solve the hash, as a reward for the hard work required to maintain the Bitcoin blockchain. They're distributed, in order to ensure no-one can control the network. However, it’s not as lucrative as you may think, due to the cost of power required to mine the coin, itself an eco issue.
The Bitcoin design doesn’t scale well enough to be a global currency - hence the Facebook idea - but I doubt that anyone will ever be allowed to build a libertarian currency that becomes globally systemic. e.g. the Chinese originally saw it as a route to undermine USD but then realised that it was just encouraging masses of capital flight from China and clamped down on it (by hunting down and locking people up). Together with all the hacks (so many potential hackers) - that caused the last rout.
It might become a long-term store of value if the network can collectively resist the urge to inflate it and it can be defended from outside threats. There is also a risk from quantum computing when most known cryptographies will become easily hacked.
Happy to be challenged on any of that, but pretty confident it’s largely correct.
In the meantime, enjoy the ride - who cares about fundamentals when there’s momentum?!
Sorry, @Prague, I did come on here respond to your tech question and got side-tracked - will come back to it but have a deadline this evening! Sorry, everyone that it dragged on a bit - I didn’t have time to write a short one!
Excellent contributions on it though. Glad to see you here, @kentaddick, didnt want to tag you, but I see you as the leading advocate for crypto on CL.
My big problem with the crypto thread is that I never see anybody talking about the real world applications of what you lot are investing in. That´s what puts me off. I know what Unilever do. I know what Facebook (really) does. I had that little punt on Vechain because it looked like it was aimed at applying blockchain to solutions in things like inventory control, in companies like BMW where I could grasp how it could be used. But the details on it have been very thin. I could not find out who “owns” Vechain. If BMW are using “it”, whatever it is, someone high up in BMW must be dealing with someone from Vechain. But ( and I haven’t looked lately) i could find no evidence that any of that had really happened. It could all be a complete fairy tale. And that’s just such token.
Whereas I know what the companies in my tech fund do. If Blockchain is a thing, and they are the companies that then sell Blockchain solutions to companies like BMW, they will make money. And if that’s true, they may be only just starting, in which case why sell out of tech now, if the reasons to buy/hold remain strong? That’s what I’m pondering.
Sorry, I'm just a simple IFA & its all too much for me.
I have always said that when the big Investment Companies like Baillie Gifford, JP Morgan, Schroders etc invest in Bitcoin for their funds then it will be kosher. Until then I'm happy to stay ignorant. There was one Investment company (can't remember who) that last week said that they were looking at Blockchain as part of their "Alternatives" portion of their funds. But it would only be 1% or 2%. Thats about as far as it goes for me, and if I can't understand then I can hardly suggest it to my clients.
Like most "schemes" there will be winners & losers but sadly a lot more losers I expect when it all comes crashing down.
I can make a weak case for Bitcoin as digital gold and could envisage putting a tiny % of my assets in it, but the rest of blockchain/crypto is unintelligible nonsense attractive to the usual charlatans.
Bitcoin 😓😓 Whatever happened to Luncheon Vouchers, I understood them & Green Shield Stamps.
I have invested in Argo Blockchain but still mystified even with "Kents" eloquence, I understand Data Centres and Comm's transmission types, and to me it's all about high level secure monetary transits and a universal accepted currency that floats in the cloud with a limited number on coins available. Bit like a virtual chunk of gold that good miners can find ( Argo).
Excellent contributions on it though. Glad to see you here, @kentaddick, didnt want to tag you, but I see you as the leading advocate for crypto on CL.
My big problem with the crypto thread is that I never see anybody talking about the real world applications of what you lot are investing in. That´s what puts me off. I know what Unilever do. I know what Facebook (really) does. I had that little punt on Vechain because it looked like it was aimed at applying blockchain to solutions in things like inventory control, in companies like BMW where I could grasp how it could be used. But the details on it have been very thin. I could not find out who “owns” Vechain. If BMW are using “it”, whatever it is, someone high up in BMW must be dealing with someone from Vechain. But ( and I haven’t looked lately) i could find no evidence that any of that had really happened. It could all be a complete fairy tale. And that’s just such token.
Whereas I know what the companies in my tech fund do. If Blockchain is a thing, and they are the companies that then sell Blockchain solutions to companies like BMW, they will make money. And if that’s true, they may be only just starting, in which case why sell out of tech now, if the reasons to buy/hold remain strong? That’s what I’m pondering.
Back online.
The tech side of Blockchain I can confidently say will just be commoditised (if it isn't already). If you think it's going to drive the next wave of innovation, then buy the tech names delivering it. Think of it like when relational databases were new. You didn't buy the companies that were using it - you bought Oracle or IBM.
If you are looking for tech themes, what I currently focus on is cloud (MSFT, AMZN, Gama, etc.), security & identity (Crowdstrike, Fortinet, Avast, Experian) data & analytics (RELX, Alphabet, Baidu, Palantir and so on), digitisation/platforms (Paypal, Shopify, Salesforce, etc.).
Not saying now is the right time to buy any of those (Gama, Experian and Fortinet maybe) but most of those are in my portfolio, except Alphabet because I hate their ethics, Palantir, Salesforce and Shopify due to valuations. I quite fancied BABA until the Chinese government started to throw their weight around.
But there's massive operational scalability in all those firms and the value of data is like gold and keeps growing.
As for if they are over-valued, always difficult to tell. Most of those can continue to grow massively. Any dips I now just add a few. Every time I've sold out completely (e.g. Amazon first time around and Apple more than once) I've regretted it and had to buy back higher. I'd love to be able to time a skim and buy-back but never seem to get that right!
Having said all that, as Golfie says, putting your money in the tech funds is a lot easier - they have the resources to track it. Personally I've been a long term holder of SMT, ROBO & BIOG but the Polar trusts are quality.
Given technology is my living and I advise PE firms on their acquisitions, I tend to dabble a bit more, sometimes just out of idea curiosity.
I can make a weak case for Bitcoin as digital gold and could envisage putting a tiny % of my assets in it, but the rest of blockchain/crypto is unintelligible nonsense attractive to the usual charlatans.
You should probably tell JP Morgan that before they waste millions finishing the development of their own blockchain/crypto.
I can make a weak case for Bitcoin as digital gold and could envisage putting a tiny % of my assets in it, but the rest of blockchain/crypto is unintelligible nonsense attractive to the usual charlatans.
You should probably tell JP Morgan that before they waste millions finishing the development of their own blockchain/crypto.
And what exactly will this “development” bring?. What will it allow JPM to do better or offer its customers that gives it a competitive advantage and increases profitability? Genuinely interested
I can make a weak case for Bitcoin as digital gold and could envisage putting a tiny % of my assets in it, but the rest of blockchain/crypto is unintelligible nonsense attractive to the usual charlatans.
You should probably tell JP Morgan that before they waste millions finishing the development of their own blockchain/crypto.
And what exactly will this “development” bring?. What will it allow JPM to do better or offer its customers that gives it a competitive advantage and increases profitability? Genuinely interested
This sounds revolutionary - finally a way to transfer money:
The JPM Coin isn’t money per se. It is a digital coin representing United States Dollars held in designated accounts at JPMorgan Chase N.A. In short, a JPM Coin always has a value equivalent to one U.S. dollar. When one client sends money to another over the blockchain, JPM Coins are transferred and instantaneously redeemed for the equivalent amount of U.S. dollars, reducing the typical settlement time.
My view on Crypto (and I've made a fair bit of money on it, and just about break even on what I have at the moment) is that a lot of it is Digital Tulips, and you should invest very very carefully and in projects where you've done the due diligence.
What investment I'm doing is now into SPACs, I'm 123% up money I put into Social Capital (mainly due to them being early investors in Slack). They are allowing me to invest in tech companies in a way ETFs can't
Crypto is the new gold rush, there will be plenty of people who will make a fortune, but many more who will lose a lot due to greed, and falsely thinking they understand the market.
It is quite literally a bubble, the only underlying "asset" is blockchain technology, which seems decent enough.
Ultimately though, if the cryptos work out, there will be one, possibly two that will succeed, and the rest will fall away.
One will be "legitimised" and at that point, all the others will be worth nothing.
I wouldn't put more than 3-5% of investable wealth in cryptos, maximum.
incorrect.
Ok, well if cryptos are going to become more than a speculative vehicle for people hoping to make 50% a year, then I think unfortunately that I am right.
Cryptos are still a huge speculative market. Currently there are more crypto currencies than there are fiat currencies. This is both ridiculous and unworkable, and a symbol of how much speculation is the main driver. The amount of fork crypto currencies for example is ridiculous.
I do wish you all the best though and I really hope it works out for you. A personal friend of mine told me he lost "enough money to buy a Porsche" when he invested in bitcoin. He works in mergers and acquisitions and isn't someone I would consider "stupid." Greedy, yes, but not stupid.
I don't think you fundamentally understand what cryptocurrencies are and what blockchain is, and what cryptocurrencies utility is within their blockchain. Nearly all are not a replacement for fiat currency (bitcoin was created to be that, or at least a digital version of gold). They're a way of rewarding those that maintain their networks - why would you be a node on a blockchain if you weren't rewarded for it? You claim that you think Blockchain technology is good, but you don't realise the cryptocurrency is a fundamental part of any blockchain otherwise... nobody would participate to maintain the blockchain.
The amount of stocks for companies is, frankly, ridiculous, but we both know how those work and how they are both speculative and used to claim dividends (ie, reward for participating in investing in a company).
I mean, it's a little bit like in the early 90's claiming that only 1 or two websites will remain, the rest of the world's web's businesses will then be worthless. It hasn't turned out anything like that - Amazon and Apple owe their success, and in Amazon's case, existence to the internet. The 90's dot com bubble was a bubble - and there certainly is a bubble forming that will expand and likely contract late next year. But the bubbles are getting bigger, not crashing so hard and more and more institutions are getting involved. If you would have bought one bitcoin back in february, you will forever be up on your investment from now on imo.
I think I can shed some light here and clear up a few misunderstandings.
Blockchain is an old crypto technique that was applied by the inventors of Bitcoin, in this case as an anonymised, de-centralised network, to provide an immutable audit trail of transactions.
But blockchain doesn't have to be decentralised or anonymous. In one of the companies that I advise and have invested in, they have gone further and distributed the hash key - it's almost impossible to hack and can be distributed across IoT devices - very similar to the system in ‘Start-Up’, if you have watched it. They guy that invented it is a Hungarian mathematician, very well-known in the crypto world.
In others that I've been involved in, such as the international trade finance network, they use specialised types of nodes to carry out different functions so that it can scale, others have a centralised ledger for regulatory purposes and those being designed for professional markets don't have to be anonymous and so aren't. Last, it doesn't even have to be a market that uses blockchain - it can just be used as a convenient way of building an immutable audit trail for any transactional process. Finally, there is a precursor, simply called block, without the chain, that is possibly better suited to professional markets but the guy that owns the patent is sitting on it for some reason.
So, Bitcoin uses blockchain but blockchain isn’t Bitcoin and doesn’t need a coin at all. Other than being decentralise and ‘anonymous’ the other key aspect of Bitcoin is that the hash algorithm is designed to make the solution increasingly difficult to solve as people get better at solving it (or pour more resources into solving it). This is a clever way of managing 'inflation' and why it might become a long term store of value. Unless, as @Huskaris points out, the network continues to vote to fork the chain and undermine the value, if you’ll excuse the pun.
Essentially, solving the hash is just trial and error and therefore computationally expensive and, in a decentralised network, competitive. Together with being anonymous, this is why Bitcoin nodes need to be rewarded for the work they do to solve the hash, as a reward for the hard work required to maintain the Bitcoin blockchain. They're distributed, in order to ensure no-one can control the network. However, it’s not as lucrative as you may think, due to the cost of power required to mine the coin, itself an eco issue.
The Bitcoin design doesn’t scale well enough to be a global currency - hence the Facebook idea - but I doubt that anyone will ever be allowed to build a libertarian currency that becomes globally systemic. e.g. the Chinese originally saw it as a route to undermine USD but then realised that it was just encouraging masses of capital flight from China and clamped down on it (by hunting down and locking people up). Together with all the hacks (so many potential hackers) - that caused the last rout.
It might become a long-term store of value if the network can collectively resist the urge to inflate it and it can be defended from outside threats. There is also a risk from quantum computing when most known cryptographies will become easily hacked.
Happy to be challenged on any of that, but pretty confident it’s largely correct.
In the meantime, enjoy the ride - who cares about fundamentals when there’s momentum?!
Sorry, @Prague, I did come on here respond to your tech question and got side-tracked - will come back to it but have a deadline this evening! Sorry, everyone that it dragged on a bit - I didn’t have time to write a short one!
Great contribution and interesting insights, thank you.
I'd say bitcoin is more of a store of value, rather than a currency per say. I'm not a bitcoin maximalist - but it's far, far cheaper to send millions of dollars of bitcoin across the world than say gold, which would then require hundreds of thousands of dollars worth of security to both transport and then vault. We don't know the exact supply of gold, but we do for bitcoin.
The "facebook idea" seems to have died a death, it seems like zuck simply hasn't really thought about what use the coin would have - it's become a bit of a meme in crypto circles.
The majority of cryptocurrencies are ERC20 tokens - a fork that uses the ethereum network. This and decentralised finance (defi) is the most exciting thing and is what is piquing the interest of large financial services- we could one day have trustless smart contracts. Imagine being able to apply for a mortgage, borrow from other individuals and not have a single bank or building society involved.
I can make a weak case for Bitcoin as digital gold and could envisage putting a tiny % of my assets in it, but the rest of blockchain/crypto is unintelligible nonsense attractive to the usual charlatans.
You should probably tell JP Morgan that before they waste millions finishing the development of their own blockchain/crypto.
And what exactly will this “development” bring?. What will it allow JPM to do better or offer its customers that gives it a competitive advantage and increases profitability? Genuinely interested
I think the problem with crypto is the perception of it, as you and others have highlighted (knowingly or not). You don't see the use for bitcoin, so what is the point of it and why the high value. Fair enough and I get it with bitcoin. However, there are others not in that boat.
Moving on from that, with JPM it'll be a huge cost & time saving measure for them. No middle man, so quicker & more secure clearing / settlements, stock trades, cross border payments. Why? Fraud checks, conversion rates, smart contracts are all built in to the blockchain. It's all going to be instant. You've probably heard of XRP / Ripple...This is what they're all about.
I can make a weak case for Bitcoin as digital gold and could envisage putting a tiny % of my assets in it, but the rest of blockchain/crypto is unintelligible nonsense attractive to the usual charlatans.
You should probably tell JP Morgan that before they waste millions finishing the development of their own blockchain/crypto.
And what exactly will this “development” bring?. What will it allow JPM to do better or offer its customers that gives it a competitive advantage and increases profitability? Genuinely interested
I think the problem with crypto is the perception of it, as you and others have highlighted (knowingly or not). You don't see the use for bitcoin, so what is the point of it and why the high value. Fair enough and I get it with bitcoin. However, there are others not in that boat.
Moving on from that, with JPM it'll be a huge cost & time saving measure for them. No middle man, so quicker & more secure clearing / settlements, stock trades, cross border payments. Why? Fraud checks, conversion rates, smart contracts are all built in to the blockchain. It's all going to be instant. You've probably heard of XRP / Ripple...This is what they're all about.
XRP is hilarious, don't rate the project (more the people behind it) at all but made a decent amount from it last couple of weeks.
I dabbled a while ago in crypto and an still sitting on a couple of ethereum. I nearly sold it last week, only to find I couldn't attach my ledger to the computer! None of this hassle with online ETF trading.
If and when a crypto ETF comes on the market I might buy. I've looked at GBTC but instead invested in an ETF that includes that fund it as part of its holding. The 2% fee is a bit off-putting. I have one blockchain tech ETF which is about 1.25% of my portfolio.
I recently took some profit from my tech ETFs as I just wanted to rebalance. 20% in specific tech is enough.
I dabbled a while ago in crypto and an still sitting on a couple of ethereum. I nearly sold it last week, only to find I couldn't attach my ledger to the computer! None of this hassle with online ETF trading.
If and when a crypto ETF comes on the market I might buy. I've looked at GBTC but instead invested in an ETF that includes that fund it as part of its holding. The 2% fee is a bit off-putting. I have one blockchain tech ETF which is about 1.25% of my portfolio.
I recently took some profit from my tech ETFs as I just wanted to rebalance. 20% in specific tech is enough.
Comments
But, to paraphrase Clinton Baptiste, "I'm getting the word ..............China"
Why do big businesses have power over governments, in your opinion?
Facebook chief Mark Zuckerberg 'threatened to pull UK investment amid regulation row'
Previously secret minutes reveal what was said during a discussion between Matt Hancock and Mark Zuckerberg in 2018.
Do any of you take a look at the "cryptos" thread? I do and each time I feel like drawing Private Eye's attention to it for a "CryptoPseuds Corner". No offence to the participants, some very decent Lifers there; I'm guessing that most of the active ones are aged under 40 too. Two years ago the hype was at its peak. I had a little dabble but basically thought I don't understand this stuff, therefore I should not invest in it. Instead an article in Motley Fool sent me down a different path. Basically it argued that Big Tech is taking a keen interest in the real world potential of blockchain, so it might be better to invest in those companies...Microsoft, IBM, Cisco etc. So for that reason I started buying Polar Capital Tech fund, and later on (thanks to recco from @Rob7Lee), the Allianz version. When I mentioned on the crypto thread my early gains for the Polar fund (maybe 8% in a month), the youngsters scoffed. They had their eyes on the Bitcoin graph, dreaming of how rich they would have been had they too bought it when it was worth $0.00001.
Looking back my first investment in the Polar fund, just shy of 2 years ago, is showing a profit of 130%.....
However, we all also know that the indices we track (with the exception of FTSE100), and the funds we hold, whether they are branded tech or not, are full of tech. And many people worry about the valuations of some of those stocks. Yet again there are people who were worrying about that two years ago too!.
Being of the age, I scaled back on my overt tech investments, especially in my SIPP, to reduce volatility. Yet the Polar fund remains a star performer in my SIPP. So what about the coming year? For those of us who are of the age where we should be reducing risk, shouldn't we be looking at tech exposure first? I just read an article in the FT about over-valuations, but one BTL comment which was widely applauded tersely pointed out that its mainly tech stocks which are over-valued. In a correction, they will get whacked first and hardest...
Thoughts, punters?
2021 is likely going to see bitcoin thundering past its all time high, and with it they'll be another alt coin bubble. A lot of crypto traders i respect are seeing DEFI (decentralised finance) as the driving force behind this. Like I mentioned before - you're able to stake your finance in a pool and earn what's effectively interest on it (I know something like ZIL has something like 17% APY returns on staking).
What you have to learn about crypto is its a very sensitive market - as long as you are in on a bull market (which we're currently in) you'll make money.
I mentioned this on the crypto thread, but it's worth looking at this CrescoFinance, a new swiss bank, insured by lloyds of london and will offer interest rates of 3% (interest rates are already negative in switzerland). They just finished their initial sale, but 1 wCres will equal 1 share in the actual company. It's even on the bloomberg terminal. Market cap is still approx 5 million (the top performing DEFI cryptos have market cap of close to 1 billion). Liquidity will be provided on uniswap (the most popular decentralised exchange) at the end of the week/beginning of next where the price is likely to go up, but this is a long term hold for me.
Website here: https://crescofin.ch/
Other than an early dabble in Crypto's (and I made money) i've not ventured back in, i've also in the past week started to take some profit on one of my SIPPs.
Predominantly as I still have a fair chunk in Fidelity that I want to move over to my ii SIPP. So cashing in ready for the transfer and a bit of a hedge re brexit.
Another thought, cash out some of your profit of those tech funds (maybe leave the original investment amount) and move some to a little less risk/balance. My guess would be you'd be broadly happy if you SIPP increased 7.5% a year from now, but very unhappy if it dropped 20%! The former is probably easier to achieve than stopping the latter!
It is quite literally a bubble, the only underlying "asset" is blockchain technology, which seems decent enough.
Ultimately though, if the cryptos work out, there will be one, possibly two that will succeed, and the rest will fall away.
One will be "legitimised" and at that point, all the others will be worth nothing.
I wouldn't put more than 3-5% of investable wealth in cryptos, maximum.
Cryptos are still a huge speculative market. Currently there are more crypto currencies than there are fiat currencies. This is both ridiculous and unworkable, and a symbol of how much speculation is the main driver. The amount of fork crypto currencies for example is ridiculous.
I do wish you all the best though and I really hope it works out for you. A personal friend of mine told me he lost "enough money to buy a Porsche" when he invested in bitcoin. He works in mergers and acquisitions and isn't someone I would consider "stupid." Greedy, yes, but not stupid.
The amount of stocks for companies is, frankly, ridiculous, but we both know how those work and how they are both speculative and used to claim dividends (ie, reward for participating in investing in a company).
I mean, it's a little bit like in the early 90's claiming that only 1 or two websites will remain, the rest of the world's web's businesses will then be worthless. It hasn't turned out anything like that - Amazon and Apple owe their success, and in Amazon's case, existence to the internet. The 90's dot com bubble was a bubble - and there certainly is a bubble forming that will expand and likely contract late next year. But the bubbles are getting bigger, not crashing so hard and more and more institutions are getting involved. If you would have bought one bitcoin back in february, you will forever be up on your investment from now on imo.
I think I can shed some light here and clear up a few misunderstandings.
Blockchain is an old crypto technique that was applied by the inventors of Bitcoin, in this case as an anonymised, de-centralised network, to provide an immutable audit trail of transactions.
But blockchain doesn't have to be decentralised or anonymous. In one of the companies that I advise and have invested in, they have gone further and distributed the hash key - it's almost impossible to hack and can be distributed across IoT devices - very similar to the system in ‘Start-Up’, if you have watched it. They guy that invented it is a Hungarian mathematician, very well-known in the crypto world.
In others that I've been involved in, such as the international trade finance network, they use specialised types of nodes to carry out different functions so that it can scale, others have a centralised ledger for regulatory purposes and those being designed for professional markets don't have to be anonymous and so aren't. Last, it doesn't even have to be a market that uses blockchain - it can just be used as a convenient way of building an immutable audit trail for any transactional process. Finally, there is a precursor, simply called block, without the chain, that is possibly better suited to professional markets but the guy that owns the patent is sitting on it for some reason.
So, Bitcoin uses blockchain but blockchain isn’t Bitcoin and doesn’t need a coin at all. Other than being decentralise and ‘anonymous’ the other key aspect of Bitcoin is that the hash algorithm is designed to make the solution increasingly difficult to solve as people get better at solving it (or pour more resources into solving it). This is a clever way of managing 'inflation' and why it might become a long term store of value. Unless, as @Huskaris points out, the network continues to vote to fork the chain and undermine the value, if you’ll excuse the pun.
Essentially, solving the hash is just trial and error and therefore computationally expensive and, in a decentralised network, competitive. Together with being anonymous, this is why Bitcoin nodes need to be rewarded for the work they do to solve the hash, as a reward for the hard work required to maintain the Bitcoin blockchain. They're distributed, in order to ensure no-one can control the network. However, it’s not as lucrative as you may think, due to the cost of power required to mine the coin, itself an eco issue.
The Bitcoin design doesn’t scale well enough to be a global currency - hence the Facebook idea - but I doubt that anyone will ever be allowed to build a libertarian currency that becomes globally systemic. e.g. the Chinese originally saw it as a route to undermine USD but then realised that it was just encouraging masses of capital flight from China and clamped down on it (by hunting down and locking people up). Together with all the hacks (so many potential hackers) - that caused the last rout.
It might become a long-term store of value if the network can collectively resist the urge to inflate it and it can be defended from outside threats. There is also a risk from quantum computing when most known cryptographies will become easily hacked.
Happy to be challenged on any of that, but pretty confident it’s largely correct.
In the meantime, enjoy the ride - who cares about fundamentals when there’s momentum?!
Sorry, @Prague, I did come on here respond to your tech question and got side-tracked - will come back to it but have a deadline this evening! Sorry, everyone that it dragged on a bit - I didn’t have time to write a short one!
My big problem with the crypto thread is that I never see anybody talking about the real world applications of what you lot are investing in. That´s what puts me off. I know what Unilever do. I know what Facebook (really) does. I had that little punt on Vechain because it looked like it was aimed at applying blockchain to solutions in things like inventory control, in companies like BMW where I could grasp how it could be used. But the details on it have been very thin. I could not find out who “owns” Vechain. If BMW are using “it”, whatever it is, someone high up in BMW must be dealing with someone from Vechain. But ( and I haven’t looked lately) i could find no evidence that any of that had really happened. It could all be a complete fairy tale. And that’s just such token.
Whereas I know what the companies in my tech fund do. If Blockchain is a thing, and they are the companies that then sell Blockchain solutions to companies like BMW, they will make money. And if that’s true, they may be only just starting, in which case why sell out of tech now, if the reasons to buy/hold remain strong? That’s what I’m pondering.
I have always said that when the big Investment Companies like Baillie Gifford, JP Morgan, Schroders etc invest in Bitcoin for their funds then it will be kosher. Until then I'm happy to stay ignorant. There was one Investment company (can't remember who) that last week said that they were looking at Blockchain as part of their "Alternatives" portion of their funds. But it would only be 1% or 2%. Thats about as far as it goes for me, and if I can't understand then I can hardly suggest it to my clients.
Like most "schemes" there will be winners & losers but sadly a lot more losers I expect when it all comes crashing down.
I have invested in Argo Blockchain but still mystified even with "Kents" eloquence, I understand Data Centres and Comm's transmission types, and to me it's all about high level secure monetary transits and a universal accepted currency that floats in the cloud with a limited number on coins available. Bit like a virtual chunk of gold that good miners can find ( Argo).
Think I'll stick to LV's.
The tech side of Blockchain I can confidently say will just be commoditised (if it isn't already). If you think it's going to drive the next wave of innovation, then buy the tech names delivering it. Think of it like when relational databases were new. You didn't buy the companies that were using it - you bought Oracle or IBM.
If you are looking for tech themes, what I currently focus on is cloud (MSFT, AMZN, Gama, etc.), security & identity (Crowdstrike, Fortinet, Avast, Experian) data & analytics (RELX, Alphabet, Baidu, Palantir and so on), digitisation/platforms (Paypal, Shopify, Salesforce, etc.).
Not saying now is the right time to buy any of those (Gama, Experian and Fortinet maybe) but most of those are in my portfolio, except Alphabet because I hate their ethics, Palantir, Salesforce and Shopify due to valuations. I quite fancied BABA until the Chinese government started to throw their weight around.
But there's massive operational scalability in all those firms and the value of data is like gold and keeps growing.
As for if they are over-valued, always difficult to tell. Most of those can continue to grow massively. Any dips I now just add a few. Every time I've sold out completely (e.g. Amazon first time around and Apple more than once) I've regretted it and had to buy back higher. I'd love to be able to time a skim and buy-back but never seem to get that right!
Having said all that, as Golfie says, putting your money in the tech funds is a lot easier - they have the resources to track it. Personally I've been a long term holder of SMT, ROBO & BIOG but the Polar trusts are quality.
Given technology is my living and I advise PE firms on their acquisitions, I tend to dabble a bit more, sometimes just out of idea curiosity.
The JPM Coin isn’t money per se. It is a digital coin representing United States Dollars held in designated accounts at JPMorgan Chase N.A. In short, a JPM Coin always has a value equivalent to one U.S. dollar. When one client sends money to another over the blockchain, JPM Coins are transferred and instantaneously redeemed for the equivalent amount of U.S. dollars, reducing the typical settlement time.
What investment I'm doing is now into SPACs, I'm 123% up money I put into Social Capital (mainly due to them being early investors in Slack). They are allowing me to invest in tech companies in a way ETFs can't
I'd say bitcoin is more of a store of value, rather than a currency per say. I'm not a bitcoin maximalist - but it's far, far cheaper to send millions of dollars of bitcoin across the world than say gold, which would then require hundreds of thousands of dollars worth of security to both transport and then vault. We don't know the exact supply of gold, but we do for bitcoin.
The "facebook idea" seems to have died a death, it seems like zuck simply hasn't really thought about what use the coin would have - it's become a bit of a meme in crypto circles.
The majority of cryptocurrencies are ERC20 tokens - a fork that uses the ethereum network. This and decentralised finance (defi) is the most exciting thing and is what is piquing the interest of large financial services- we could one day have trustless smart contracts. Imagine being able to apply for a mortgage, borrow from other individuals and not have a single bank or building society involved.
https://www.coindesk.com/what-is-defi
Moving on from that, with JPM it'll be a huge cost & time saving measure for them. No middle man, so quicker & more secure clearing / settlements, stock trades, cross border payments. Why? Fraud checks, conversion rates, smart contracts are all built in to the blockchain. It's all going to be instant. You've probably heard of XRP / Ripple...This is what they're all about.