SharperDingaan

Do a google search on cryptocurrency funds. Read up on what non-recourse means. For this purpose non-recourse is a free put option on the unit - with proceeds equal to the margin borrowed. So continually sell the rips, buy the dips, and withdraw capital from both fund and broker. Continually test withdrawal ability, liquidate immediately and withdraw everything as soon as there is resistance. If it blows up, simply walk-away. It will not make you friends, so expect resistance. Brokers/HF's are supposed to make the money, not the client. https://next.autonomous.com/cryptofundlist/ https://www.investitin.com/crypto-fund-list/ SD

Per your example, they both go up 500% - so you would be indifferent. But you would actually go with BTC as 1) less capital is risked to get the 500% return, & 2) there is no risk to a changing premium. What you really want is a cryptofund invested in primarily OTHER than BTC, that will give you non-recourse margin against the units purchased. Keep taking $ off the table through your hold period, & simply walk away if/when the unit/fund implodes under market volatility. The most you can lose is your iniitial equity MINUS whatever you have cummulatively taken off the table. Same trick that was used on inflated mortgages/house prices - going into the GR2 ;) It just needs a foolish banker, & crypto has a lot of them. SD

Almost all altcoin and token is very difficult to short. There are people willing to lend token (criminal element), but its reputationally risky, an expensive carry, & on an on-demand basis only. Far simpler to either sell existing & buy-back lower, or avoid it entirely - hence the shorting comment. It is well known that without the discipline of short-selling, share prices artifically inflate as the bull case feeds upon itself. And as there are no valuation metrics, there is material information assymetry, and distorted supply/demand - there is little price support when the industry sells off. The result is volatility, and a systemic downward bias as fresh demand becomes increasingly hard to find - hence the 'glad to short' comment. Some think the price support collapses this year (90% fall thread) Of course Bitcoin (as the only crypto with an investable option and future market) is the exception. However, given its attractiveness to the criminal element, WEB can't exactly be seen recommending it. It is highly unlikely that WEB has a 'blind spot' around BTC. The blush is coming off the crypto currency rose, but it's still way too early to predict outcome. SD

It’s useful to look at this through a portfolio allocation prism. Assume a 60/40 equity split. Ever since the GR2, interest rates have been driven artificially low. If the expected S&P nominal return is 9%, & the bond return is 3.25% - the portfolio should have earned 6.7% [0.6x9% + 0.4x3.25%] Redo the calculation today. Most would expect interest rates to rise & equity returns to fall accordingly. If the expected S&P nominal return falls to 7.5%, & the bond return is now 4.50% - the portfolio should earn 6.3% [0.6x7.5% + 0.4x4.50%]. Supposedly a bias downward as the globe comes out of the GR2? When historically, equities generally perform better when they come out of recession. Mathematically, for the portfolio to maintain the 6.7% return – the S&P return has to increase by 38% [4.5/3.25] = 1.38. Hence the lower the base bond return is - the more the S&P return needs to increase – and the more risk an investor has to take on. A PM would simply churn the portfolio & invest in more risky equities. The long-term value investor would just continue to hold onto their dividend payers – with the dividend payments returning some of the original capital outlay every month; and thereby raising return on the remaining capital invested. SD

There is a pretty good understanding of what is/is not 'OK' in Canada - whether the legal communiuty likes it or not. If the coin or token is for 'internal' use only (ETH) it's not a security - & therefore 'OK' If the coin or token is just a 'crowd-funding' token (most custom ERC20 token) - it is not a security - & therefore 'OK' If the coin or token is just replacing a share or bond certificate (paper or book-based) - it is not a security - & therefore 'OK' If you create a crypto exchange to buy/sell various crypto - you are an unlicensed exchange - & offside. The only exception is if you are the market maker for your own 'internal' currency; & exchange at a fixed exchange rate. If the intent of your 'crowd-funding' token is that it is a subsitute for common shares - you have issued a security illegally - & are offside. It is not the issuers problem if the token buyer bought the token in expectation of a later sale at a higher price (speculation is not illegal). The expectation (not a requirement) is that the issuer adequately disclosed the nature of the crowd funding token at the time it was sold (white paper/selling process combination). 'Adequate', is open to interpretation. You are supposed to use the crowd funded proceeds to do what you promised; but if you lose it through incompetence, or bankrupt through really bad management - it's just everyday start-up business risk. Whether you bankrupted the start-up by making all the company cars Ferraris, & throwing extravagent parties, or not - & it is this kind of behaviour that the WSJ is alluding to. Irresponsible, but not illegal. SD

Government crypto (CBDC) is just digital, versus physical, fiat currency. Where you have an economic trading block, it does make sense to have an internal CBDC for that trading block; but it's not going to take bitcoin to zero. SD

Hard to imagine the folks at Berkshire haven't been doing their DD on this. The existing solution is Everledger , it has been around for some time, & it is backed by bigger/better? players. http://tech.eu/brief/everledger-funding/ The real money here is in using the blockchain provenance to sell the jewel at a much higher price. It also will not hurt if a famous celebrity was (proveably) the diamonds owner at some prior point, certification is limited to diamonds > $1M, & costs 10K/pop. If sir has to ask the price .... may be recommend our cousins down the street. The real market isn't diamonds either. It's the more numerous high-end coloured stones, and the old master artworks. Perhaps why an auction house is the partner? SD

We just recognize that ever since Lehman Brothers, & prior - the west has experienced continuous rounds of aggressive central bank stimulation to avoid another global depression. As at today, there is 10 years+ of stimulation - that hasn't unwound yet. The major central banks have finally slowly begun to raise interest rates. To use a kitchen reference; the chefs have noted the pot is starting to boil, and turned down the heat. Problem is that the bigger the pot (10 years of stimulus), the harder it is to control. Today we have blockchain fundamentally disrupting long standing business practices, and a level of global 'political risk' that is a lot higher that it was 10 years ago. Added to which is growing recognition that to make the big money (via derivatives); is to systemically bet against stability. El Diablo has a lot of helpers. It's hard to see how we don't get more bubbles, more frequently, and how they would not feed into each other at some level. And as algorithms only work under stable conditions, and until they don't work - the frequency and size of 'discontinuities' should be nice and high. Not your dad's market. SD

Purely speculation. Looking forward today, 6-9 months out; it's pretty hard to see how the US doesn't end up in a trade war with somebody. It's also hard to see how some accident that significantly raises oil prices - does not occurr, somewhere in the world. Hard to see how the market overall would not decline were this to occurr. It's unlikely that Bitcoin would have gone to 20K/token - were huge amounts of money not freely and widely available. Should the sh1te hit the fan, and money become less available - who is going to be buying Bitcoin? And if you held Bitcoin - wouldn't you be inclined to start selling (raising supply), as you saw the above starting to occurr? So at what price does standing in the blood become interesting? Maybe 50-70% off the current price. SD

Not to argue that merits of technical analysis, but you might want look at a BTC chart. Alternatively, build your own if you also want RSI and moving averages. SD Technical analysis on a value investing board? Mayorly undervalued is mayorly undervalued. Just mindful that the current price is below the last trough low (Feb-05) of USD 6,914. For those who belive in the voodoo science, this supposedly means that at the curent price of USD 6,611 it could drop quick a bit until it 'finds' a new level. And given that there really isn't any agreed fundamental value approach applicable to Bitcoin - tossing bones may well be as good as it gets! No opinion as to whether it is under or overvalued. ;D SD

Not to argue that merits of technical analysis, but you might want look at a BTC chart. Alternatively, build your own if you also want RSI and moving averages. SD

Strengthens the Yuan/USD FX rate by reducing Asian demand for USD, & significant as quite a few other 'Asian' nations may prefer to pay with Yuan as well. It also strengthens the broader case for payment in regional currencies (Euro), and ultimately the development of a boad cryptocurrency specifically for trade settlement in the global oil market. Yes everybody laughed because the use of cryptocurrency was a SA idea, but the fact is that it's a very good one. If you're tired of US bullying, develop the cryptocurrency outside of the US (China ?) & use it to start reducing the global demand for USD (& its influence over you). SD

The best person I ever played was a very old babushka who escaped the former East Germany just as the wall was going up. As a female in the east block - she wasn't 'allowed' to do many things, & her grandfather/father (mathematicians/engineers) had trained her 'on the side' in chess and the sciences. It was like playing several people at once, from the super aggressive to the typically defensive, & all of them very good. Got my but kicked until I worked it out, but thereafter it was a 50/50 split. Needless to say we got along famously and I learned a thing or two. She was also the only person I've ever come accross who could play just as well hammered out of her skull, as she could sober! Life experience. SD

Interesting thing we found was that this is very cultural; folks from the former 'east block' and the various 'asia's' all play the game very differently. The hardest part was always trying to find someone who played the same way you do - but better than you. There's never a Gretzky around when you want one! SD

It's useful to remind yourself that you're really teaching kids to think for themselves. Investment is just one of the many tools by which to do it. All our family learn't to play chess first before they learnt investing, and continue to play to this day - even at 80. You have to walk the talk. Investment isn't just buying/selling assets, it's also continually DEMONSTRATING re-investment in yourself to replace obsolescence. The message you're trying to 'sell' is that wealth is not the size of your bank account; it's ability to do what you want, when you want - without having to rely on someone else. Talk business, tell stories, and don't shield kids from the experieces of life. Bit more interesting though when one end of the family bar-bell is more 'open minded', and the other is 'by the book'. When our nephews were 17 & 20, 'grandma' arranged for them to visit a friend of hers in Paris - a retired madam in her 70's, and her daughters. While both nephews can speak french, the eldest was horrified; wheras the youngest was clearly impressed - and tried to convince me that this was a business we should be in! SD

Most people are 'sociopaths' at least some of the time, but it's not their 'normal' state. Most recognize that the only 'healthy' way to lay off a large portion of your workforce, is to be somewhat sociopathic about it. Sociopaths also don't have to be both amoral, and have zero empathy. A great many people are extremely good at evading 'authority' simply because they disagree with the 'authority' (anarchists); yet give generously at fund raising events. Yes it's a business 'expense', but the fact is - they didn't have to contribute. The above range from tax practioners through to drug/arms merchants, the intelligence community, despots, hackers and sanction breakers; the vast majority of which are state sponsored. Obviously if you get to meet one of these people - it's an interesting conversation. SD

Value proposition. You could continue doing what you're doing now, or be a HF partner. For this change of status what's your net benefit (short/medium/long term)?, your net cost (time + $)?, & are you getting paid enough for the additional risk? If you're the 'silent partner' with no say, you want the MAJORITY of annual net income paid to you - it's your money, & nobody makes anything unless you put it up. $ invested. Is this a small amount of your total wealth, or a concentrated bet with most of it? Ideally it should be large enough to keep you focused, but not enough to kill you - if it fails. Consider paying for market research on the success of HF's, and treat the cost as due diligence. SD

I agree with you from the perspective of Ethereum being a utility for smart contract execution (i.e. a cheap agile UAT interface as you describe it). I have no conviction on Ethereum. Think it's possible the platform itself plays out in a bullish way with the coin itself being worth next to nothing (marginal utility cost for smart contract execution as described in the whitepaper wachtwoord posted a while back). But can you answer this question from the perspective of a cryptocurrency being valuable as a judgment and censorship resistant store of value? The value proposition is quite literally tied to the fact that it is completely removed from government decision making. Surely this is a strong counterargument against governemnt issued cryptocurrencies? I'm actually confused that the store of value thesis doesn't click with more people. Peter Thiel basically articulates the bull thesis as we have at 36min. Just seems incredibly +expected value right now. If you want a judgement and censor resistant store of value, your clear choice is Bitcoin. It was designed for zero trust environments, and is the only cryptocoin with a futures/options market - thus allowing the holder to control price risk; and therefore very valuable. Problem is that you're rubbing shoulders with the criminal element, 'cause the same things you want are as equally valuable to them. Ulltimately 'value' is determined by the users purpose for holding Bitcoin. 'Money/inflation/store of value' has always been difficult for people to get their heads around. The 'collective' also behaves very differently from individuals, and adapts to change much more slowly. The thesis doesn't click because it doesn't have sufficient critical mass yet (Gladwell's tipping point). In value investment we typically refer to it as being 'too early', and it means just that. The thesis itself may well be bang on, and perfectly sound. SD

The NAFTA 're-negotiation' is actually a very good thing; as the fundamental changes that it will bring - could not occurr unless they were forced by a big player. Provincial trade barriers, and provincial 'fiefdoms', are not sustainable - when you're being picked off and pounded on by a 800lb gorilla. Severely restrict BC's US softwood lumber exports, and you do all of Canada an enormous favour. Nothing forces change more effectively than a sustained spike in short-term unemployment. Politicians get replaced for bringng it on, and their replacements tossed if they cannot rapidly increase employment. ie: move as many goods as possible through BC ports, and increase trade as much as possible with Asia and South America. Todays BC politician is 'best served' by status-quo; NOT change. The US is also not immune; Alaska is far away, and Putin seems determined to return the world to 'cold war'. Arctic ocean ports and rail links would be highly beneficial to both Canada/US, and the trade would be in o/g and minerals as global warming opens up the North. Global shipping can already cross the NA landmass via the NSR passage; raise the value of the goods in transit - and everybody has strong icentive to play 'nice'. https://en.wikipedia.org/wiki/Northeast_Passage In August 2012, Russian media reported that 85% of vessels transiting the Northern Sea Route in 2011 were carrying gas or oil, and 80% were high-capacity tankers Since the early 2000s, the thickness and area extent of the Arctic sea ice has experienced significant reduction, compared to the recorded averages. This has led to an increase in transit shipping. In 2011, four ships sailed the entire length of the NEP, 46 in 2012, and 19 in 2013. The number of trips is still very small compared to the thousands of ships each year through the Suez Canal. Mainstream container shipping is expected to continue to overwhelmingly use the Suez route, while niche activities like bulk shipping is expected to grow, driven by the mining industries of the Arctic. SD

Couple of points around REITs Timeframes and interest rates. High quality office buildings, industrial, etc. generally have much longer and more reliable periods of CF generation. We know from duration (bond math) that the longer the period of CF generation, the more impact a change in interest rate has. Malls. Most malls are struggling; highest/best use of the land is to knock them down, & replace with office/apartments/condos. But execution means near term writedown/demolitiion/construction costs, and new supply making it more difficult to raise market rents in the office/apartments/condo markets. The capital will come from banks, but the debt-service until the new asset starts generating - comes from existing near/medium term FCF. Less FCF to PV = lower valuation. Technology. More folks working from home, and the expected advent of blockchain technology, will materially reduce the amount of office space needed to house employees. In the near/medium term it will primarily affect financial services, and the demand for office space in those locations where financial services are concentrated - much of which is preferred REIT investment. A large FI could fairly easily reduce its existing space requirements by 1/3 to 1/2; and FI''s would also have incentive to rapidly follow each other, to force rents on the remaining space as low as possible. Higher vacancy rates = less FCF = lower valuation. Alternatives. For a long time, with the very limited national investment in infrastructure; RE has been the next best alternative. Today, infrastructure opportunities are both competitive and more widely available, diverting some of the capital flow away from the RE sector. Less demand for a REIT unit = a lower price for it. Cap rates. Ultimately the uncertainty/disruption produces a cap rate premium over the market rate, and REIT's end up looking like 'bargains' (relative to comparable bonds) for John and Jane fixed income investor. But not until the current price of REITs drop quite a bit from where they are today. SD

Key word here is legitimate. If your value proposition is 'real', Googles banning may cause some short-term disruption but truly is a non-event. Google will also have the benefit of Facebooks experience, and will be able to more precisely target the ban. Overall most would expect an aggregate drop in total demand, lowering the prices of all altcoin and token. Bitcoin being hedgeable, likely suffering the smallest decline. Not a bad thing. SD

The reality is that 'no-go' zones are much like boils. Intially the toxicity concentrates in one place & is just uncomfortable; but if you don't deal with it - it grows, and ultimately can kill you. And it's not the people - the most honest starving person in the world will steal to feed their children when there's no other choice; they have nothing to lose. SD

Etheriums network creates users for Ether; the bigger the network, the more demand for Ether. A company uses the Etherium network because it wants to use its tools to build and test out its own smart-contract blockchain applications. Once the concept has been proved with a working application, they decide their next steps. Hence Etherium is essentially an agile project management facility that allows participants to test - without having to first risk a fortune on an uncertain IT setup. A very attractive value proposition. A CBDC is just a 'digital dollar' - a CB creates/runs it; but anyone can use it, the same as anyone can use a 'paper' dollar. Most altcoin is created to pay for transactions within a specified group of users; 'cause by accepting 'this' altcoin, we can sell a ton of it today and use the proceeds to collectively develop the business (essentially seignorage). But if I can pay with a CBDC the recipient can spend that CBDC anywhere; if I pay with Altcoin the recipient can only use it within the group of users. Hence if the user groups business is fairing poorer than the economy overall (most cases), the last thing a recipient wants is this restrictive altcoin. The altcoin 'devalues' relative to CBDC, and gets their via a 'price' collapse. SD

Basically ... if I can pay for any transaction with a CBDC (e-Krona, e-$, etc.) - what do I need the altcoin for? The altcoin becomes akin to a $Z - very nominal value IF you can find someone willing to accept them, and pay with a wheelbarrow full - or 1 CBDC. Bitcoin and Etherium (post Casper) are probably exceptions, primarily because there is at least some real use for them. Ether has value because anyone using the Etherium network can use Ether to settle transactions created via the Etherium smart-contract writer. Etherium is esentially a high security cloud provider of blockchain smart-contract applications running on a distributed ledger, in a private network. As long as a users transaction volume is small, and the network keeps expanding (increasing its value to all), it's an excelent sandbox to protoype new applications on; hence there is an actual functional purpose (& demand) for Ether. The FI crypto will very likely be determined by whatever the R3 Consortium chooses to use. GS would like it to be their patented SETLCoin, others would prefer something more akin to a global CBDC. It will also very likely be a 'private' - versus 'public' currency that you or I can buy. Rather than spreading your research 'wide', you might want to focus on Etherium. Understand how Ether is issued today, the relative merits of Etherium itself, and what would change were Casper implemented. Then assess against comparable altcoin, to develop an investment thesis - it might well put you through school. Obviously do your own DD, we are not making an investment recommendation. SD

Re GS article. At this point you should know enough to recognize that cryptocurrency ISN'T blockchain - it is just ONE of many blockchain applications. Blockchain generally doesn't change output (product or service), it just changes the inputs/process (the pipes) by which to produce it; we don't benefit from new mousetrtaps - it merely costs a lot less to make those that we already have. Very different to most progress where it's always output, better than what was. All crypto is just a 'unit of account' and a payment system. Bitcoin is unique in that it also has TWO 'stores of value' - value to the criminal element, and it's value as 'digital gold'; how much it's worth - is in the eye of the buying beholder. Keep your Bitcoin only at Mt Gox, and you should be pretty safe. As CBDC (e-Krona) enters the picture, most of these will also crash to well < 1$/euro per unit - simply because they aren't backed with the far better 'full faith and credit' of a CB. 'Supply' here, also isn't what it 'means' everywhere else. The more it comes from ICO rounds (Etherium), versus entirely mining (Bitcoin), the more of it there is - and the less volatile the pricing. Once Etherrium brings in Casper, Ether will start to price very differently ;) SD