Not cryptocurrency (seriously). From an investment (my) perspective from day one of its introduction cryptocurrency has been inevitable. The world is better off with a currency that can't be manipulated and printed on a whim. Its amazing to me that this one sure bet is being treated so unfairly as a gamble.
Kinda side-tracked, but I can agree. although will it be specifically Bitcoin? I think that's where the debate is. IMO Ether is the most prominent at the moment.
Whatever it will be, it won't be bitcoin. Two days ago the -average- transaction cost $16 USD and the throughput is only a few transactions per second. Etherium already has three times the transaction throughput of bitcoin. There is no technical reason it has to be this way, it was acknowledged that the temporary block size limit needed to be increased over seven years ago, but it was kept tiny to push an unnecessary secondary layer.
> The world is better off with a currency that can't be manipulated and printed on a whim.
Honest question, how come? You can maybe argue something bout inflation, but it's not a very strong argument since a. the effects of extreme monetary easing aren't fully understood and b. there are countries which have been printing money with limited inflation.
TL;DR If you buy a pizza with your bitcoin you will always regret it.
Long explanation:
If you build a country around a sufficiently deflationary currency then it will stagnate over the long term because keeping your money yields better returns than investing or running businesses.
Let's say you run a company that buys $800 worth of ingredients to make a product that sells for $1000. The problem with physical reality is that you first have to buy before you can sell and the sell date may lie very far into the future. So what happens is that you will do the regrettable act of spending money first and once your product has hit the shelves of a retail store you have to sell your products for $900. Let's say you are a lone carpenter for ease of argument and you are running the entire business yourself. Those $100 are your income. Incomes of workers are going down over time.
In short what you are doing is sell low and buy high all the time because of physical reality.
This can get really nasty, to the point that if you have product stock that isn't selling at all you can actually make a loss! Lets say you have a table that only sold after 3 years for $700. It clearly wasn't worth it so why do it again? Even if you wanted, at some point your business will go bankrupt if you keep doing losing strategies.
Why is this a problem? If you were using Bitcoin to save for retirement then there will eventually come a tipping point where your Bitcoin are worthless because you cannot exchange them for services or goods anymore because the real economy is gone or not big enough to support your retirement.
There isn’t always a better alternative. Almost always, yes, but not absolutely always.
Admittedly we’re deep into edge cases here. The only one I can think of is that you have $1,000 today, and need $100,000 by tomorrow. Maybe someone is holding your cat to ransom, and you really love that cat. No one is going to loan you a hundred grand to give to catnappers, so you go to the casino hoping for some really good luck as you put everything on black. Good luck, Mittens.
Utility of money is nonlinear. Usually people point to its asymptotic sublinearity, but at smaller scales the value of money has all sorts of spikes when you hit threshold values.
The upshot of which is that even bets with negative expected value can have positive expected utility depending on where you are on the curve.
The difference between speculating (in the stock market/shares/commodities) and a casino is that casinos' house-odd games (i.e., odds that are always in favour of the house) are guaranteed long term losing propositions by definition.
Speculating on the markets is not gambling in the same way as in a casino - there's some element of skill in speculating in the markets, and there's not house-odds on the markets. I would compare speculating on the markets to be similar to a game of poker (which is not a house-odds game).
I work at a large financial company in the investment department writing software to analyze public market. Your statement is very wrong. We literally write a bucketing application that makes calculated risks that works almost all the time. From outside yes. It looks like a casino but when you get deeper into it, it's very calculated and the math behind risk calculation can get very complex.
I think you mean lucky. Unless you're talking about games where your adversary is other players such as poker rather than the house like blackjack.
I believe that for a while some video poker games like jacks or better had bugs in their pay table that meant with perfect strategy you could make a positive return in the long run, but I'd be very surprised if this is still the case
I assume you haven't heard of "card counting", which is a famous way to beat the house advantage in blackjack. Of course, if they suspect you're doing it, they'll kick you out.
I was under the impression that casino's operated with either continuous shuffling, or enough packs of cards to effectively negate the benefits of card counting these days
Tesla’s inflated stock price has already secured the future of the company, allowing it to raise $10 billion in cash with minimal dilution. Somebody will be left holding the bag when it crashes, but at least the company is succeeding at its important mission.
If Tesla cared about their mission, they wouldn’t sell pollution indulgences. They would sit on their emissions credits to force the auto industry to transition to EVs that much more quickly. Yet they sell them in order to stall the EV programs of their competitors.
And, therefore, when you buy a Tesla you’re just enabling an extra polluting SUV to be sold to someone else. Because they sell pollution rights your purchase has created for them, there is no net environmental benefit to buying one.
They're making cars, pretty decent cars, and spurring the industry towards electric much faster than they would have without Tesla. If they end up setting a bunch of investor money on fire to do this, whatever. The world needs this more than it needs those investors to make money.
As evidenced by the hypergrowth of EVs in Europe over the last few quarters, it is government regulation which is shifting the industry to EVs, not Tesla. I agree that Tesla’s strategy is to boil the ocean with investor’s money.
As evidenced by the hypergrowth of EVs in Europe over the last few quarters, it is government regulation which is shifting the industry to EVs, not Tesla. I agree that Tesla’s strategy is to boil the ocean with investor money by pushing costly, immature technology before it can be used in mainstream autos.
Without expressing any opinion on pollution credits of my own, Elon Musk has been claiming Tesla had a mission other than making money forever. I didn't think it was obscure.
"the overarching purpose of Tesla Motors (and the reason I am funding the company) is to help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy, which I believe to be the primary, but not exclusive, sustainable solution." (2006)
'“The acceleration of sustainable energy is absolutely fundamental, because this is the next potential risk for humanity,” Musk said. “So obviously, that is, by far and away, the most important thing.”
But autonomous cars have the potential to “save millions of lives,” according to Musk, so that is also critical, he said.' (2019)
I bought bitcoin in 2010 and now it's worth a fortune. I never see bitcoin as an investment. TSLA stock in my opinion is just hype. They make nice cars but TSLA is a very different story. People who don't know anything about cryptocurrencies and how they work are buying bitcoin and treating it as an investment. I see the same situation happening with TSLA. People open brokerage account just to buy TSLA. Maybe the bubble will never burst but I don't like taking risks.
the author explains buying put options , not short selling.
in shortselling you borrow shares and sell them , with the promise to give the shares back to the original owner in a later date (so shortsellers hope to buy back the shares later at a lower value)
shorting means betting on falling prices, how such a bet is implemented is an implementation detail. Borrow+sell, put options or much more complex derivatives are possible.
The key to making Tesla (the company) and TSLA (the stock) succeed, and to continue to be worth its value, is to financialize it.
They need to introduce Tesla Prime Services (TPS). Where TPS is an annual subscription service, for $1000, that will allow you to use an autonomous self driving vehicle, that will drive you anywhere you want.
On demand. Fully electric. 5G connected and fully integrated with Starlink. Pure AI. The future is today. (TM)
43 comments
[ 2.2 ms ] story [ 112 ms ] threadSure thing? No freaking way.
Honest question, how come? You can maybe argue something bout inflation, but it's not a very strong argument since a. the effects of extreme monetary easing aren't fully understood and b. there are countries which have been printing money with limited inflation.
Long explanation:
If you build a country around a sufficiently deflationary currency then it will stagnate over the long term because keeping your money yields better returns than investing or running businesses.
Let's say you run a company that buys $800 worth of ingredients to make a product that sells for $1000. The problem with physical reality is that you first have to buy before you can sell and the sell date may lie very far into the future. So what happens is that you will do the regrettable act of spending money first and once your product has hit the shelves of a retail store you have to sell your products for $900. Let's say you are a lone carpenter for ease of argument and you are running the entire business yourself. Those $100 are your income. Incomes of workers are going down over time.
In short what you are doing is sell low and buy high all the time because of physical reality.
This can get really nasty, to the point that if you have product stock that isn't selling at all you can actually make a loss! Lets say you have a table that only sold after 3 years for $700. It clearly wasn't worth it so why do it again? Even if you wanted, at some point your business will go bankrupt if you keep doing losing strategies.
Why is this a problem? If you were using Bitcoin to save for retirement then there will eventually come a tipping point where your Bitcoin are worthless because you cannot exchange them for services or goods anymore because the real economy is gone or not big enough to support your retirement.
In practice though we have things like net90 payment terms.
But purely financially, they are a terrible bet.
> a bad bet if you have no better alternative.
there's always a better alternative. For example, putting the money in a bank account with interest. Or placing it into an index fund.
Admittedly we’re deep into edge cases here. The only one I can think of is that you have $1,000 today, and need $100,000 by tomorrow. Maybe someone is holding your cat to ransom, and you really love that cat. No one is going to loan you a hundred grand to give to catnappers, so you go to the casino hoping for some really good luck as you put everything on black. Good luck, Mittens.
The upshot of which is that even bets with negative expected value can have positive expected utility depending on where you are on the curve.
Speculating on the markets is not gambling in the same way as in a casino - there's some element of skill in speculating in the markets, and there's not house-odds on the markets. I would compare speculating on the markets to be similar to a game of poker (which is not a house-odds game).
I believe that for a while some video poker games like jacks or better had bugs in their pay table that meant with perfect strategy you could make a positive return in the long run, but I'd be very surprised if this is still the case
If Tesla cared about their mission, they wouldn’t sell pollution indulgences. They would sit on their emissions credits to force the auto industry to transition to EVs that much more quickly. Yet they sell them in order to stall the EV programs of their competitors.
And, therefore, when you buy a Tesla you’re just enabling an extra polluting SUV to be sold to someone else. Because they sell pollution rights your purchase has created for them, there is no net environmental benefit to buying one.
Why not? It makes them money. Who has ever claimed that TSLA cared about anything else but making money?
"the overarching purpose of Tesla Motors (and the reason I am funding the company) is to help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy, which I believe to be the primary, but not exclusive, sustainable solution." (2006)
'“The acceleration of sustainable energy is absolutely fundamental, because this is the next potential risk for humanity,” Musk said. “So obviously, that is, by far and away, the most important thing.”
But autonomous cars have the potential to “save millions of lives,” according to Musk, so that is also critical, he said.' (2019)
They need to introduce Tesla Prime Services (TPS). Where TPS is an annual subscription service, for $1000, that will allow you to use an autonomous self driving vehicle, that will drive you anywhere you want.
On demand. Fully electric. 5G connected and fully integrated with Starlink. Pure AI. The future is today. (TM)