Topic: rpietila Wall Observer - the Quality TA Thread ;) - page 111. (Read 907229 times)

He would be a fool to tell you until he has accumulated substantially, and a fool not to tell you afterwards.

Not that there is anything wrong with that:  In Orthodoxy there is a tradition of the "holy fool", whose spiritual insight is advanced, such that his actions appear folly to those of lower, merely fleshly, awareness.

I started proselytizing and talking about BTC around 2 years ago, and the same issues have regularly arisen.

(Like many people, I didn't 'invest' any meaningful amount because I was more enthused by the principle and technology, than by any prospect of monetary gain).

The vast majority will either:

a. Have no use for BTC (yet)

b. Not trust it enough to use it as a money replacement.

c. Not understand the true nature/implications of the revolutionary technology.


It splits roughly along demographic lines and I would conjecture that the strongest supporters need to grow and age into more influential positions before the real step change in adoption can happen.

Fiat will be dominant for some time, and the real game changer might even, ironically, be fiat administered by blockchain.

Make sure you tell us when you found it ok?

My dissension is that I think that curve fit is basically useless as a trading tool and is dubious as a long-term predictor.

You don't need that crutch to convince yourself to continue to hold Bitcoin, as even a log-logistic model would point to 10 bagger from here within a few years at most. But your curve fit could make you overconfident and cause you to miss out on searching for other more undervalued assets.

I've read you say you have a hard time finding anything with as much astronomical upside potential as Bitcoin.


I am not trading (not a trader). I am trying to access rate of adoption and total end game adoption of Bitcoin and potential competitors.

The possibility of randomness means your fit is useless as a short-term trading, timing tool.

For long-term valuation prediction, we need to access the adoption.

You made one major correct decision which was to buy BTC below $10. That didn't require any curve fit, it was just obvious to anyone who was paying attention.

I even told you < $10 that you were probably correct, but that I couldn't do any speculation at that time, so it was fairly obvious to me too even I wasn't even studying Bitcoin at that time in 2012 (when you first mentioned it) and early 2013 (when you pounded the table). One of the reasons is I didn't even know how to buy it or hold it and I wasn't in a position to make mores silly process mistakes in my weakened condition (e.g. buying another 1000oz bar from Tulving that arrives with the serial # chiseled off and he refuses to do the right thing). Even you had to lose a ton of $ when you laptop was left unattended, so I was wise not to try to rush in too late and commit the usual learning mistakes.

I think you are placing too much confirmation bias on that curve fit when it appears it is not even responsible for your success. You sold at too low a price if I remember correctly in 2013 and more than one of your trading calls on price have been wrong in 2013 and 2014. So just like anyone trying to trade price, you are correct about 50% of the time.

As far as I know, the successful trades you make are arbitrages often with ladder structure so that you win with high probability. I don't think timing the price has ever been something you excel at. You do excel at buying highly underpriced assets, e.g. silver below $10 along with me.

I seriously don't see Bitcoin as extremely highly undervalued. Looks like about a 10 - 100 bagger from here. Yeah that is a good investment but it depends how long you have to wait. Whereas buying below $10 in 2012/2013 was an exceptionally undervalued purchase.

I have since learned that I don't have any particularly expert skill at trading. My skills are in identifying market trends, demographics, and size, and also in developing products to meet the market needs. I would never (again!) try to do arbitrage trades, or shorting BBR the way animorex recently described. I don't have the correct personality nor sufficient interest in it. I view it as drudgery and it impinges on my creative time which means I end up not being thorough.

Since Bitcoin is not going to take over the world, now I am searching for that incredibly undervalued one that will take over the world. Make sure you buy it cheaper than I do or invest more than I have (which won't be difficult), else I will have bragging rights

Not a very general definition, but if model B has all the terms/functions that model A has + extra, then B is strictly more complicated than A.


I am not saying that. What I am saying, is that:

- logistic model has (much) better R^2 than log-logistic model
- logistic model is simpler than log-logistic model
- behaviour now is well within the bounds of expected volatility (based on historical volatility ex. 2012/2013)

It is just that under these conditions there is no ground to assess a higher probability to log-logistic than logistic.

As a reply I accept your post containing a graph how terrible fit the log-logistic model actually is and how mistaken trading signals it would have given in the past.

I am much more experienced than you in analyzing market demographics. I knew the following intuitively before I even Googled to verify it.

Bitcoin is nearing 6 years old. The World Wide Web was launched to the public-at-large in 1993. By the 6-7th year, the dot.com bubble had a capitalization that was 183% of the USA GDP!!!

Bitcoin is 1000x smaller phenomenon and yet the WWW is 10x bigger by now, so relatively speaking Bitcoin is 10,000x smaller.

http://www.forbes.com/sites/robertlenzner/2014/02/22/the-stock-markets-valuation-is-at-a-dangerous-115-2-of-the-gdp/


This is basic research on relative size that anyone of your position with a thread like this should have done already.

I suppose we should also include all the money invested in Bitcoin-related public companies. But I doubt it exceeds Bitcoin's market cap, so my point remains in spades.

http://www.coindesk.com/americans-think-bitcoin-is-xbox-game/



How much more clear can it be that most people have no use for Bitcoin? See below...

http://cointelegraph.com/news/112135/the-ethnic-group-that-knows-the-most-about-bitcoin-is-not-who-you-think-it-is




http://www.cnbc.com/id/101523567

It is simply impossible to "choose the right model" with certainty. It is impossible to say today if bitcoin adoption has slowed or not.
- Statistically, the past is the best prediction of the future : it would mean adoption has not slowed and will catch up through sudden big moves of mass adoption and we will follow an exponential trendline which is the best model for the past so far.
- Empirically, adoption in 2014 has been disappointing which could mean we are invalidating the current model, yet there are preparations being made that would allow a greater wave of adoption.

Define 'more complicated' mathematically? Would it be what you are more familiar with?

Overfit is a problem if the curve fit or regression model is not correct.

I am trying to help both of us avoid confirmation bias error.

Even the concept of fit has a plurality of models.

How are you so certain that Bitcoin adoption has not slowed?? You can say it is just a lull due to randomness, but how can you be so confident of that? I am trying to be objective. I see evidence it is slowing. It might be randomness, but it also might not be. I also see much confirmation that Bitcoin is not being adopted by most of those who hear about it, because there are enormous barriers to adoption.

P.S. I nearly aced my Theory of Probability and Statistics course 30 years ago. But correct I don't use it in practice. But that distinction seems to be irrelevant in this case, because we have to choose the correct model before we can apply statistical discipline. Or we need some very higher order statistical methods to try to determine which model is correct.

The burden of proof is on the "fit" that fits the data less (despite being more complicated), i.e. yours.


(I seriously think you are wasting your precious time, trying to argue with me about statistics. Tell me when I do likewise re: your strong point.)

Randomness is not the only possible explanation. Log-logistic adoption is another possibility for a declining rate of price appreciation given  Peter R's model correlating adoption to market cap and given the market cap is growing.

So it is not sufficient to say, "the model must be my fit, and randomness explains why the fit is off this year".

Thank You Peter R! I will add this model to the toolkit when I try to explain to people why sometimes (2013) it rises 100x and sometimes (2012) hardly at all. Randomness.

Interesting..
However, if bitcoin will go through it's "plaque" years and then will be glorious by 2070, it wouldn't matter much to me. I am of the opinion that each generation has to build their own wealth, not ride on savings of their folks, so it does not look really appealing if some of my descendents will be very wealthy because of my activities in the first half of this decade.

http://www.bizforum.org/Journal/www_journalJVP016.htm

Im looking for the pic of rpietila's castle, i think its in this thread, looks a bit gothic, which page is it?

1 - Buy some coin that's very cheap that offers anonymity
2 - Wait for some weaks....
3 -
4 - PROFIT!

The likelihood of daytrading your way to a large stash is very low.   Selling tops and buying bottoms is very slow work, if you want to keep risk managable.  Doing it fast with managed risk requires talent training and experience.  Almost certainly you are better off just buying it gradually, in constant fiat amounts, small and frequent.  Various savings plans involving sales to reduce exposure at highs, have been published.  Risto has one which is well considered.  Look for that thread.  David Latapie has one which he tuned for Monero.  Check his posts, probably during June.

Question for rpietila and friends, i just got my first BTC. Once you reach 1 BTC, what would be the best strategy to start working towards doubling it and so on? I've thought starting by investing 0.2 and try to double that,  then invest these 0.4 and so on and so on.
I got like 50 XMR as well.

Wow, thanks for the link.
Finally someone who writes what I already been thinking all along.
Bookmarked it.

http://armstrongeconomics.com/2014/09/03/the-september-start-of-war/

Agreed. I keep a column in my data series for daily mining reward and currently it is $1.7 million at Bitstamp prices. Miners are likely selling most of this to pay for the upgrades Moore's Law provides.

I will be speaking on a mining algorithm panel at the Hasher's United Conference in Las Vegas in October, where I will briefly explain to an audience of proof-of-work miners my alternative in development. Vitalik Buterin and Charles Lee will also be there to explain Ethereum and Litecoin algorithms respectively.