Cryptocurrencies

[gfp]

Does BTC demonstrate tax-loss selling patterns in losing years?  Or are all you crypto cowboys not paying tax on this stuff?  

[dealraker]

Not referring to those posting here, but crypto enthusiasts are like medival Scottland clans in that they'd much rather war between themselves than battle outsiders.  Only religion gets more intense debate.  

[rkbabang]

22 hours ago, Sweet said:

I’m sorry, but Bitcoin has no objective intrinsic value.  It just doesn’t.

20 hours ago, Sweet said:

I don’t think you know what intrinsic value is, otherwise you wouldn’t be posting that article.

 

The value in the article is subjective in nature,

 

 

You keep saying "intrinsic value", "intrinsic value", "intrinsic value", ......

 

The first thing you need to understand about the reality of the universe you inhabit is that there is no such thing as "intrinsic value", there never has been, and there never will be.  "Intrinsic Value" is impossible, because all value is subjective.  

 

Try this thought experiment.  Aliens land their ship in your back yard and ask you to explain this concept of "intrinsic value" to them and ask you to give them an example of something that is intrinsically valuable.  You tell them the US Dollar.  They say "but we have no use for those, they aren't valuable to us, and studying your history we see that even humans don't value them the way they used to since they have lost 99% of their purchasing power in the last century, so that is hardly something that has intrinsic value."  You say "gold" and they laugh and say "we can stop by a trillion different rocks in space and pick up as much of that as we please why would we want that?"   You say diamonds and they laugh again saying "we can manufacture them any time we want why would we value such things?"   You say a company which produces valuable products and has earnings.  Once again they laugh as say that those products are of no use to them and the so called earnings are in a currency that is of no use to them.   

 

All value is subjective.  When you fully internalize this completely you look at the world in a different way.  There are some things that a lot of people happen to value highly now, but there is nothing that "everyone" values.  Even the same person (or alien) will value things differently at different times.  Things that are widely valued now may not be widely valued in the future because of differing tastes, trends of history, or technological change.  Oil was just a messy nuisance until technological advancement made it valuable to many people.  Further technological advancements could very well make it valueless to everyone again.   Currencies come and go all the time in the span of centuries.  Companies come and go (Sears used to be extremely valuable, but there was nothing intrinsic about it as it is now gone).  Nations, kingdoms, and empires come and go, none of them have intrinsic anything.  If your argument for, or against, anything is the property of "intrinsic value", then you have a completely different view of our existence than I do.

 

 

 

Edited December 26, 2022 by rkbabang

[wachtwoord]

2 hours ago, dealraker said:

Not referring to those posting here, but crypto enthusiasts are like medival Scottland clans in that they'd much rather war between themselves than battle outsiders.  Only religion gets more intense debate.  

 

That's because what you see as "amongst each other" in reality isn't at all. Most things marketed as "crypto" are just scams, lying to get a place in the sun. 

 

Eg equating Bitcoin with Ethereum is the same as saying Amazon and pets.com are the same thing.

[ValueArb]

2 hours ago, rkbabang said:

 

 

You keep saying "intrinsic value", "intrinsic value", "intrinsic value", ......

 

The first thing you need to understand about the reality of the universe you inhabit is that there is no such thing as "intrinsic value", there never has been, and there never will be.  "Intrinsic Value" is impossible, because all value is subjective.  

 

Try this thought experiment.  Aliens land their ship in your back yard and ask you to explain this concept of "intrinsic value" to them and ask you to give them an example of something that is intrinsically valuable.  You tell them the US Dollar.  They say "but we have no use for those, they aren't valuable to us, and studying your history we see that even humans don't value them the way they used to since they have lost 99% of their purchasing power in the last century, so that is hardly something that has intrinsic value."  You say "gold" and they laugh and say "we can stop by a trillion different rocks in space and pick up as much of that as we please why would we want that?"   You say diamonds and they laugh again saying "we can manufacture them any time we want why would we value such things?"   You say a company which produces valuable products and has earnings.  Once again they laugh as say that those products are of no use to them and the so called earnings are in a currency that is of no use to them.   

 

All value is subjective.  When you fully internalize this completely you look at the world in a different way.  There are some things that a lot of people happen to value highly now, but there is nothing that "everyone" values.  Even the same person (or alien) will value things differently at different times.  Things that are widely valued now may not be widely valued in the future because of differing tastes, trends of history, or technological change.  Oil was just a messy nuisance until technological advancement made it valuable to many people.  Further technological advancements could very well make it valueless to everyone again.   Currencies come and go all the time in the span of centuries.  Companies come and go (Sears used to be extremely valuable, but there was nothing intrinsic about it as it is now gone).  Nations, kingdoms, and empires come and go, none of them have intrinsic anything.  If your argument for, or against, anything is the property of "intrinsic value", then you have a completely different view of our existence than I do.

 

 

 

 

So there is intrinsic value can't exist if aliens have a different social and economic model? My guess is Buffett is going to need to learn some manual labor skills once the aliens take over.

 

First, currency, gold and diamonds have utility, not intrinsic value.

 

Intrinsic value is merely predictable future cash flows. They don't have to last hundreds of years, a one year bond has an intrinsic value. Any business that is likely to continue to produce cash flows has intrinsic value, doesn't matter if those cash flows last a few months, a few years or a few decades.

 

You can't debunk "intrinsic value" by claiming it requires characteristics it doesn't have. 

[Sweet]

3 hours ago, rkbabang said:

 

 

You keep saying "intrinsic value", "intrinsic value", "intrinsic value", ......

 

The first thing you need to understand about the reality of the universe you inhabit is that there is no such thing as "intrinsic value", there never has been, and there never will be.  "Intrinsic Value" is impossible, because all value is subjective.  

 

Try this thought experiment.  Aliens land their ship in your back yard and ask you to explain this concept of "intrinsic value" to them and ask you to give them an example of something that is intrinsically valuable.  You tell them the US Dollar.  They say "but we have no use for those, they aren't valuable to us, and studying your history we see that even humans don't value them the way they used to since they have lost 99% of their purchasing power in the last century, so that is hardly something that has intrinsic value."  You say "gold" and they laugh and say "we can stop by a trillion different rocks in space and pick up as much of that as we please why would we want that?"   You say diamonds and they laugh again saying "we can manufacture them any time we want why would we value such things?"   You say a company which produces valuable products and has earnings.  Once again they laugh as say that those products are of no use to them and the so called earnings are in a currency that is of no use to them.   

 

All value is subjective.  When you fully internalize this completely you look at the world in a different way.  There are some things that a lot of people happen to value highly now, but there is nothing that "everyone" values.  Even the same person (or alien) will value things differently at different times.  Things that are widely valued now may not be widely valued in the future because of differing tastes, trends of history, or technological change.  Oil was just a messy nuisance until technological advancement made it valuable to many people.  Further technological advancements could very well make it valueless to everyone again.   Currencies come and go all the time in the span of centuries.  Companies come and go (Sears used to be extremely valuable, but there was nothing intrinsic about it as it is now gone).  Nations, kingdoms, and empires come and go, none of them have intrinsic anything.  If your argument for, or against, anything is the property of "intrinsic value", then you have a completely different view of our existence than I do.

 

 

 

Don’t agree @rkbabang
 

Are you telling me a US government bond paying a coupon has no intrinsic value and it’s all subjective?

I agree that elements of valuation are subjective but there is an intrinsic anchor to many businesses and bonds.

 

I’m not arguing for absolutism about ‘intrinsic value’ - it’s weird that you would think I am.

 

Edited December 26, 2022 by Sweet

[SharperDingaan]

To many of those in finance; Asset Value = PV Future Cash Flows. That's it !!  No think dogma.

No cash flow? there's no asset.

 

Yet as soon as we do an acquisition, it no longer applies. Whenever we buy an asset above market price, we record the price difference on our books as 'goodwill', supported with a schedule of expected synergy savings; under US GAAP that difference is whatever we say it is - and we amortize it over 40yrs. Under IFRS, it's prove it or lose it, annually.

 

Total asset value = market price + 'goodwill'.

Goodwill = the PV of your 'minds eye' future synergy savings, evidenced via a cash payment. Isn't that identical to what Intrinsic Value is - the PV of 'minds eye' future cash flow, evidenced via a cash payment (a buy/sell of BTC)?

 

Point? Intrinsic value will be a different number for different people, and it's just a PV of expected future benefits (not just future cash flow). You either get that, or you just don't - no think dogma wins.

 

SD 

   

Edited December 26, 2022 by SharperDingaan

[wachtwoord]

2 hours ago, Sweet said:

Don’t agree @rkbabang
 

Are you telling me a US government bond paying a coupon has no intrinsic value and it’s all subjective?

I agree that elements of valuation are subjective but there is an intrinsic anchor to many businesses and bonds.

 

I’m not arguing for absolutism about ‘intrinsic value’ - it’s weird that you would think I am.

 

 

indeed US bonds have no intrinsic value as they are denoted in USD and USD has no intrinsic value (infinite USD can be printed so the intrinsic value approaches zero)

 

Note this is different for equities as they are not bound to earnings in one particular currency now or in the future.

Edited December 27, 2022 by wachtwoord

[Parsad]

6 hours ago, rkbabang said:

 

 

You keep saying "intrinsic value", "intrinsic value", "intrinsic value", ......

 

The first thing you need to understand about the reality of the universe you inhabit is that there is no such thing as "intrinsic value", there never has been, and there never will be.  "Intrinsic Value" is impossible, because all value is subjective.  

 

Try this thought experiment.  Aliens land their ship in your back yard and ask you to explain this concept of "intrinsic value" to them and ask you to give them an example of something that is intrinsically valuable.  You tell them the US Dollar.  They say "but we have no use for those, they aren't valuable to us, and studying your history we see that even humans don't value them the way they used to since they have lost 99% of their purchasing power in the last century, so that is hardly something that has intrinsic value."  You say "gold" and they laugh and say "we can stop by a trillion different rocks in space and pick up as much of that as we please why would we want that?"   You say diamonds and they laugh again saying "we can manufacture them any time we want why would we value such things?"   You say a company which produces valuable products and has earnings.  Once again they laugh as say that those products are of no use to them and the so called earnings are in a currency that is of no use to them.   

 

All value is subjective.  When you fully internalize this completely you look at the world in a different way.  There are some things that a lot of people happen to value highly now, but there is nothing that "everyone" values.  Even the same person (or alien) will value things differently at different times.  Things that are widely valued now may not be widely valued in the future because of differing tastes, trends of history, or technological change.  Oil was just a messy nuisance until technological advancement made it valuable to many people.  Further technological advancements could very well make it valueless to everyone again.   Currencies come and go all the time in the span of centuries.  Companies come and go (Sears used to be extremely valuable, but there was nothing intrinsic about it as it is now gone).  Nations, kingdoms, and empires come and go, none of them have intrinsic anything.  If your argument for, or against, anything is the property of "intrinsic value", then you have a completely different view of our existence than I do.

 

 

 

 

So you're saying that aliens have no use for anything on earth.  Wouldn't that include crypto?  So the discussion around "intrinsic value" has absolutely zero meaning...regardless of what we are talking about.

 

The truth is that in OUR world..."intrinsic value" matters immensely.  Since we do find gold useful...our fiat currencies useful...and the products/goods our corporations make are very useful to us.  Aliens be damned!  Cheers!

[rkbabang]

20 minutes ago, wachtwoord said:

 

indeed US bonds have no intrinsic value as they are denoted in USD and USD has no intrinsic value (infinite USD can be printed so the intrinsic value approaches zero)

 

Note this is different for equities as they are not bound to earnings in one particular currency now or in the future.

Thanks Watchword.  It seem the concept that All value is subjective is a hard one for people to understand. If write a piece of paper which says it pays 3 purple rocks per month for 12 months, then that piece of paper is only valuable to you if you value the purple rocks.  If all value is subjective, then the value of anything which backs your investment is subjective. Like I said you need to internalize the concept that all value is subjective, “all” meaning everything that has ever existed or ever will exist.  The question “how valuable is it” should never be asked, because “value” isn’t a property for which it is possible for anything to have. Value is a judgement by an individual person. So the proper questions are: Who values it? How much do they value it? How much are they likely to value it in the future? And why?

[Sweet]

3 minutes ago, wachtwoord said:

 

indeed US bonds have no intrinsic value as they are denoted in USD and USD has no intrinsic value (infinite USD can be printed so the intrinsic value approaches zero)

 

Note this is different for equities as they are not bound to earnings in one particular currency now or in the future.

 

 

Silliness.  Just because infinite USD can be printed at some point in the future, does not mean USD has no use today, or no purchasing power today.  Truly daft.

[wachtwoord]

9 hours ago, Sweet said:

 

 

Silliness.  Just because infinite USD can be printed at some point in the future, does not mean USD has no use today, or no purchasing power today.  Truly daft.

Once again you fail at reading. I wrote it has no intrinsic value. Of course has purchasing power today. Btw so does Bitcoin

 

Forest and the trees.

[wachtwoord]

10 hours ago, rkbabang said:

Thanks Watchword.  It seem the concept that All value is subjective is a hard one for people to understand. If write a piece of paper which says it pays 3 purple rocks per month for 12 months, then that piece of paper is only valuable to you if you value the purple rocks.  If all value is subjective, then the value of anything which backs your investment is subjective. Like I said you need to internalize the concept that all value is subjective, “all” meaning everything that has ever existed or ever will exist.  The question “how valuable is it” should never be asked, because “value” isn’t a property for which it is possible for anything to have. Value is a judgement by an individual person. So the proper questions are: Who values it? How much do they value it? How much are they likely to value it in the future? And why?

 

Indeed the right question. And the answer is that it will encompass value for a long time since it's properties are inherently useful to humans as long as societal structure resembles anything history has ever seen and there is no enourmous technological collapse. Two relatively safe assumptions (what other idea on this board does not require both of these to hold true for quite a while?).

 

Intrinsic value means exactly this: that the inherent characteristics of something provide value for humans in the general non-transitive sense. 

[Sweet]

5 hours ago, wachtwoord said:

Once again you fail at reading. I wrote it has no intrinsic value. Of course has purchasing power today. Btw so does Bitcoin

 

Forest and the trees.

 

It's your failure.  You have assumed that I mistakenly wrote purchasing power - I didn't.

 

I would agree that USD by itself has no intrinsic value, but the bonds do because they produce something.  If the bonds paid in bitcoin, I would agree that the bond has intrinsic value provided bitcoin could be traded for real world produce.

 

The silliness I'm referring to is your talk about USD printing, and also generally between the comparison of USD to bitcoin.   The former being backed by the huge economic activity of the USA, with many global financial transactions being conducted in dollars, the latter not.

 

How is bitcoin primarily priced again - largely priced against USD.  I wonder why that is.

 

Then there is this gem:

 

• *"Note this is different for equities as they are not bound to earnings in one particular currency now or in the future."*

 

You don't seem to realise that bonds can be paid in other currencies, many countries issue euro or dollar bonds even thought it is not their own currency.

 

Payments from US bonds could also be immediately converted to another currency, it's not like anyone is bound to keep the proceeds in one denomination.

 

These risks you are referring are considered as part of the process of determining the intrinsic value of a bond.

 

You obviously don't get it.

 

 

 

 

 

 

Edited December 27, 2022 by Sweet

[Sweet]

5 hours ago, wachtwoord said:

Intrinsic value means exactly this: that the inherent characteristics of something provide value for humans in the general non-transitive sense. 

 

 

That is not the definition of intrinsic valuation in investing.

 

What you are referring to are intangibles properties that we / others assign value. 

 

Balance sheets have intangible assets for this very reason, pulled apart and in its own separate category from income and cashflows.

 

Nobody is arguing that there is no value to intangible assets, just like nobody is arguing that there are no desirable characteristics of bitcoin, or that others don't find bitcoin valuable.

 

The argument here, just to define it again, is that bitcoin by itself has no intrinsic value.

 

Your problem is you think that intrinsic value is equivalent to market value or your own subjective value. 

 

It isn't.

 

 

Edited December 27, 2022 by Sweet

[wachtwoord]

1 hour ago, Sweet said:

 

It's your failure.  You have assumed that I mistakenly wrote purchasing power - I didn't.

 

I would agree that USD by itself has no intrinsic value, but the bonds do because they produce something.  If the bonds paid in bitcoin, I would agree that the bond has intrinsic value provided bitcoin could be traded for real world produce.

 

The silliness I'm referring to is your talk about USD printing, and also generally between the comparison of USD to bitcoin.   The former being backed by the huge economic activity of the USA, with many global financial transactions being conducted in dollars, the latter not.

 

How is bitcoin primarily priced again - largely priced against USD.  I wonder why that is.

 

Then there is this gem:

 

• *"Note this is different for equities as they are not bound to earnings in one particular currency now or in the future."*

 

You don't seem to realise that bonds can be paid in other currencies, many countries issue euro or dollar bonds even thought it is not their own currency.

 

Payments from US bonds could also be immediately converted to another currency, it's not like anyone is bound to keep the proceeds in one denomination.

 

These risks you are referring are considered as part of the process of determining the intrinsic value of a bond.

 

You obviously don't get it.

 

 

 

 

 

 

Besides you having everything backwards I really wonder what you are doing in this topic. What goal does it have?

 

I wondered the same in the Altius Minerals for some people back in the day. 

 

Bonds don't produce anything by definition btw. It's hard to be as wrong on so many things as you are.

[wachtwoord]

59 minutes ago, Sweet said:

 

 

That is not the definition of intrinsic valuation in investing.

 

What you are referring to are intangibles properties that we / others assign value. 

 

Balance sheets have intangible assets for this very reason, pulled apart and in its own separate category from income and cashflows.

 

Nobody is arguing that there is no value to intangible assets, just like nobody is arguing that there are no desirable characteristics of bitcoin, or that others don't find bitcoin valuable.

 

The argument here, just to define it again, is that bitcoin by itself has no intrinsic value.

 

Your problem is you think that intrinsic value is equivalent to market value or your own subjective value. 

 

It isn't.

 

 

 

Lol what. YOU think intrinsic value is market value. You're the one that believes USD has intrinsic value because the market currently attributes purchasing power to it.

 

I say it does not because it has no properties giving it intrinsic value. Bitcoin (and gold before economically viable asteroid mining) does have properties that give it intrinsic value. The market price has nothing to do with it.

[backtothebeach]

Why don't you just agree to disagree on the definition of intrinsic value. Jeez.

 

https://www.investopedia.com/terms/i/intrinsicvalue.asp

 

"Financial analysis uses cash flow to determine the intrinsic, or underlying, value of a company or stock." (Sweet)

"There is no universal standard for calculating the intrinsic value of a company or stock. ...

While [financial analysts] may build valuation models using qualitative, quantitative and perceptual business factors..." (wachtwoord)

"...the metric often used in calculations for intrinsic value is discounted cash flows." (Sweet)

[Sweet]

37 minutes ago, wachtwoord said:

Besides you having everything backwards I really wonder what you are doing in this topic. What goal does it have?

 

I wondered the same in the Altius Minerals for some people back in the day. 

 

Bonds don't produce anything by definition btw. It's hard to be as wrong on so many things as you are.

 

Bonds produce cashflow.

 

Bitcoin produces nothing.

 

34 minutes ago, wachtwoord said:

 

Lol what. YOU think intrinsic value is market value. You're the one that believes USD has intrinsic value because the market currently attributes purchasing power to it.

 

I say it does not because it has no properties giving it intrinsic value. Bitcoin (and gold before economically viable asteroid mining) does have properties that give it intrinsic value. The market price has nothing to do with it.

 

No I didn't say those things.

 

You say its hard to be as wrong as I am, but you can't get my views correct, even why they are written down in this thread.

 

Edited December 27, 2022 by Sweet

[Sweet]

22 minutes ago, backtothebeach said:

Why don't you just agree to disagree on the definition of intrinsic value. Jeez.

 

https://www.investopedia.com/terms/i/intrinsicvalue.asp

 

"Financial analysis uses cash flow to determine the intrinsic, or underlying, value of a company or stock." (Sweet)

"There is no universal standard for calculating the intrinsic value of a company or stock. ...

While [financial analysts] may build valuation models using qualitative, quantitative and perceptual business factors..." (wachtwoord)

"...the metric often used in calculations for intrinsic value is discounted cash flows." (Sweet)

 

 

This forum is the 'value investor's haven'.

 

Whilst I accept that there is no one single agreed definition of intrinsic value, I know that it is not whatever @wachtwoord thinks the value should be.

 

The terminology of 'intrinsic value' is one used by value investors for the purposes of objectively as possible valuing an asset, typically using earnings, dividends, coupons etc.

 

I agree with what investopedia have written on intrinsic value:

• "While [financial analysts] may build valuation models using qualitative, quantitative and perceptual business factors, the metric often used in calculations for intrinsic value is discounted cash flows".

 

'Intrinsic value' means something in the value investing world, and it is different from pricing, or market value, or whatever other type of value that wachtwoord thinks bitcoin has.

 

Edited December 27, 2022 by Sweet

[wachtwoord]

1 hour ago, Sweet said:

Bonds produce cashflow.

 

Bitcoin produces nothing.

 

 

Bonds produce nothing.

Bitcoin doesn't produce anything either, but Bitcoin IS something. 

 

1 hour ago, Sweet said:

No I didn't say those things.

 

Now you don't read what you write yourself anymore

I even quoted you saying it.

 

Let's see whether this time I succeed in not responding to you further

[ValueArb]

7 minutes ago, wachtwoord said:

 

Bonds produce nothing.

Bitcoin doesn't produce anything either, but Bitcoin IS something. 

 

 

Now you don't read what you write yourself anymore

I even quoted you saying it.

 

Let's see whether this time I succeed in not responding to you further

 

Bonds are claims on cash flows and assets of the issuer.

 

Bitcoin is a claim on nothing.

[ValueArb]

20 hours ago, SharperDingaan said:

To many of those in finance; Asset Value = PV Future Cash Flows. That's it !!  No think dogma.

No cash flow? there's no asset.

 

Yet as soon as we do an acquisition, it no longer applies. Whenever we buy an asset above market price, we record the price difference on our books as 'goodwill', supported with a schedule of expected synergy savings; under US GAAP that difference is whatever we say it is - and we amortize it over 40yrs. Under IFRS, it's prove it or lose it, annually.

 

Total asset value = market price + 'goodwill'.

Goodwill = the PV of your 'minds eye' future synergy savings, evidenced via a cash payment. Isn't that identical to what Intrinsic Value is - the PV of 'minds eye' future cash flow, evidenced via a cash payment (a buy/sell of BTC)?

 

Point? Intrinsic value will be a different number for different people, and it's just a PV of expected future benefits (not just future cash flow). You either get that, or you just don't - no think dogma wins.

 

SD 

   

 

We shouldn't confuse GAAP accounting rituals with our definition of Intrinsic Value.

 

What makes value investing worthwhile is typically finding situations where GAAP measurements of cash flows, asset values and liabilities differ from reality. A value investor understands there are three measures of value, Market Price, GAAP, and Intrinsic Value, and market beating returns are often found when Price & GAAP differ significantly from IV.

 

Now different people may measure IV differently, that doesn't mean it doesn't exist. What that means is sometimes its hard to know what the IV of an investment is, but that doesn't mean it doesn't exist. You just lack the information to make your IV estimate trustworthy. 

 

Since no crypto has claim to any future cash flows, all crypto has an IV of zero. That doesn't mean some crypto (BTC, ETH) doesn't have utility, esp. for people trapped in countries with terrible governance. But it doesn't give either of them an intrinsic value.

[Sweet]

26 minutes ago, wachtwoord said:

 

Bonds produce nothing.

Bitcoin doesn't produce anything either, but Bitcoin IS something. 

 

 

Now you don't read what you write yourself anymore

I even quoted you saying it.

 

Let's see whether this time I succeed in not responding to you further

“Bond produce nothing” - incorrect.  Just silliness.

 

”Now you don't read what you write yourself anymore  I even quoted you saying it” - I never said market value is intrinsic value, and I didn’t say USD has intrinsic value, so I don’t know what you are talking about and neither do you.

 

Edited December 27, 2022 by Sweet

[wachtwoord]

1 hour ago, ValueArb said:

 

Bonds are claims on cash flows and assets of the issuer.

 

Bitcoin is a claim on nothing.

 

Bitcoin is the thing itself.

 

It's like saying a gold bar has no IV because it does not constitute a claim on something else.

 

A bond is a claim on something with no IV.