Topic: Tech. Analysis vs. Value Investing vs. Growth Investing vs. Narrative Economy (Read 550 times)

I'm not defending the dollar, I'm attacking horrible logic.  Using even your paired down examples, you're still grossly overstating the effects of depreciation any person experiences. The max depreciation any person could possibly experience is if they were born with all the money they'll ever have and then just hold it in fiat for their entire lives. If you can't see why that's such a faulty premise, I don't think I can break it down for you further.  But to summarize the most easily identifiable faults in this logic:  1) the majority of wealth is not held in fiat, it's held in other assets; 2) fiat is not held for significant amounts of time in significant amounts; 3) people are not born with all the money they'll ever have, they're constantly earning new money throughout their lives.  You're not having an honest discussion about what the depreciation of the dollar actually is, that's all I'm pointing out.  The chart that I was responding to is a joke for anyone looking for an honest discussion and not a circle jerk about crypto, which is largely what this board is; more of a cult where everyone just shouts down people who aren't in the cult rather than a bastion of intellectualism.

Are you defending US dollar right now? I mean why would anyone really defend dollar on bitcointalk? But let's talk about how you are wrong just so we could maybe reel you back into the crypto world and remind you that fiats are horrible and that is why we are in crypto. You said "using a timeline longer than any human lived", so your point is that dollar didn't dropped that much in one life time and I sort of understand your logic there, if it was true that would have made sense.

Let's put the last 80 years as one life span? 80 years ago was 1941 closest to that we have is 1935 and 1947, both of which are pretty close to 1 dollar of that day having purchasing power of 20 dollar today. That is just one life span. Want to see second? 80 years before that was 1860, it was literally the EXACT SAME 80 years before that. You see, dollar lost its power, it was consistent and powerful, 80 years ago it was beautiful, so beautiful that it kept its power for 150 years, what happened? It went down horrible in the last 40-50 years.

Using a timeline far longer than any human being lives is pointless and purposefully deceptive. Nobody lives long enough to see dollars depreciate on that magnitude, so this graph is meaningless for practical purposes because not a single person in history has ever suffered anywhere near the depreciation the graph depicts. Second, people generally don't hold a significant amount of dollars for a significant amount, further diminishing the effects of the depreciation shown.  Wealth is invested into assets in search of yield.  The whole depreciation argument has always been grossly overstated.

You are right, that before arguing about it, we need to define the "falling" Because, declining purchasing power is the issue certainly, but mostly for non-elites. But the "not-falling", which I was referring to, is the below one:

Global Reserve Currencies in Use & Their Share


OTC FX Currencies Turnover Share


But, sadly or gladly (depends on the side the one picks to be), we have BitcoinBTC now, and the recent events with GME, AMC, etc. showed well that the "negligible people" (as seen by those hedge funds) can be a driving force all together that costs those billionaires their jobs, wealth, status and reputation.

Well, in this case, we have to define what is "failing". Here's the graph of purchasing power of one USD in every year from the start up to 2020:

(The purchasing power of 1 USD in 2020 is 1 on the y-axis)

If it's not "failing", what is it, then?

Yes, USD is a narrative-based project, with a strong story behind it, created by Alexander Hamilton & Co. And that's why it has lasted for a long time. But as you rightly said, few people would consider it a good "project" nowadays. So, it's time to start switching to Bitcoin, I guess.

I think you are making good points about the current state of Bitcoin, however I don't agree that much about how it began. Maybe it's good narrative played the role of making it good and bringing it where it is now? Just like I described before that it's self-reinforcing mechanism where good narrative plays to improve the fundamentals, which play to improve good narrative, and it goes on like this. And that could work with alternative assets like Bitcoin, and with traditional ones as well, such as stocks.

It may be true that, in the case of bitcoin, a some kind of narrative played a very important role but I believe after 12 years it's not about the narrative anymore. Bitcoin grew as a protocol, as a groundbreaking technology, as a new alternative financial layer to build next-gen fintech apps on top of it (LN being the most important to me). Its fundamentals have never been healthier than ever: hashrate growth, daily txs, value transferred, new users etc.
To me, there's no competitor in this sense for bitcoin after 2010. History is proving satoshi was right from the start.

I don't agree that the bad projects will always fail. If they are hyped well - they can last for prolonged periods of time. Yes, of course everything in the end will die and fail (even the good ones - that's just the nature).

The only perfect example of that probably would be - the United States Dollar I guess nobody would argue that it's not such a good "project" at least nowadays, yet it's the only dominant financial power around the globe, and is lasting for pretty long. It certainly started not out of narrative, but it continues its success on it too (US gov is too cool to fail, US gov will never default, etc., etc.). So here's an example of a bad, partially (or entirely) narrative-based project that is not failing

You are right, if a project was bad from the very beginning, it is going to fail no matter how hard you hype it. But let's forget about those doomed bad projects, and talk about good ones, among which hard to say which is better. Take these from the OP, for example:


I agree that we are entering the era of narrative-based economy, when a good story behind an asset can be crucial for its success.

At the end of the day, best competitors will win no matter you flex your assets so bad.

There are also stories who are not even real and can still be effective that's why there are investors who are getting baited by Ponzi schemes.

But on the other hand, making good project will really help each individual to learn, to understand, and to engage more about the market and economics. This will help you become more wise and business-minded that will help you make another strategies to attract future successful investors.

I would have never guessed I would see a long john silver message related to investing on bitcointalk, specifically not about investment considering how pirates were reckless at the time and this is just a book about them and a novel, not reality, which could mean you meant the author and not the pirate himself All jokes and shock aside, I do agree that this is a great deal of diversification when we are talking about bulk amount of gold, but that doesn't really apply to what we have in real world do we?

For example, if you have 1000 dollars, you can't diversify like that, so you have to end up with buying some stocks, a bit of gold, maybe some crypto like btc and eth, and you are already out of money, but you already spent maybe 50 bucks on the diversification process as well, and you just wait for it. Whereas Long John Silver didn't had anything like that, he had business' and expeditions, those are very different from buying btc and waiting.

You just wrote a plan that if followed by common people would make them at least 50-80% more wealthy than they are now Yet, only few ones will actually follow and succeed.

The main character of Treasure Island, pirate John Silver, is my example of how to manage personal finances. 

He adheres to the principle of investment diversification. 

He invested part of his capital in his own small business (the "Spyglass" tavern). 

The second part he invested in commercial banks at interest.  At the same time, he divided the deposits between several banks (so as not to attract the attention of regulators). 

In addition, he reserves a third of the capital for investments in HYIP (investment projects with high risk and high potential profit).  Captain Flint's Treasure Expedition is an example of such a project. 

At the same time, John Silver is a conservative investor.  His main principle: "The main thing is not to make money, the main thing is to save."

I agree with you. That's really great representation of PoW But we also need to consider that such things were abandoned for a reason, and should try to understand it's implications for our future in the modern context.




Yes, the novel is really great. That's the reason many kids in Russian schools are forced to read it yet, barely even 1% at that age can grasp the meaning and insights at that age. There's also a says "everything new well forgotten old", same with many aspects that we are experiencing today.

Yes. I think its fair to say that while technology and methods have changed. The game remains the same.



The rock based currency above could be considered a proof of work (PoW) precursor to bitcoin. (As many have noted over the years.)

A text book might say proof of work was invented by Satoshi Nakamoto in 2009. But the general idea itself could be hundreds if not thousands of years old. Utilized by many cultures throughout history.




Exactly.

The story of Edmond Dantas withdrawing his significant assets to destroy a fractional reserve bank in vengeance, holds true even today.

Which is why we see many banks limiting amounts on withdrawals.

Yes, there is very little new in our world.  Everything we see happened in the past.  I love reading old classic novels. 

I find many interesting and instructive things in them.  For example, I like reading the novel The Count of Monte Cristo by Alexandre Dumas.  It is essentially a finance textbook.  The main character (sailor Edmond Dantes) dug up an ancient treasure (mined bitcoins).  Accordingly, he had a problem with how to cash out the mined treasure (exchange bitcoins for fiat currency).  Edmond Dantes successfully coped with this task.  He also took revenge on his enemy (banker Danglar) by manipulating the stock exchange.  As a result, Danglars' exchange positions were liquidated, and he himself was ruined. 

Reading about all this is very exciting.

I can't agree that the "narrative investing" applies to startups only. In fact it's quite applicable to the giants as well, which is strongly evident from S&P500 with vs. S&P500 without FANG+. Same for large caps doing vaccines, same for public companies suddenly engaging in BTC deals. It's just since most of the members here, including myself are more tech/fintech orienter, we know more about this area, but this is well applicable to healthcare, and other industries too. You are right about the Fed though they seam to stop carrying about what they buy into. And about TA & fundamental analysis - I started another thread related to this quite some time ago, where we all touched upon this too. You can check it here if you would like to: https://bitcointalksearch.org/topic/m.55829799




Yes, here I 100% agree with you. Especially with those journalists, as they always twist the original source and just try to make it more buzzy and popular, so when we get to read from them, sometimes it's an entirely different story.




What you refer to is that the history always repeats itself. Also depends on the time-frame, because as you correctly noted there can be cases where we can find something similar hundreds of years ago. However, while principles might be same or similar, the reality is different. If before for TA you would need to actually write down every single stock move and then draw the lines and make investment decision, now it happens in less than a second. If before to get the fair estimate of asset/company value you would need to physically go there and beg them to give financial statements to be able to even calculate net profit margin, now it takes less than a minute by googling for appropriate metric in most cases. If before to spread the narrative you would either need to stand on the street and shout or go to gossip with everyone around in the kingdom, or push hard the chief editor of newspaper to let him print your narrative story, now all it can take is just a few posts on unknown blog or few tweets, fulled with fake likes/retweets/comments. So as I said - principles are surely same - borrow, invest, interest, margin, etc., etc., but the conditions / environment is entirely different.

I don't think there is anything truly new or old when it comes to money and investment.

A person could open a bible and see money changers in jewish temples using the same narrative based marketing strategies investors use today. The same with Hayek vs Keynes potentially being an illusion of choice narrative. Trickle down economics, modern monetary theory, austerity and other things. There have always been commonly accepted myths and legends built around financial institutions. In an effort to push manufactured consensus that serve underlying agendas of various types.

If anyone's seen the movie Rocky 5. The families financial advisor is given power of attorney. He invests Rocky's money in a risky venture expecting to turn a profit for himself and return the funds before anyone notices. Gambling with the money of creditors this way dates back centuries. There's a legend about the Rothschilds using this to multiply their wealth in the 1700s - 1800s(? If I'm remembering correctly ?). I think the same could be said about virtually any theme relating to investment and money. There are past examples dating back through history. They're all old things, rather than new.

I agree. I think people as old as Warren Buffett, 90, physically can't comprehend the current situation. Even Buffet himself knows that and that's why he hires younger investment managers. So, when journalists, in order to create a clickbait article, ask Buffet his opinion on this or that, we shouldn't blindly follow his advices.

The "narrative investing" theory seems to be more related to startups,instead of old and established companies.This theory looks OK,but I have a different opinion about the future.
2020+ investing will be like:Buy every asset that has at least a little bit of legitimacy and hype,price bubbles are gonna grow,the Federal Reserve keeps printing money
I'm not quite sure that technical and fundamental analysis are 100% obsolete though.