Social media chips away at your financial psychology.
There is so much money talk. Your mate over the fence bought a Lambo with the returns from his growth stock portfolio. Or a lady you follow on Twitter made a million from betting on a coin with a dog’s cute face on it.
Everyone seems to be getting rich. They get to buy back their time and you don’t. It can be painful.
As a finance guy for most of my career, this new investing trend — led by investing apps, crypto and social media influencers — is killing me. Immature beliefs about investing can wipe out a lot of what you’ve worked for. Here are twenty-two immature beliefs.
Nope. I love investing. I believe you need to invest some of your money to buy back your time in the long run and do more forms of work you enjoy. But…
Most investing is actually gambling. Read that again.
When you don’t know what you’re doing, you’re really gambling. America loves gambling and that’s what a lot of people are doing. They do zero research, they listen to opinions, they take enormous risks unnecessarily, and they brag about their gains.
Investing culture has exploded. With it, gambling has become an accidental trend. Seeing people gamble and lose is devastating.
This quote I see a lot with online investors is the epitome of immaturity. Someone’s financial position is none of your business. Investing isn’t a measure of strength or masculinity. How much money you’ve made from investing doesn’t determine the quality of your life.
The price of an asset can go up or down. That means all of us have a 50% chance of looking smart. Poverty can teach you a lot, actually. Being rich can teach you a lot, too, about the worst parts of humanity.
Social media can pump asset prices. You could even argue Elon has become a professional at it by pumping and dumping assets using his billions of dollars and millions of fans who trust him.
Dips in prices happen for a reason. Aimlessly buying an asset when the price goes low isn’t the answer, especially when strangers are double-daring you to. Not buying the dip and thinking deeply can cure a lot of financial pain.
A dip can be a discount. A dip can be a prolonged bear market too.
My price target for bitcoin is $289K. I calculated this by taking my current follower count and multiplying it by 1 — Dr Parik Patel
A price target is a guess. They’re written by accidental fortunetellers. Who cares what the price target is for a stock. Who cares what experts who are paid based on how bold their predictions are say.
Who cares about targets. Focus on actuals.
This immature phrase hurts me. Since when did investing become a game of wartime courage? Seriously. Holding onto an asset has nothing to do with courage, bravery, manhood or awesomeness.
There are times in life when you have to sell some or all of your assets. It’s not because you’re stupid. You might get divorced, have a baby, need to pay for an emergency health procedure to save your life, or simply want to cash out and buy a home.
You can’t hold an asset forever. Why? Because one day you’re going to die and that asset will hold no value for you anymore. Selling while your still alive is normal. It doesn’t make you weak. It makes you mortal.
Stool Presidente on Twitter says, “GameStop looks good today.”
Investor: “Okay.” *Hits buy*
This is a new form of immature due diligence. It scares me. The proper way to invest is by doing the following:
- Read the financials.
- Look at the valuation.
- Study the business plan.
- Look at a company’s future.
Twitter doesn’t do investment due diligence for you. Remember that.
[They] be like “fiat is trash” but always have fiat to buy the dip — Dr Parik Patel
Fiat equals cash. Cash buys you assets. Yes, cash goes down in value and can be printed by dudes in suits out of thin air — but…it’s still the main currency we use to transact.
Holding cash can be preparation to buy assets. Cash can be less stress and a good night’s sleep too. I hold plenty of cash to get my sleep.
Billionaires arguing over assets is childish. Investing based on which side of an asset war you’re on is likely to end badly. See a billionaire example below.
Elon Musk acts like a billionaire troll. Gaslighting has become a mainstream investment technique. The point is to gaslight you enough that you’ll sell the assets you invested in and believe in.
Don’t let gaslighters influence your investment decisions.
If I read another article that says “Bitcoin Is Dead” after a standard market correction we’ve seen continuously for the last 12 years, I’m going to vomit. First off, bitcoin is not a currency it’s an asset.
Assets rarely die. Asset prices correct.
This term “all-in” scares me. No matter how much you love an asset you could be wrong. Certainty in financial markets doesn’t exist. Ask the people that sold their assets during the 2020 stock market crash.
Diversification is the strategy used by the professionals. Your 401K fund doesn’t put all their billions of dollars into a K9 dog coin. Why would a normal person adopt that sort of all-in investment strategy?
No. I saw this firsthand when I worked in banking. People have to sell assets when they take on debt to buy them and they dip in price. It’s the reality of leverage. It’s known as a margin call and it protects financial institutions from investors losing everything and not being able to cover their debts.
Investors often sell to cover the debt they took on to invest. One way to avoid margin calls that force you to sell is to invest with cash, not debt. That’s what I do even though the financial gains can be less.
Overconfidence can destroy you.
On the way down your ego starts trading assets.
Smartasses saying “Blah Blah asset is dead” is immature. Forget the “it’s dead” talk. Why do people do it? They’re gaslighting you and they’re often annoyed they missed out on whatever investment opportunity they’re calling dead. Ignore the “it’s dead” critics.
Recessions don’t happen as frequently anymore and they’re much shorter. The reason is that governments around the world use central banks to create money out of thin air. You already knew that.
The problem is it has led the investment community to believe that stocks can’t go down because the government will always step in with free money (stimulus), bailouts, relief packages, infrastructure bills, and rescue plans. This is short-term. Having central banks like the Federal Reserve consistently bail out the economy isn’t a long-term strategy. There are limits.
The problem with creating money out of thin air is we don’t know what the limit is. We’ve only been seriously playing with this experiment since the 2008 global recession.
When is excess free money too much? Nobody knows. It’s safe to say stocks and economies can still go down based on history and economics. Nobody knows how or when, and that’s how it’s supposed to be (by design).
Just found out that there was a minor earthquake in California.
This is a bullish signal because the damage caused to small personal items like plant pots and chimneys needs to be repaired, thus fuelling consumption and boosting aggregate demand for the economy. Long the S&P! — Dr Parik Patel
Access to data has caused us to overanalyze investing decisions. Many people are trying to correlate every event that occurs in the news to how it will affect asset prices. Events can simply happen for unexplained reasons and have zero effect on the economy.
One year of wild speculation and a lot of luck is causing some investor communities to think they’re smarter than the experts who do it for a living. Teenagers may be beating Warren Buffet this year. The question is how many teenagers will beat Warren Buffet over a five or ten-year time horizon?
Anyone can look good at investing in the short term.
I’m not worried about Biden’s capital gains tax. My portfolio is down 69% YTD. Guess I’m just built different — Dr Parik Patel
Avoiding capital gains tax is another investment trend. It’s why the U.S. has to regulate newer blockchain-enabled finance products quickly.
If you don’t want to pay tax right away, then you can simply hold onto your assets and borrow money against them to buy stuff.
Tax is how society is built. Paying tax means you made money.
I doubt it. The current global reserve currency (the currency most global trade is done in) is the U.S. dollar. Dogecoin isn’t going to be replacing the U.S. dollar anytime soon. Governments aren’t going to let a meme coin run the world. That’s immature thinking.
They probably won’t let bitcoin be the global reserve currency anytime soon either. And if they do give bitcoin that power, it won’t be without a fight. Why? A global currency needs to be easily controlled.
There are a lot of investment scams. The ones that really hurt investors are companies and coins that don’t have revenue yet. Revenue is a tick in the “people want this” box.
Companies without revenue are high-risk investments that angel investors with wings, who have money to burn, typically invest in. We call them angels for taking the losses on our behalf.
A bubble suggests an asset’s price is too high. But what if the metrics we use to value an asset are outdated? Tech stocks could be in a bubble. Or tech stock prices could be high as the result of network effects. Therefore, it could be a bubble or it could be a shift in how prices are measured.
Bubble talk is immature. It assumes history sets the future in stone.
Maybe. Hyperinflation talk is everywhere and it can be harmful. But inflation is like a paranormal phenomenon. You can see it, sort of. We could avoid hyperinflation from all the money created of thin air by:
- Refinancing and restructuring global debt
- Bringing in a debt jubilee (forgiving certain debts)
- Swapping out old currencies for new currencies (digital, or government-backed, or a mixture)
Hyperinflation is always a potential outcome. But an outcome can be altered with a new approach.
Nope, they tell you the past. The future is unpredictable.
See for evidence: black swan events, recessions, global health events, wars, climate change, etc. Watching traders on Youtube try and tell you where asset prices are heading is immature. Most of them have no clue what they’re doing and are purely providing entertainment in return for likes and followers.
Seeing investing as a replacement for your job is immature. Sitting at home in your undies trading meme stocks isn’t as fun as it may sound. You’ll get bored. You’ll miss human interaction. And the meaning you get from doing work and seeing it change people’s lives will be lost.
Investing isn’t supposed to replace your job.
Bitcoin proponent Max Keiser announces the F*ck Elon Tour
Bitcoin maximalist Max Keiser has announced the F*ck Elon Tour scheduled to take place on July 8 -9 in Austin, Texas.
Earlier this month, Keiser hit the headlines during the Bitcoin Conference in Miami for several reasons. But chief among them was his antics on stage with MicroStrategy CEO Michael Saylor, in which he repeated the words, “we’re not selling,” and “f*ck Elon.”
This was in reaction to the Elon Musk energy-FUD, which many believe was responsible for Bitcoin’s 45% slump from its all-time high of $65,000.
“F*ck Elon” has now become something of a tagline for Bitcoin maximalism. But with tribalism responsible for toxicity in the cryptocurrency space, is the F*ck Elon Tour doing more harm than good?
What’s the F*ck Elon Tour about?
Despite this week’s bloodbath in the markets, as well as continuing uncertainty at the macroeconomic level, in linking tour information, Keiser confidently stated that Bitcoin can reach a new all-time high in the coming weeks.
— Max Keiser (@maxkeiser) June 22, 2021
The F*ck Elon Tour is introduced as a Bitcoin maximalist event that encourages more maximalism for the simple reason that maximalism is what “got us here.”
“We don’t need less toxicity from Bitcoin maximalists. We need MOAR!!! A LOT MOAR!!!! Toxicity and plebs got us here.”
Rather than a discussion of developments and educational content, the Tour is pitched as a party event featuring special guests. But more importantly, for Bitcoiners only with no mention of altcoins allowed, and most of all no Karens.
Ticket prices range from $50, for “Plebs” tier, to $200, for “JIMI” tier. The cheapest tiers, “Plebs,” “Buzzcocks,” and “Casbah” are already sold out.
Bitcoin maximalism accused of cultism
Keiser has always maintained a maximalist approach towards Bitcoin. But his stunts during the Bitcoin Conference have drawn fire on several fronts.
One such incident was an interview with CNBC Africa in which he launched into a tirade on political corruption. Although there is truth in what he said, it was his outburst and overzealous reaction to the questioning that drew condemnation.
“Do you know that with the Bitcoin I have I can buy any frickin senator or congressman I want? I make the laws. He who has the Bitcoin makes the laws Ran. We’re not just going to sit around and let the God damn government tell us what to do…”
However, the f*ck Elon rant is perhaps the most controversial. Social media responses to the video include comments about presenting a poor image, parallels with the cultism of Bitconnect, cringe, and so on.
There’s no doubt that Keiser is a passionate believer in Bitcoin, which shows through during his public engagements.
But at the same time, his showmanship is rubbing people the wrong way, which in turn does little to convince the undecided on the merits of the leading cryptocurrency.
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Billionaire Mark Cuban Says Bitcoin Is ‘Better Than Gold’
Billionaire investor and entrepreneur Mark Cuban has revealed on social media he believes bitcoin is better than gold as the flagship cryptocurrency is easier to trade, transfer, and convert. Both bitcoin and gold are seen by many as inflation hedges, with some calling bitcoin “gold 2.0.”
In a tweet, Cuban said that bitcoin requires no intermediaries and can be factionalized. He also referenced “William Devane type commercials” that would sell the cryptocurrency as a hedge against inflation.
Devane, who starred in the popular soap opera Knots Landing, has for the past decade been promoting the precious metal for Rosland Capital, telling potential customers that gold is the only currency he trusts.
When TD Ameritrade’s Oliver Renick replied that bitcoin’s “relationship with real interest rates is as random as it was day 1 ten years ago,” implying the cryptocurrency does not work as an inflation hedge, Cuban said he never defended it as such.
Gold is useless, pretty much across the board, but particularly as a hedge. BTC is a digital asset that is similar to gold because they both are driven exclusively by supply and demand. BTC does a better job with both.
The billionaire investor noted that right now there is more demand for the precious metal than for the flagship cryptocurrency, although he believes this will change as “BTC is easier to transact,” and will in time be “better understood and marketed.”
The gold market, Cuban predicted, will shrink as a result. Cuban, as CryptoGlobe reported, invested last month in Ethereum layer-two scaling solution Polygon (MATIC) but has not disclosed the size of his position on the cryptocurrency. The investment has been disclosed on one of his websites.
Earlier this year, billionaire investor Jeffrey Gundlach, CEO of DoubleLine Capital, revealed that while he is still a long-term dollar bear and gold bull, and that he sees bitcoin as a better bet after turning neutral on both the U.S. dollar and gold.
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.
Featured image via Unsplash
I’m Putting My Billion In Bitcoin, Billionaire Ricardo Salinas
Billionaire Ricardo Salinas talked with the director of Blockchain Land about his investment in Bitcoin. Salinas has said that he has 10 percent of his assets in bitcoin. Salinas is a staunch believer in bitcoin. One of the high-profile advocates of the coin with the bitcoin hashtag on his Twitter profile.
He has always been an advocate for bitcoin. He posted on his Twitter profile that paper is worthless. And the best thing to put your money in is Bitcoin. The third richest man in Mexico has revealed that he is not afraid to put his money in bitcoin.
Bitcoin Is As Solid An Investment As Gold
Ricardo Salinas still believes strongly in bitcoin despite the recent price crash.
Enumerating the benefits of bitcoin, the billionaire compares it to gold. Saying that bitcoin with all its benefits qualifies it as a modern form of gold.
Related Reading | Senator Cynthia Lummis: I’m All In On Bitcoin
He made the argument that bitcoin is easy to carry. It enjoys extreme liquidity internationally. And most of all, bitcoin supply is limited. The limited supply of the coin is why Salinas has so much faith in the coin.
Bitcoin supply is hard-capped at 21 million. No one can create more bitcoins. This means that it cannot be manipulated by the government for their gain. The coin supply can also not be manipulated by any developer.
This imposed scarcity means that bitcoin is not subject to inflation. Which is a major concern for the billionaire.
Bitcoin back in the green | Source: BTCUSD on TradingView.com
Salinas continued on to talk about inflation. He mentioned that when he first started working in 1981, a dollar was 20 pesos. Now 40 years later, a dollar is worth 20,000 pesos. Bitcoin’s limited supply is a way to avoid this. If you cannot make new coins, you cannot devalue them.
How About Altcoins?
While Ricardo Salinas is very bullish on bitcoin, he is not so much on altcoins. He attributes his reluctance with altcoins to their inflationary models. He gave Ethereum as an example.
Ethereum has an unlimited supply. This means, unlike bitcoin, an endless number of coins can be produced. Governments can create new coins when they want. An endless supply means that the value depreciates over time instead of appreciating. Due to the fact that there are so many coins in circulation.
Salinas stated that he does not believe that altcoins have the potential to outpace bitcoin. Bitcoin is a finite asset which makes it more valuable.
Related Reading | Is It Too Late To Buy Bitcoin?
Although he does have faith in some altcoins because they provide privacy.
A finite resource does not depreciate. Instead, due to its scarcity, it becomes even more valuable. This is because the number of people that want it increases, while the supply available remains the same. Hence there is a higher demand for it than there is supply.
Ricardo Salinas believes that every investor should have a part of their portfolio in bitcoin.
Featured image from Smart Liquidity Network, chart from TradingView.com
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