(SSS) - A Sane and Simple bitcoin Savings plan - page 8.

xDan

hero member

Activity: 688

Merit: 500

ヽ( ㅇㅅㅇ)ﾉ ~!!

Quote from: d9000 on December 13, 2013, 12:16:25 AM

Excellent thread - thanks!!

I hacked together a quick Google Docs spreadsheet to play with the numbers for my own uses, and I'm in the process of creating a small website with an SSS-style calculator on it.

I'll keep you posted when it's up.

Did you see this,or is it not SSS-like enough for your tastes? Tongue

http://xzist.org/amazing-bitcoin-retirement-fund-calculator/

You're welcome to re-use the source.

d9000

newbie

Activity: 14

Merit: 0

Excellent thread - thanks!!

I hacked together a quick Google Docs spreadsheet to play with the numbers for my own uses, and I'm in the process of creating a small website with an SSS-style calculator on it.

I'll keep you posted when it's up.

kdrop22

full member

Activity: 238

Merit: 100

Quote from: ?? on ??

Quote from: Zangelbert Bingledack on December 09, 2013, 02:32:19 AM

Anything else is getting into trading and should be left to advanced traders, or perhaps with a very small percentage just for fun.

I agree as long as, like you said, it is a very small percentage. I was actually trading during the crash with a very small %. I lost Sad

but still it gave me the sweet comfort of the illusion of control.

I trade with 2% of my holdings as well. Helps relieve the urge to buy/sell something.

Kramerc

sr. member

Activity: 397

Merit: 250

Thank you a lot for this piece of advice and for this thread.

For a 1 week bitcoin novice who is trying to get as much information on bitcoin as possible, and who is looking to invest as soon as my accounts get validated, this strategy is heaven sent.

Zangelbert Bingledack

legendary

Activity: 1036

Merit: 1000

Thanks for the input, gents.

I was thinking the goal was to maintain 80/20 ratio, but actually it should be to bring your holdings to this ratio on the way up, but not on the way down.

Anything else is getting into trading and should be left to advanced traders, or perhaps with a very small percentage just for fun.

macsga

legendary

Activity: 1484

Merit: 1002

Strange, yet attractive.

Quote from: CMMPro on December 07, 2013, 09:41:31 PM

Funny, I feel exactly the same way.
I've raked enough to be playing with "found money" now and the emotion is almost completely gone.

The crash in April was gut wrenching to me...too much emotion.
This correction...meh.

I never got into the trading concept in both times and I'm just grabbing my popcorn. When you're risk free; you're alright. Wink

CMMPro

hero member

Activity: 588

Merit: 500

Quote from: Peter R on December 07, 2013, 01:12:38 PM

Quote from: Zangelbert Bingledack on December 07, 2013, 02:05:17 AM

De-raking

If the goal is to maintain 80% of your portfolio in Bitcoin, what do you do when the price falls a lot (for a non-catastrophic reason)? If you had $80,000 in BTC and $20,000 in fiat, then the price halved, you'd now have $40,000 in BTC and it'd only be about 67% of your portfolio. Wouldn't you want to buy back enough BTC to bring the ratio back to 80/20?

Obviously there are limits to how low you'd go with this, but does this have any use or does even any rebalancing on price dips ruin the whole point of the rake/hedge?

Zang: I'm usually a big fan of your posts, but I think your de-racking idea is extremely dangerous. The whole idea of the rake is to allow you to enjoy the run-up, recover you initial investment, and emotionally detach from the bitcoins you are "letting ride."

I maintained a Zen-like calmness through this crash, I think in large part due to the SSS. By now I have raked* an amount roughly equal to my initial investment, and for some reason when the price rallies or crashes the dollars gained or lost seem ephemeral.

That being said, since I still earn a wage, I take 10% of the extra money I have from each pay cheque for "savings" and put this into bitcoins. This amount is now trivial compared to my long-term holdings, but I see it as a low-risk vote of confidence in the bitcoin economy.

*The best way to rake, if possible, is to purchase things directly with your bitcoins.

Funny, I feel exactly the same way.
I've raked enough to be playing with "found money" now and the emotion is almost completely gone.

The crash in April was gut wrenching to me...too much emotion.
This correction...meh.

EdsWow1

member

Activity: 112

Merit: 10

Fantastic thread .... thank you !!

canth

legendary

Activity: 1442

Merit: 1001

Quote from: rpietila on December 07, 2013, 01:21:44 PM

To make any significant benefit of de-raking, one or both of the following have to happen:

- Big enough rake-% to give access to more funds
- Big enough de-rake-% to give enough leverage in dips.

First of them makes a terrible cut in your EV in the long run.
Second is dangerous in final loss.

My gut tells that you should just keep all rakes and enjoy life.

Yeah, that's probably wisest. Like most investment decisions, it really just requires the will to see it through regardless of how the investment plays out vs the expectations.

Peter R

legendary

Activity: 1162

Merit: 1007

Quote from: rpietila on December 07, 2013, 01:21:44 PM

My gut tells that you should just keep all rakes and enjoy life.

+1

rpietila

donator

Activity: 1722

Merit: 1036

To make any significant benefit of de-raking, one or both of the following have to happen:

- Big enough rake-% to give access to more funds
- Big enough de-rake-% to give enough leverage in dips.

First of them makes a terrible cut in your EV in the long run.
Second is dangerous in final loss.

My gut tells that you should just keep all rakes and enjoy life.

Peter R

legendary

Activity: 1162

Merit: 1007

Quote from: Zangelbert Bingledack on December 07, 2013, 02:05:17 AM

De-raking

If the goal is to maintain 80% of your portfolio in Bitcoin, what do you do when the price falls a lot (for a non-catastrophic reason)? If you had $80,000 in BTC and $20,000 in fiat, then the price halved, you'd now have $40,000 in BTC and it'd only be about 67% of your portfolio. Wouldn't you want to buy back enough BTC to bring the ratio back to 80/20?

Obviously there are limits to how low you'd go with this, but does this have any use or does even any rebalancing on price dips ruin the whole point of the rake/hedge?

Zang: I'm usually a big fan of your posts, but I think your de-racking idea is extremely dangerous. The whole idea of the rake is to allow you to enjoy the run-up, recover you initial investment, and emotionally detach from the bitcoins you are "letting ride."

I maintained a Zen-like calmness through this crash, I think in large part due to the SSS. By now I have raked* an amount roughly equal to my initial investment, and for some reason when the price rallies or crashes the dollars gained or lost seem ephemeral.

That being said, since I still earn a wage, I take 10% of the extra money I have from each pay cheque for "savings" and put this into bitcoins. This amount is now trivial compared to my long-term holdings, but I see it as a low-risk vote of confidence in the bitcoin economy.

*The best way to rake, if possible, is to purchase things directly with your bitcoins.

bluemoon

member

Activity: 69

Merit: 10

Quote from: Zangelbert Bingledack on December 07, 2013, 02:05:17 AM

De-raking

If the goal is to maintain 80% of your portfolio in Bitcoin, what do you do when the price falls a lot (for a non-catastrophic reason)? If you had $80,000 in BTC and $20,000 in fiat, then the price halved, you'd now have $40,000 in BTC and it'd only be about 67% of your portfolio. Wouldn't you want to buy back enough BTC to bring the ratio back to 80/20?

Obviously there are limits to how low you'd go with this, but does this have any use or does even any rebalancing on price dips ruin the whole point of the rake/hedge?

Depends how well you want to sleep at night

Rebalancing is a different strategy and trades the possibility of gains for the possibility of the total loss of your portfolio.

Either way you should have a plan and stick to it: then you can benefit from the positive feeling of decision rather than the weak feeling of indecision.

Zangelbert Bingledack

legendary

Activity: 1036

Merit: 1000

De-raking

If the goal is to maintain 80% of your portfolio in Bitcoin, what do you do when the price falls a lot (for a non-catastrophic reason)? If you had $80,000 in BTC and $20,000 in fiat, then the price halved, you'd now have $40,000 in BTC and it'd only be about 67% of your portfolio. Wouldn't you want to buy back enough BTC to bring the ratio back to 80/20?

Obviously there are limits to how low you'd go with this, but does this have any use or does even any rebalancing on price dips ruin the whole point of the rake/hedge?

rpietila

donator

Activity: 1722

Merit: 1036

Quote from: Butters on December 04, 2013, 11:14:58 PM

Hello Op, thank you very much for this thread. I want your honest answer to 1 question. With all your knowledge of bitcoin, from 0 to 100 what would be your honest guess about the probability of mBtc getting to 1000usd, and the probability of crash and burning.

What about the probability of going higher, but not as high as 1kusd per mBtc, before maybe slowly dying / being replaced / etc?.

I was about to write concerning this matter. So the answer is the OP in the new thread.

Butters

newbie

Activity: 40

Merit: 0

Hello Op, thank you very much for this thread. I want your honest answer to 1 question. With all your knowledge of bitcoin, from 0 to 100 what would be your honest guess about the probability of mBtc getting to 1000usd, and the probability of crash and burning.

What about the probability of going higher, but not as high as 1kusd per mBtc, before maybe slowly dying / being replaced / etc?.

Thank you.

l0os3

newbie

Activity: 18

Merit: 0

The fact that I mined in 2011 and sold when it crashed hurled me into a deep depression Wink

I wish I would have looked
At this as an opportunity to invest and not so much a get rich quick scheme.

Thanks for the post!

BitDreams

hero member

Activity: 503

Merit: 501

Quote from: silversurfer1958 on November 29, 2013, 08:42:37 AM

Quote from: RAJSALLIN on November 29, 2013, 04:06:25 AM

silversurfer, I think your son has a better chance of a much greater return if he just forgets about those 0.1 bitcoins for a few years and doesn't sell any. Silver is a nice alternative but it's potential is so much lower than bitcoin it's not even worth discussing. Silver is great to hedge vs bitcoins but with a so small amount as 0.1btc it's just better to hold on imo.

He has 1.2BTC already I gave him, he's holding that, this 0.1BTC is really a little fun, get him used to thinking about money, investments, hedging strategies, discipline, etc, and hopefully, he gets to stack a few shiny Silver coins, so this is just a bit of fun for him, if he did only have the 0.1 you'd be right, far better for him to hold.

Great and fun idea!

SlipperySlope

hero member

Activity: 686

Merit: 501

Stephen Reed

Quote from: Jutarul on December 03, 2013, 02:20:46 PM

Quote from: canth on December 03, 2013, 02:03:25 PM

I think one of the toughest parts about the plan is the temptation to buy back in after a rake. Example:

- BTC briefly touches a new ATH at $1,000
- sell 10% for fiat
- BTC plunges to $500 a week later
- buy back in and hold for BTC to reach $1000

Assuming a strong belief that the new ATH is a realistic value for BTC, I for one would be very tempted to buy back in with the 10% I had just sold and wait again for BTC to double again.

In that case the SSS could be enhanced by a speculative component: 10% non-reversible rake and 5% reversible rake. The reversible rake would trigger a buy-back at a price point which e.g. is at half the price point at which it was used.

E.g. assume a (USD/mBTC) scenario by starting with 10 BTC ($10k USD) : 1->2->4->2->4

15% conventional rake strategy at each doubling: (USD/mBTC, BTC, USD)
1, 10, 0
2, 8.5, 3000
4, 7.225, 8100
2, 7.225, 8100
4, 7.225, 8100

10%nonrev/5%rev rake strategy at each doubling: (USD/mBTC, BTC, USD)
1, 10, 0
2, 8.5, 3000
4, 7.225, 8100
2, 7.650, 7250
4, 7.225, 8950

The 10% acts as a hedge, the 5% acts as a time-based arbitrage from which you gain additionally.

I would allocate very little of the rake amount to buy-backs because otherwise a major benefit of SSS is forfeited - if bitcoin subsequently crashes to zero, buy-backs simply compound the loss.

Aido

sr. member

Activity: 248

Merit: 252

1. Collect underpants 2. ? 3. Profit

Quote from: ?? on ??

Thank you for this savings plan Risto.

+1

Topic: (SSS) - A Sane and Simple bitcoin Savings plan - page 8. (Read 84941 times)