Investment showdown -- beyond the Roth, SDP, & TSP

[FLEA]

19 minutes ago, Lord Ratner said:

She'll be popular due to a failure of our institutions to protect the American Dream for regular citizens, rise because she is willing to say politically unpopular things that alienate her from the establishment but ingratiate her with her base, use social media to bypass the usual structures and speak directly to her followers, lack any sort of real understanding of the system she wishes to change, continually say things that are factually wrong, not offer a face-saving route for her opposition to side with her, and ultimately fizzle out because she can't make the transition from activist to diplomat and appeal to a broad spectrum of voters.

Wait are we talking about AOC or Trump I can't tell? 

[skosh]

17 minutes ago, FLEA said:

Wait are we talking about AOC or Trump I can't tell? 

Yes.

Back on topic, purchased my first crypto today through PayPal.  Went with Ethereum, but for a very small amount... just getting my foot in the door.  Any thoughts on how it compares to the other cryptos available on PayPal? (Bitcoin, Litecoin, and Bitcoin Cash)

[Lord Ratner]

27 minutes ago, FLEA said:

Wait are we talking about AOC or Trump I can't tell? 

Well, I did just say she's the (D) version of Trump... So that was kinda the point.

[Lord Ratner]

8 minutes ago, skosh said:

Yes.

Back on topic, purchased my first crypto today through PayPal.  Went with Ethereum, but for a very small amount... just getting my foot in the door.  Any thoughts on how it compares to the other cryptos available on PayPal? (Bitcoin, Litecoin, and Bitcoin Cash)

I decided I was going to get into Bitcoin when it was around 12k after the crash, but didn't end up pulling the trigger before it went parabolic. I do think there's a long-term proposition for Bitcoin, analogous to gold and silver. I don't think it's ever going to replace currency because governments are never going to allow their currencies to be replaced, but you're not allowed to spend gold and silver at the grocery store either.

 

I happen to have a fancy new graphics card, so I'm mining etherium (ether), but that's only like 10 bucks a day. I still intend to buy into crypto on a meaningful level, but I just can't make any sort of justification for either of them at their current levels.

 

I think it's going to come down to whether or not you believe there's a market correction on the horizon. If there is, then cash is the only safe haven. Take a look at March and look at what happened to the usual places to hide your money when the stock market goes bad. All of them were down. The market is so heavily leveraged right now that when a real correction occurs, it seems like everybody is forced to sell everything in order to cover their bets. And considering how decimated both silver and crypto were during the last downturn, I would not be surprised to see a similar phenomenon. Granted I don't think it will go back down to 5,000.

 

Also, I would seriously look at Kraken as your exchange. Much more flexibility, much better terms, and the most interesting vision of the way forward. I believe they're somewhat close to getting the first no kidding crypto bank opened up in Wyoming, which will allow for a level of flexibility and exchange between regular and cryptocurrencies that has not existed before.

[Ryder1587]

I use Coinbase Pro and I like it a lot. I have 45% in each of Bitcoin and ethereum and the rest in small random coins. I think ether has the highest upside for the year at this point.  The hard part is watching the volatility and not panic selling and just learning the cycles. The crash shouldn’t happen until the end of this year. Overall it’s speculative but I have 145% returns since March. 

[FLEA]

43 minutes ago, Lord Ratner said:

I decided I was going to get into Bitcoin when it was around 12k after the crash, but didn't end up pulling the trigger before it went parabolic. I do think there's a long-term proposition for Bitcoin, analogous to gold and silver. I don't think it's ever going to replace currency because governments are never going to allow their currencies to be replaced, but you're not allowed to spend gold and silver at the grocery store either.

 

I happen to have a fancy new graphics card, so I'm mining etherium (ether), but that's only like 10 bucks a day. I still intend to buy into crypto on a meaningful level, but I just can't make any sort of justification for either of them at their current levels.

 

I think it's going to come down to whether or not you believe there's a market correction on the horizon. If there is, then cash is the only safe haven. Take a look at March and look at what happened to the usual places to hide your money when the stock market goes bad. All of them were down. The market is so heavily leveraged right now that when a real correction occurs, it seems like everybody is forced to sell everything in order to cover their bets. And considering how decimated both silver and crypto were during the last downturn, I would not be surprised to see a similar phenomenon. Granted I don't think it will go back down to 5,000.

 

Also, I would seriously look at Kraken as your exchange. Much more flexibility, much better terms, and the most interesting vision of the way forward. I believe they're somewhat close to getting the first no kidding crypto bank opened up in Wyoming, which will allow for a level of flexibility and exchange between regular and cryptocurrencies that has not existed before.

Interesting idea since the whole point of crypto currencies was to remove the neccessity of banks after the 2008 financial crash. 

As far as it replacing regular currency, that has more to do with merchants than governments. If merchants began to accept it in mass, I think the USG is going to have a very hard time slowing it down. 

So things that will make it difficult though is the requirement to pay people in USD and pay taxes in USD. But you could also get around that by paying people minimum wage in USD and the rest of their wage in crypto. 

 

[Lord Ratner]

11 minutes ago, FLEA said:

Interesting idea since the whole point of crypto currencies was to remove the neccessity of banks after the 2008 financial crash. 

As far as it replacing regular currency, that has more to do with merchants than governments. If merchants began to accept it in mass, I think the USG is going to have a very hard time slowing it down. 

So things that will make it difficult though is the requirement to pay people in USD and pay taxes in USD. But you could also get around that by paying people minimum wage in USD and the rest of their wage in crypto. 

 

Agreed, but I suspect once we come even remotely close to crypto being accepted as currency, the govt will step in.

 

There's a 0% chance the governments of the world relinquish their ability to manipulate the currency. I think any belief to the contrary requires ignoring the last 50 years of fiscal policy.

Edited February 9, 2021 by Lord Ratner

[FLEA]

41 minutes ago, Lord Ratner said:

Agreed, but I suspect once we come even remotely close to crypto being accepted as currency, the govt will step in.

 

There's a 0% chance the governments of the world relinquish their ability to manipulate the currency. I think any belief to the contrary requires ignoring the last 50 years of fiscal policy.

Right but the question is how? What are they going to do short of mandating US companies pay in USD and shutting off the internet? 

[Swamp Yankee]

17 hours ago, Majestik Møøse said:

How could you not? Investing 10% of that salary at 7% ROR yields $1m liquid in 23 years. Not even counting real estate appreciation, which is how most people get there. Inflation not accounted for.

https://smartasset.com/investing/investment-calculator#OCfdEpDGFU

I'm assuming you are being sarcastic.  $1m is chump change.  

[Lord Ratner]

3 hours ago, FLEA said:

Right but the question is how? What are they going to do short of mandating US companies pay in USD and shutting off the internet? 

Just disallow US companies from accepting crypto as payment. I don't think it'll be difficult for them to do. Making it go away? Super hard, maybe impossible. But making it too inconvenient to use for practical purposes (like it is now), much easier.

 

It can be a store of value like gold, but if crypto replaces the USD, it'll be a blockchain that the .gov controls, can add or remove coins at will, control the mining fees, and ultimately centralize the mining operation. It's just too far of a reach for me to believe they would allow for the decentralization of money. And the "how" would be the easy part.

[Majestik Møøse]

3 hours ago, Swamp Yankee said:

I'm assuming you are being sarcastic.  $1m is chump change.  

Yeah, I get it, $3m is the new $1m.  But there is a surprising divide, even amongst military officers, between those with no investments and those who know how to make money work for them.  So I never know which one I’m talking to, although I guess it’s the latter in this thread.

Some pilot friends of mine were giving Biden shit for having a $9m net worth - as if it were indicative of corruption - even though he has made the equivalent of six figures since the 1970s.

[Dangerzone]

7 hours ago, skosh said:

Yes.

Back on topic, purchased my first crypto today through PayPal.  Went with Ethereum, but for a very small amount... just getting my foot in the door.  Any thoughts on how it compares to the other cryptos available on PayPal? (Bitcoin, Litecoin, and Bitcoin Cash)

Plenty of upside in all of those projects, however, private institutions (smart money) are not buying litecoin, eth, or anything else besides BTC. Also BTC is the only one with a fixed supply—21m coins. Forget bitcoin being used as a world currency, but imagine half of the SP500 companies putting some exposure on their balance sheet, TD Ameritrade, Fidelity, Merryl, etc. allowing you to invest your 401k in BTC, it will be used as a store of value to fight inflation akin to gold... Just my .02 don’t waste your time on anything besides BTC or ETH unless you’re good at researching undervalued altcoins and have a high risk tolerance. 

[Negatory]

8 hours ago, Dangerzone said:

Also BTC is the only one with a fixed supply—21m coins.

Entirely untrue. ADA, BCH, BNB, XRP, LTC, LINK, XLM. All have fixed max supplies, and those are just the top 10. There are hundreds of cryptocurrencies with similar structures to BTC.

BTC is actually still in the process of inflation, by the way, with 18.6M currently mined and 2.4M still to be produced in the future.

On a side note, tons of people - myself included - hate BTC when compared to many other cryptos. Originally envisioned as “peer to peer cash” that wouldn’t require a bank, it now takes at least 10 minutes to send most transactions and costs $20 regardless of how much you’re sending.

Sending $10 to your bro? That will be $30. Oh, also, the energy costs are INSANE and entirely unsustainable, but that’s another topic.

Elon Musk investing in BTC actually convinced me that it really is dumb money that makes the world go round. But if Tesla can exist with a P/E ratio of 1300, there’s apparently a lot of dumb money. People will pump whatever the mainstream media will talk about. And now that people on BO are speculating about BTC, it’s probably getting close to time to sell.

Another fun fact: it takes approximately 4 times more energy to send a BTC transaction over the network than it does to charge a Tesla.

Source: have a pretty wide crypto “portfolio” and have for years. Was invested in BTC but am ENTIRELY divested from it for the last 4 years. Still made a little over 1100% this year on crypto currencies that aren’t so useless. 

[Standby]

Anybody have recommendations on a tax pro they use consistently? Have been using the MilOneSource H&R Block service for quite a while but it seems more difficult every year to accurately file. 

[Dangerzone]

13 hours ago, Negatory said:

BTC is actually still in the process of inflation, by the way, with 18.6M currently mined and 2.4M still to be produced in the future.

it now takes at least 10 minutes to send most transactions and costs $20 regardless of how much you’re sending.

Sending $10 to your bro? That will be $30. Oh, also, the energy costs are INSANE and entirely unsustainable, but that’s another topic.

Good points, that’s the beauty of the whole thing is it costs energy to produce those blocks and every 4 years the reward is cut in half. Yeah BTC while 12 years in is still kind of equivalent to early stages of the internet, still has a lot of development to happen. BTC was not intended for you to buy chocolate with it as you eluded to due to the high and slow transaction costs, what it lacks with that it gains in security from how the blockchain and cryptology was setup. 
You should checkout the lightning network and what strike is going to do, if you haven’t already heard about that. Very interesting stuff.

[Negatory]

3 hours ago, Dangerzone said:

Good points, that’s the beauty of the whole thing is it costs energy to produce those blocks and every 4 years the reward is cut in half. Yeah BTC while 12 years in is still kind of equivalent to early stages of the internet, still has a lot of development to happen. BTC was not intended for you to buy chocolate with it as you eluded to due to the high and slow transaction costs, what it lacks with that it gains in security from how the blockchain and cryptology was setup. 
You should checkout the lightning network and what strike is going to do, if you haven’t already heard about that. Very interesting stuff.

Yeah, I get where you’re coming from but count me as a skeptic. Where some see security and beauty, I see an imperfect technology that didn’t fulfill its original vision with significantly better alternatives (personally, for example, I believe eth will eclipse BTC in market cap in the next few years). It will be interesting to see if they can actually make second layer things like lightning network make sense or complete their rebranding to digital gold.

[Swamp Yankee]

On 2/9/2021 at 10:30 PM, Majestik Møøse said:

Yeah, I get it, $3m is the new $1m.  But there is a surprising divide, even amongst military officers, between those with no investments and those who know how to make money work for them.  So I never know which one I’m talking to, although I guess it’s the latter in this thread.

Some pilot friends of mine were giving Biden shit for having a $9m net worth - as if it were indicative of corruption - even though he has made the equivalent of six figures since the 1970s.

I agree on the divide.  I was actually in the former group while on active duty, although that was quite awhile ago.  Back then, $1m was an unfathomable number.  I went to grad school then entered the startup world.  I do have some play money in the short term market but even now I'm relatively conservative and long-term focused with regard to traditional investments.  I decided to keep that part of our lives simple so I can devote my effort to new technology development.  I just focus on net worth and liquid that allows a reasonable take.  After trial and error as well as some initial naivete I've been fortunate with a few home runs that have provided comfortable results.  

True on Biden.  If anything, he has no more corruption than the typical career politician.  

[ClearedHot]

What a great day to be in the market!

I am guessing Friday/Monday was the new low/base for Tech.

[mightymighty]

@ClearedHot a good day indeed. this GME and TSLA train I've been on over the last 2 days makes me feel like I know what I'm doing.

[Clark Griswold]

Inflation fighting....

I’m considering shifting some cash to TIPS to hedge my bets and preserve cash principal

Any other recommendations?


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[Royal]

38 minutes ago, Clark Griswold said:

Inflation fighting....

I’m considering shifting some cash to TIPS to hedge my bets and preserve cash principal

Any other recommendations?


Sent from my iPhone using Tapatalk

Clark, with the yields so low, the formula for inflation outmoded (in my opinion), and the fact that you owe taxes on the return, I'm not sure how useful TIPS are. There's a school of thought that Market and real estate are the best inflationary hedge...Time will tell; let us know what you decide to do.

[Clark Griswold]

Clark, with the yields so low, the formula for inflation outmoded (in my opinion), and the fact that you owe taxes on the return, I'm not sure how useful TIPS are. There's a school of thought that Market and real estate are the best inflationary hedge...Time will tell; let us know what you decide to do.

Will do, good point (taxes on interest)

As to RE and equities, you may be right but as I just sold my investment property (probably moving so I wanted to start to roll up my footprint) and now have the equity in cash to think about protecting/growing
Equities, nervous about a correction, everything seems overvalued

I’m not pessimistic, but it seems like the late 70s again with potentially stagflation


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[Lord Ratner]

1 minute ago, Clark Griswold said:

Will do, good point (taxes on interest)

As to RE and equities, you may be right but as I just sold my investment property (probably moving so I wanted to start to roll up my footprint) and now have the equity in cash to think about protecting/growing
Equities, nervous about a correction, everything seems overvalued

I’m not pessimistic, but it seems like the late 70s again with potentially stagflation


Sent from my iPhone using Tapatalk

I'm not crazy about the parallels between 1990s Japan and 2020's USA, but at least we are still the strongest economy in the world. 

 

The number of people investing is stocks and crypto without a clue as to what either one is scares me a bit too. 

 

The only philosophy behind the current trajectory is "stocks always go up." That didn't work great in 99 for stocks or 08 for houses. But I'm not sure the millennials can sustain the trading volume required at these prices to keep the prices high, especially when the boomers start selling for retirement income... Uncle Sam can keep buying, but for how long? A millennial buying 5 shares of amazon at $2000 will not cover dozens of boomers who bought it at $100 selling to pay the mortgage on their homes... 

 

It has the makings of a cascade, but bubbles always go longer than you expect.

[Royal]

1 hour ago, Lord Ratner said:

The number of people investing is stocks and crypto without a clue as to what either one is scares me a bit too. 

 

The only philosophy behind the current trajectory is "stocks always go up." That didn't work great in 99 for stocks or 08 for houses. But I'm not sure the millennials can sustain the trading volume required at these prices to keep the prices high, especially when the boomers start selling for retirement income... Uncle Sam can keep buying, but for how long? A millennial buying 5 shares of amazon at $2000 will not cover dozens of boomers who bought it at $100 selling to pay the mortgage on their homes... 

 

It has the makings of a cascade, but bubbles always go longer than you expect.

This raises a few questions that I don't know the answer to: What percentage of boomers' 401k's tied up in equities? The common school of thought is that as you get nearer retirement age, you blend in "safer" investments, typically in the form of bonds. Next, what percentage of boomers are passing away with a substantial sum still in their retirement accounts? If it's high, what are their kids doing with it? Next, what percentage of 401k's have bonds in them and how much? Another theory getting floated is that equities are being driven up because there's nowhere else great to park your liquidity. Interest rates have been so low for so long that the bond market makes hardly any sense to the average investor. If memory serves, even bond funds weren't great during March 2020. There was a big sell off and if you needed the cash in that time frame, you would've taken a haircut (though not as bad as the S&P). Where's @MilitaryToFinance? He's probably got some insight into all this.

[Lord Ratner]

2 hours ago, Royal said:

Another theory getting floated is that equities are being driven up because there's nowhere else great to park your liquidity. Interest rates have been so low for so long that the bond market makes hardly any sense to the average investor.

🎯

 

The fed's attempt to control the economy with near zero interest rates has created a reality where the only place to make money is real estate and equities. But that's only for the ones that have any retirement at all...

https://www.businessinsider.com/personal-finance/baby-boomer-retirees-positive-about-retirement-savings-2020-10#:~:text=According to data from the,use the cash before retirement.

According to this the boomers own half of all equities, but very concentrated at the top.

https://www.cnbc.com/2020/10/17/older-americans-are-selling-the-stock-market-slowly-but-ceaselessly-to-junior-generations.html

 

What I can't tell from that article is whether or not that accounts for pension funds. I'm far more worried about the state and municipal pension funds all across the country that have their money tied up in equities, because they're underfunded and can't grow the funds anywhere else. But it reinforces the problem of retirement savings... The wealthy have all the stocks. 

We'll see. Just seems... Implausible that this ride continues forever