Investment Thread - For all your money needs

[DeacMan]

I didn’t say it was a scam, although the “brokerages” certainly seem to be. I don’t think the financial system is rigged or whatever either, and i doubt ph or “folks” think it’s rigged in such a way that bitcoin would be particularly appealing to them.

I understand the underlying technology, what doesn’t necessarily follow is why a bitcoin is worth $X vs $Y. It looks like a meme stock. Great if you got in on the ground floor, it turned out well for you then. Like GameStop. Doesn’t mean it’s destined to fall off a cliff but what reason is there to believe it’ll grow?

That’s just my opinion as an apparently zero risk tolerant investor (lol). Also I don’t hold any gold so let me stop you right there.

FTX, fraud. Binance, super shady IMO. Coinbase, not so much IMO given the SEC's position is they've been operating illegally without proper licenses since 2019 but permitted them to be investable by unaccredited investors starting in 2021 (bizarre). Again, examples of why sound regulation is needed.

I know you never said BTC was a scam. Ph said crypto is a scam - which presumably means all of it. I also never said you were a low risk tolerance investor. I just noted that would be one reason someone (you or anyone) might refuse to make an allocation to BTC.

BTC to me is a hedge that the world is in the midst of a very long deflationary economic cycle. And given the explosion of debts globally that need to be serviced the possibility that is correct seems more, not less likely, as time passes. And, even if that is not ultimately correct, so far that hedge over a period of 15 years has driven asymmetric returns. So let's say you don't have a thesis for why it may grow (so far it has grown IMO bc the network continues to attract new users globally). Given the growth it has demonstrated why would it not be something worthy of allocation? IOW, if you aren't long with something you are just short. At least so far being short has not been a good long term proposition as BTC has outperformed pretty much every asset on earth since its inception. You're correct that future results may not mirror past performance. You might lose all your allocation. But is no allocation the right bet? I don't know. But given past performance I have some exposure as part of a broader portfolio. By no means do I advocate anyone bet a lot on it.

Also, I do hold some gold (not physical) for the same hedge reason. That's been a much slower grind since the collapse of the markets during the GFC.

 

[dartsndeacs]

Tether is/has been subjected to audits. But my fundamental issue with Tether is that the one for one dollar backing is tied in some significant part to commercial paper, which obviously is more risky than USDC's approach. Still arguably better than the fractional reserve system we have for banking and the entire Eurodollar regime globally. But yes, it is a risk (and a concentrated one).

But that risk does not make BTC, itself, a scam. BTC has set rules that don't change. If anything BTC has endured a shit ton of bad news and bad actors in the space more broadly (Tether FUD, FTX, Luna, Celcius, etc.) to be sitting at 6x where it was in the wake of Covid. Just the impact of network growth in terms of global users IMO.

No argument from me the space needs regulation. And the EU has already moved on it, which is good.

Tether has not been subjected to audits. Tether has promised audits for 5 years and have yet to produce one. C'mon dude, do your research before shilling BTC to people on the boards.

But rather than submit to audits, Tether instead relied on threadbare ‘attestations’ given by Moore Cayman, a tiny accounting firm in the Cayman Islands that was later absorbed by a U.K. firm and rebranded as MHA Cayman. Tether ditched MHA Cayman following its March 31, 2022 attestation, switching its business to an Italian unit of BDO this summer.

In case anyone’s counting, BDO Italia is the seventh (or possibly eighth, it’s hard to keep track) company that Tether has employed in this capacity since September 2017. The last company Tether hired to perform an actual audit – Friedman LLP – was fired before completing its audit due to what Tether claimed were “excruciatingly detailed procedures” that would make an audit “unattainable in a reasonable time frame.” Five years later, it’s clear Tether’s definition of a ‘reasonable time frame’ is flexible AF.

Tether claims no more commercial paper in stablecoin reserves

Tether has issued a blog post in which the integrity-challenged firm claimed that as of October 12, it had "eliminated commercial paper from its reserves," replacing them with T-Bills.

coingeek.com

 

[dartsndeacs]

There's also the problem when Tether apparently had all this commercial paper you reference (like $20 billion worth which would put them in like the top 10 holdings worldwide) yet none of the broker dealers that deal in commercial paper had ever heard of them. Well it's not a problem when it's all made up.

 

[PhDeac]

Ph seems like a collectible action figures guy anyway.

I think he is a true believer in the bullshit BTC is selling so if you were to you would embrace the power of decentralization blah blah blah but everyone else here knows it’s a shitty pyramid scheme hence the confusion.

Pretty much.

I did not suggest any and every alternative must look good to Ph or anyone else. Not sure how you compare BTC to a beanie baby or a lottery ticket. All investments come with risk.

Why would you not allocate some of your capital to an investment that has delivered an asymmetric return since its inception 15 years ago? And I'm not suggesting you'd have no legit reason not to do so.

On the grounds you think it is a scam? OK. How is it a scam? Explain.

On the grounds you think it is too speculative? OK. That is acceptable given you may have zero tolerance for volatility in any portion of your portfolio or have super low risk tolerance.

But Ph is someone who literally says things that suggest he believes the entire monetary system is rigged with rules that are altered and manipulated to favor those in power. So here's an asset with attributes that are both very clearly defined and that cannot be altered. It's one fatal risk is if the entire internet were to collapse (which suggests we'd all have much bigger problems). Anyone on earth is free to buy it and hold it. And that's something he says "of course not" to just allocating some of his portfolio to? It's his money. I'm just surprised that would be his reaction to it.

LOL. It's not an "asset." Crypto relies on faith. Of course, so does the whole financial system. If people lose faith in a product or company, the value decreases even if that lack of faith isn't supported by facts. Some of the faith is backed up by infrastructure. That's what separates the dollar or most other government currencies from crypto which is just some shit people made up.

 

[DCDeac]

I always find the "crypto is just shit people made up" thing a baffling idea to get hung up on. Shit people made up is like 99.99% of all things we agree have value that aren't consumables.

Folks will say things like "I can't believe my bank fees" and then "crypto is a scam with no value" in the same breath.

Crypto is risky, fine. You pretty much can't go anywhere to buy crypto where you don't get the "this is risky! invest only what you can afford to lose!" warnings nonstop. It's also genius, disruptive, provides incredible value across an almost unlimited number of use cases, and threatens an industry that had plenty of risk issues prior to running headlong into such fast-moving innovation.

The animosity around it is such a strange thing.

 

[dartsndeacs]

I always find the "crypto is just shit people made up" thing a baffling idea to get hung up on. Shit people made up is like 99.99% of all things we agree have value that aren't consumables.

Folks will say things like "I can't believe my bank fees" and then "crypto is a scam with no value" in the same breath.

Crypto is risky, fine. You pretty much can't go anywhere to buy crypto where you don't get the "this is risky! invest only what you can afford to lose!" warnings nonstop. It's also genius, disruptive, provides incredible value across an almost unlimited number of use cases, and threatens an industry that had plenty of risk issues prior to running headlong into such fast-moving innovation.

The animosity around it is such a strange thing.

probably cause of all the fraud

 

[PhDeac]

I always find the "crypto is just shit people made up" thing a baffling idea to get hung up on. Shit people made up is like 99.99% of all things we agree have value that aren't consumables.

Folks will say things like "I can't believe my bank fees" and then "crypto is a scam with no value" in the same breath.

Crypto is risky, fine. You pretty much can't go anywhere to buy crypto where you don't get the "this is risky! invest only what you can afford to lose!" warnings nonstop. It's also genius, disruptive, provides incredible value across an almost unlimited number of use cases, and threatens an industry that had plenty of risk issues prior to running headlong into such fast-moving innovation.

The animosity around it is such a strange thing.

No shit. That's what I said.

Pretty much.

LOL. It's not an "asset." Crypto relies on faith. Of course, so does the whole financial system. If people lose faith in a product or company, the value decreases even if that lack of faith isn't supported by facts. Some of the faith is backed up by infrastructure. That's what separates the dollar or most other government currencies from crypto which is just some shit people made up.

probably cause of all the fraud

Pretty much. Which is why I said this:

Pretty much.

LOL. It's not an "asset." Crypto relies on faith. Of course, so does the whole financial system. If people lose faith in a product or company, the value decreases even if that lack of faith isn't supported by facts. Some of the faith is backed up by infrastructure. That's what separates the dollar or most other government currencies from crypto which is just some shit people made up.

DC, there's a difference between a made-up currency and made-up feelings about real companies and products. It's all made up but one has no basis in reality.

 

[DCDeac]

probably cause of all the fraud

That's fine but folks are like "traditional finance fraud is a-ok but crypto fraud means the whole thing is a ponzi scheme."

Ph, you start with the same tired old "old man yells at cloud" argument then go off the rails of reality - "some of the faith is backed up by infrastructure" is just completely off base, and shows a total lack of understanding of the technology and systems that created deFi. That's the opposite of what you said.

It's like my stepfather who never used an ATM in his life because he didn't trust the computers. Being outraged by crypto and putting absurd labels on it across the board is just a fear thing. Remove it and there it's just a discussion of risk, potential, technology, legacy systems, etc. Which are actually fascinating.

 

[06deacon]

It's also genius, disruptive, provides incredible value across an almost unlimited number of use cases, and threatens an industry that had plenty of risk issues prior to running headlong into such fast-moving innovation.

Is this describing blockchain technology or bitcoin currency?

 

[PhDeac]

That's fine but folks are like "traditional finance fraud is a-ok but crypto fraud means the whole thing is a ponzi scheme."

Ph, you start with the same tired old "old man yells at cloud" argument then go off the rails of reality - "some of the faith is backed up by infrastructure" is just completely off base, and shows a total lack of understanding of the technology and systems that created deFi. That's the opposite of what you said.

It's like my stepfather who never used an ATM in his life because he didn't trust the computers. Being outraged by crypto and putting absurd labels on it across the board is just a fear thing. Remove it and there it's just a discussion of risk, potential, technology, legacy systems, etc. Which are actually fascinating.

I'm not talking about technical infrastructure. I'm talking about government infrastructure, political infrastructure, legal infrastructure, military, etc. Nobody is going to war to protect the value of crypto. You can't vote for people to nominate people tasked with maintaining crypto. That's a feature of crypto.

DC, I'm having a discussion of risk, potential, etc. Crypto is just one example. You and DeacMan's weird insistence that I like crypto is part of the whole deal. You all need the rest of us to buy in otherwise it has no value. You lose money or at least don't make money if the rest of us don't take it seriously. That's why people call it a pyramid scheme.

Think about it like this. If something has real value, you don't want everybody else to have it. The value is in scarcity.

 

[06deacon]

probably cause of all the fraud

No good sir it’s on the level

 

[Liquid Karma]

I think he is a true believer in the bullshit BTC is selling so if you were to you would embrace the power of decentralization blah blah blah but everyone else here knows it’s a shitty pyramid scheme hence the confusion.

I didn't have captain delta being a crypto bro, but darn does it make sense now.

 

[Liquid Karma]

FTX, fraud. Binance, super shady IMO. Coinbase, not so much IMO given the SEC's position is they've been operating illegally without proper licenses since 2019 but permitted them to be investable by unaccredited investors starting in 2021 (bizarre). Again, examples of why sound regulation is needed.

I know you never said BTC was a scam. Ph said crypto is a scam - which presumably means all of it. I also never said you were a low risk tolerance investor. I just noted that would be one reason someone (you or anyone) might refuse to make an allocation to BTC.

BTC to me is a hedge that the world is in the midst of a very long deflationary economic cycle. And given the explosion of debts globally that need to be serviced the possibility that is correct seems more, not less likely, as time passes. And, even if that is not ultimately correct, so far that hedge over a period of 15 years has driven asymmetric returns. So let's say you don't have a thesis for why it may grow (so far it has grown IMO bc the network continues to attract new users globally). Given the growth it has demonstrated why would it not be something worthy of allocation? IOW, if you aren't long with something you are just short. At least so far being short has not been a good long term proposition as BTC has outperformed pretty much every asset on earth since its inception. You're correct that future results may not mirror past performance. You might lose all your allocation. But is no allocation the right bet? I don't know. But given past performance I have some exposure as part of a broader portfolio. By no means do I advocate anyone bet a lot on it.

Also, I do hold some gold (not physical) for the same hedge reason. That's been a much slower grind since the collapse of the markets during the GFC.

Not the BTC is a hedge bullshit...

 

[IAppreciateIt]

it's tax prep season PEEPS

help me cpas @plama @dartsndeacs

question: does a solo 401k count as an employee-sponsored retirement account?

context: my wife's only income is from a single-member LLC, i've been looking up solo 401ks for her. what i can't figure it out is whether her having a solo 401k would preclude me from getting deductions on my IRA contributions (neither of us have employee 401ks.)

 

[dartsndeacs]

Move back to LA so you can make enough money so you can't deduct IRA contributions anyways.

 

[IAppreciateIt]

there's no income cap on ira contributions if you don't have an employee-sponsored retirement account.

....and you wanna be my accountant...

 

[DeacInVermont]

it's tax prep season PEEPS

help me cpas @plama @dartsndeacs

question: does a solo 401k count as an employee-sponsored retirement account?

context: my wife's only income is from a single-member LLC, i've been looking up solo 401ks for her. what i can't figure it out is whether her having a solo 401k would preclude me from getting deductions on my IRA contributions (neither of us have employee 401ks.)

A solo k is an employer sponsored plan. So, you are able to make your own contributions to an IRA.

 

[dartsndeacs]

reading up on it I agree it'd be an employer sponsored plan, so you'd likely lose the deduction

 

[DeacInVermont]

reading up on it I agree it'd be an employer sponsored plan, so you'd likely lose the deduction

If he isn’t covered by his own employer sponsored plan, he will be able to make a deductible contribution to his own IRA. Her participation in a solo K won’t impact that.

 

[dartsndeacs]

If he isn’t covered by his own employer sponsored plan, he will be able to make a deductible contribution to his own IRA. Her participation in a solo K won’t impact that.

Even if he's over the income limit?