Bitcoin is a terrible long-term investment
Like many people I enjoy studying successful investors. I think I learn a lot from them. I learn lessons of wisdom and patience. There are many successful investors of the past. My favorite one is Peter Lynch. Mr. Lynch was the long-time money manager of Fidelity’s Magellan Fund. He ran the fund 1977-1990 and averaged a 29.2% return in that time span. I think it’s safe to say Peter Lynch knows how to make money off the market.
If you ever have a chance you should pick up one of his books or watch a YouTube video on Peter Lynch. He’s very funny and down to earth. So I think about all I have learned from Peter Lynch and apply it to Bitcoin. I believe it makes a terrible long-term investment. If you want to speculate on the short-term fine. All I can think of is those old Wendy’s commercials with Clara Peller when she says “Where’s the beef?”
I recall in the 1990’s there were these things called Beanie Babies. Like Bitcoin there was a limited amount and highly sought after. They sky-rocketed in value! But then they plummeted back down when people realized they were paying thousands for a stuffed animal. I think the allure of Bitcoin for many is that there’s only so many and you better buy them up because there will never be more. But just because there’s a limited amount doesn’t mean that it holds value.
I have no idea what the price of Bitcoin will do. I’m guessing the only way it’s gone this far is pure speculation. Whenever you buy an asset you must ask yourself what’s it worth? If I’m forking over several thousand dollars of my hard earned money for an internet coin I can’t even see or touch what’s the value behind it?
How do you figure out the value of a Bitcoin?
Take Wal-Mart stock for an example. Wal-Mart is a real company, a real huge company. They have real life assets. Every share of Wal-Mart stock makes real life profits. Wal-Mart’s stock makes real life dividend payments. Wal-Mart’s stock also has a real book value. I doubt Wal-Mart is going out of business anytime soon. You could take the balance sheet of Wal-Mart and figure out what its intrinsic value is. But here’s my question. Does Bitcoin have assets? Does Bitcoin make a earning per coin? Does Bitcoin make dividend payments? Is there any finical document what-so-ever that you can determine what its even worth? What exactly is it that a Bitcoin produces?
The technology: It’s not getting any younger
I wouldn’t deny Bitcoin was ahead of its time. So were Atari and MS-DOS. Whatever happened to Atari and MS-DOS? Well it got replaced by more advanced technology. Technology has never in the history of technology increased in value. It’s quickly replaced and depreciates. So why would Bitcoin gain long-term? Younger better looking coins are already trying to take Bitcoin out. It’s only going to get worse for Bitcoin to remain king. If a newer coin starts getting real traction investors will jump that bandwagon the same way they jumped the Bitcoin bandwagon.
Only the Federal Reserve can make money out of thin air
So a block chain is born and there’s instant wealth. Something seems fishy about that.
Is there a country, company or any entity at all backing this up?
I’m sure some people really like this aspect of Bitcoin. But at the same time with USD you have the United States backing it up. The Euro has the European Union. A company backs up its stock. But who’s backing up Bitcoin. The miners? Really who? I have a feeling most countries don’t want internet currency. They want their own money. If they lost that they lost power. I guarantee you they don’t want to lose any power.
Where can I spend it?
Can I buy milk down the street with Bitcoin? What about pay my electric bill? I could sure use stuff at the hardware store can I go there to spend it? My car needs gas, I wonder if they take Bitcoin? Nope. Once you have one where can you spend it? It seems like everyone just converts it back to fiat currency. You can actually spend that.
So I’m hoping there’s a cryptocurrency expert out there kind enough to answer to questions. Who knows maybe I’ll go all in on the crypto craze? But once I figure out what its intrinsic value is, how the technology is superior to any technology to ever be invented, who’s the entity that makes its worth what its market price is and what I can spend it on, I think I’m better off in safer havens.
-Thanks!!!!!!!!!!
