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Motown Bombers

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17 hours ago, Motown Bombers said:

I currently put away 21% of my take home. 6%, which is matched by the employer, goes to a 401k and the other 15% in just a savings account. I did invest in mutual funds and they were doing well but this past week or so have lost a lot. I'm not sure if I should sell or just ride it out. This is the part of investing I hate. 

If buying and holding is making you nervous, then maybe you are risking too much.  Don't wait until you get nervous though.  Make adjustments to your balances at the end of each year or twice or year and stick to it.

I now put 24% into retirement.  I invest the majority in cheap index funds, but I have never been 100% in stocks.  I always have put a substantial portion in investments with fixed returns just for peace of mind.  As I get closer to retirement, I now only put 50% in stocks.  I avoid individual stocks, because I think you need to follow the market closer than I do in order to make smart choices.  If you feel strongly about a stock, maybe invest a small percentage in it.      

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China's biggest property developer Evergrade looks to be bottoming out and defaulting. With a company that has the amount of capital and assets tied up in one entity as Evergrade does, how is this not going to be a Lehman Brothers or Bear Sterns 2.0? That is, a company that carries a massive debt load, defaults, goes belly up, and creates a ripple effect across the world economy.

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  • 4 weeks later...
On 12/4/2021 at 12:10 PM, Tiger337 said:

If buying and holding is making you nervous, then maybe you are risking too much.  Don't wait until you get nervous though.  Make adjustments to your balances at the end of each year or twice or year and stick to it.

I now put 24% into retirement.  I invest the majority in cheap index funds, but I have never been 100% in stocks.  I always have put a substantial portion in investments with fixed returns just for peace of mind.  As I get closer to retirement, I now only put 50% in stocks.  I avoid individual stocks, because I think you need to follow the market closer than I do in order to make smart choices.  If you feel strongly about a stock, maybe invest a small percentage in it.      

The advice/rule of thumb I've heard a lot is that you want your age in percent for bonds/safe stuff.   So If you're 44, 44% not in stocks basically.  I've got a lot of investments other than my 401k that are 100% stock/index mutual funds, but my 401k is one of those ones that manages based on your goal for retirement year from Fidelity and it's breakdown of stocks/bonds actually does mirror pretty closely to that rule of thumb.  

Personally I don't follow that.  Overall I'm way less than than that rule of thumb across all of my investments.  I did buy a big drop of those > 7% I-series bonds from the treasury earlier this year.   I might be closer if you count cash sitting in a savings account but still not the ROT percentage.  

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24 minutes ago, pfife said:

is crypto a scam or furreal?  Most voices that I see that I trust lead toward ponzi.  I'm not talking apes/NFTs, just investing in the currencies themselves.

When you get scammed, you are usually sold a product that is too good to be true.  I don't get what's so great about crypto.  The pitch seems to be that it's going to be our monetary system of the future but the arguments that it should be or will be are not at all convincing to me.  It does seem like a scam.   

I am hearing a lot about nuclear fusion as our energy source of the future. There aren't a lot of ways to invest in that yet, but that sounds intriguing to me (if I were a betting man).  I'd rather just stick to index funds.  

Edited by Tiger337
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1 hour ago, pfife said:

The advice/rule of thumb I've heard a lot is that you want your age in percent for bonds/safe stuff.   So If you're 44, 44% not in stocks basically.  I've got a lot of investments other than my 401k that are 100% stock/index mutual funds, but my 401k is one of those ones that manages based on your goal for retirement year from Fidelity and it's breakdown of stocks/bonds actually does mirror pretty closely to that rule of thumb.  

Personally I don't follow that.  Overall I'm way less than than that rule of thumb across all of my investments.  I did buy a big drop of those > 7% I-series bonds from the treasury earlier this year.   I might be closer if you count cash sitting in a savings account but still not the ROT percentage.  

you have to guess how long you are going to live. If you are looking at 20+yrs of retirement, a high percentage of fixed income may be too conservative even once you retire.

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1 hour ago, Tiger337 said:

When you get scammed, you are usually sold a product that is too good to be true.  I don't get what's so great about crypto.  The pitch seems to be that it's going to be our monetary system of the future but the arguments that it should be or will be are not at all convincing to me.  It does seem like a scam.   

I am hearing a lot about nuclear fusion as our energy source of the future. There aren't a lot of ways to invest in that yet, but that sounds intriguing to me (if I were a betting man).  I'd rather just stick to index funds.  

Fusion is still a long way over the horizon - but I do think we will see safer more modularized fission reactions systems as part of the transition away from fossil.

To me, Crypto is the purest of pure speculations. Crytpo is worth exactly what anyone wants to pay for it at the moment, which could be something or nothing. It's completely unmoored - which is precisely why it will never actually replace government issued money. The crypto creators held the concept that money detached from gov could be more stable and thus more desirable - that governments are evil manipulators of their currencies,  but they had it exactly backwards. Despite what the Von Mises school adherents believe, the methods in systems like the US Federal Reserve are powerful stabilizers of the value of the dollar. Sure it's 'manipulated', but manipulated with the object of stability and predictability, which is why people like to use it. That is exactly what crypto lacks.

Plus currenty the issue with the 'mined' cryptos is that the only profitable way to mine them is to steal the power and/or CPU cycles to mine them because the power and CPU to create one is worth more than the crypto is - so the whole process has become based on massive theft.

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Yeah I'll be the first to admit that I'm not very well read on why we have a federal reserve but it's been my impression it was because things woulda gone to shit without it.  But I suppose it could have been more nefarious at least in part?   At any rate it seems like that could be an outcome for crypto as well?   Honestly that paragraph made me think of libertarians here about a decade ago ranting "audit the fed" and that really gives me a sour taste for these in my mind.

I was going to ask about it being part of a balanced portfolio, but your last paragraph really makes me think I don't want my money there LOL.   More to mine than its worth?  sheesh

 

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I think there might be a real political undercurrent happening with crypto as well, I think the political right is liking it more.  Maybe I mean the conspiratorial right?   I know someone who is into all that kinda conspiracy stuff and all the sudden he bought $100 in some crypto currency and was checking is phone all the time and shit.   As far as I know, the dude has never done any investing before.   So it's weird.   

I wasn't in the old investing thread years ago.   Was ballmich in that thread and did he love crypto?    

 

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1 hour ago, pfife said:

And, correspondingly:   A lot of where I see it being called a ponzi scheme are from lefties.

It's not a Ponzi  - A Ponzi is a specific scam based on pyramiding which is not what crypto is. 

I don't think many people ever spend much time thinking about what money actually is and how it works.

We assume that somewhere in prehistory, the very first commerce was barter, but it's obvious that barter becomes logistically inconvenient really fast, so the idea of an intermediate value storage medium - money that is, emerged pretty quickly. But what to use? Well you couldn't use anything too cheap and easy to come by because by definition those things can't hold more value than they are worth themselves, so things like rare metals, fine sea shells, and gems are all good candidates, and rare metals the best because you can actually 'mint' them and put convenient data on them to reflect their value. But there was still a problem, which is that the supply of even these rare metals was subject to wide fluctuations based on mining discoveries and bank hoarding or even jewelry styles, and supply didn't necessarily increase as economies tried to grow, which has a stifling effect. So national economies could be thrown into inflation or recession based on a mining find somewhere. Not a desirable situation. 

But finally in the 20th century the light went on. You don't need the actual medium to be worth anything in and of itself at all,  as long as someone controls the supply carefully-  the supply will establish the value, the thing in itself can be worthless paper (or computer entries now), as long as it's secure (hard to counterfeit) - and 'fiat' money was born. But the key to fiat money is that someone is managing the supply - and managing it well. That is the only way it works. 

The idea of crypto was its value was supposed to have some 'real' basis in the cost to mine it, but that obviously doesn't actually work to maintain stable value. The problem with crypto as currency is exactly that its value cannot be controlled as needed. No one can remove crypto from circulation when its value is falling and no one can inject it when the economy is expanding (at least any faster than the mining process, which to the degree it is controlled, is controlled by factors untethered to overall economic need. Things like the price of chips and GPUs and electrical power drive mining costs (and your ability to use malware to hijack other people's computer power!). 

So the way I would put is that the one thing Crypto is not is money. It much more akin to gold, and it suffers all the same failures, and in fact more, as money as gold ever did. Despite some governments doing it wrong sometimes, in the main fiat currency has been a huge improvement over gold/silver, just as I believe it will continue to be over crypto, at least until someone comes up with a crypto system different from any out there now.

Though one thing which is does do is function as an untraceable transaction medium for black markets, which is probably what will keep it alive from now on. 

Edited by gehringer_2
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I still have no idea what mining crypto is and why people have these huge farms of computers.  I have some bit, lite, etherium, Doge, elonMars...but super small amounts.  To me it is worth the risk to dump a few grand in these and ride it out.  I like to diversify all over the place with small amounts and keep the majority of our money in proven winners (so far at least).  I have a few grand in groundfloor, Legion M also.  I think I am done with crypto though.  I am in what I thought had a chance to make it.  I do think eventually crypto will be the new cash one day.  I have no idea when that will be though...it is going to span a generation I think at least though.  At the earliest when my kids are old geezers, but more likely when their kids are old geezers.

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27 minutes ago, John_Brian_K said:

I still have no idea what mining crypto is and why people have these huge farms of computers.  I have some bit, lite, etherium, Doge, elonMars...but super small amounts.  To me it is worth the risk to dump a few grand in these and ride it out.  I like to diversify all over the place with small amounts and keep the majority of our money in proven winners (so far at least).  I have a few grand in groundfloor, Legion M also.  I think I am done with crypto though.  I am in what I thought had a chance to make it.  I do think eventually crypto will be the new cash one day.  I have no idea when that will be though...it is going to span a generation I think at least though.  At the earliest when my kids are old geezers, but more likely when their kids are old geezers.

I wouldn't tell anyone not to buy crypto if they want to, but just realize that investing in crypto is like being a 'technical' stock buyer in the sense that you're placing your bets on trend analysis and/or market psychology predictions, not the kind of 'fundamental' value analysis you might do for a company or product.

Edited by gehringer_2
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20 hours ago, gehringer_2 said:

I wouldn't tell anyone not to buy crypto if they want to, but just realize that investing in crypto is like being a 'technical' stock buyer in the sense that you're placing your bets on trend analysis and/or market psychology predictions, not the kind of 'fundamental' value analysis you might do for a company or product.

Yeah, buy what you like.  I think it will be hard for anything to take over for bitcoin at this point though.  All the others will be bought out in a move by Bit to become the new cash at some later date IMO, but there is a ton of time for that to shift.  Bit was one of the first and pretty entrenched so if something else does take over it will have to be huge.

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  • 3 weeks later...
19 minutes ago, pfife said:

I've already admitted I don't know squat about crypto but I'm interpreting your message as crypto mining is increasing demand for chips.   Is that the case?  I hadn't considered that before...... lol...... 

high performance video cards are hit hardest because you mine cryto with GPU's - the brains in a video card. Right now middle upper tier video cards such as Nvida 3000 series are being bid up to about 5x their 'normal' prices. However, cost of electric power has become the dominant factor. It's an incredibly stupid system - the block chain calc is so intense now that the cost of mining crypto is primarily the cost of the electricity needed to run the computational power so miners have to hunt around the world to find the cheapest power - or steal computational power off the web with malware. 5000yrs of recorded history and humans have finally come up with an idea for basing the value of currency that actually makes even less sense than the cost and availability of shiny metal.

Edited by gehringer_2
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3 minutes ago, 1776 said:

After this month I’m surprised this thread hasn’t gotten any love. Has anyone taken any actions during the volatility this month? Sell? Buy? Hold?

There are still some people here that think the market is soaring.  If it makes Biden and the dems look bad it's usually is nonexistent on this forum.

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