Topic: You are speculators not investors (Read 3541 times)

I try again:

Saving (derogative term: hoarding) is acquiring things or money for later use. You can sell them, without adding value (see below). You can for example buy food and hold in prospect of a catastrophe. You can trade it for something that someone else has saved. They can gain or loose value, doesn't matter. You can't add value to money, but they can appreciate in the market.

Investing is buying capital goods with the intent of making something of added value. Food can also be an investment, if you add value by repackaging, distributing or serving it.

Speculation is a derogative word for investing, meaning short time high risk, seen as non virtuous.

Looking at it again, saving can also be speculative if you take the risk that the stuff you save (money or things) will gain value in the market without the saver adding anything to it. So we partly agree.

If you move from the US and convert your USD to EUR are you now a speculator in euros?

Sorry, edited my post. Well, we are disagreeing.

You think this because they money you have known in your life (fiat) is worthless. If you would have grown up with gold as the main form of money you would be talking differently. Bitcoin is just the same, it's as much a commodity as it is a form of money.

Furthermore, my above statements hold true for FX trading also. There is no way to buy fiat cheaper than it's actual value (a big fat zero) so everyone doing FX trading is speculating.

Not if you buy money.


Only if you buy capital, and it is short time and risky, and seen as not virtuous by yourself or others.


Sure.

Buying something for the long term because you feel the market undervalues it is investing

Buying something because you think you'll be able to sell it someone else for more, irrespective of underlying value, is speculating.

I am an investor.

Investing is buying capital goods with the intent to produce something. Either directly, via equity shares, or indirectly by lending.

Holding bitcoins is not investing, if bitcoin is money. Then it is just saving money. If it is a commodity, it is also investing.

Speculation is a derogatory name for investing. Some people regard short time, high risk investments as less virtuous than value investing. I don't. If you invest short time, high risk, you can even out the risk by investing in many companies. That is what the venture (= risk) funds do.

http://www.dailymail.co.uk/sciencetech/article-2316522/The-Apple-set-sell-250-000.html

There's an excellent chance you will end up suicidal when 1 BTC becomes too pricey for the avg person to buy one.
I know how that feels, when I sold thousands of XC coin bought at 4k sat at 20k sat then watched helplessly as it climbed to 500k sats. Normally I wouldn't wish that feeling on anyone, but with you I'll make an exception.

How high you expect bitcoin will go? And at what price will you consider selling?

I'm sympathetic to OP's post.

I think spending bitcoin, building merchant acceptance, or starting and promoting services is "investing" in the protocol. Sitting on your arse waiting for a bitcoin to equal a bazillion dollars is not particularly useful, although I appreciate that the higher number of individuals holding coins the better.

Disclaimer: I'm sitting on my arse waiting for a bitcoin to equal a bazillion dollars. Rationally though, I know I could do more. Eventually I will, I'm a little time-poor at the moment.

The line between investing and speculating can be blurred at times.

I know people see bitcoin diferently when they are holding, and diferently when they cashed out, but to what point does one go when they sell and cant rebuy lower.
Answer is simple; one creates a topic to spit on others who didnt make the same mistake.
I may be wrong, but doubt it.

Arguing semantics on the internet... there are no winners, only losers.

When I think of "investment" I think of something (business, real estate, etc.) that produces cash flow and in turn pays the investor out of the profits earned. The profits are earned by providing value to a paying customer.

For example if I owned rented real estate and rented it for a profit that would be an investment.

When I think "speculation" I think of seeking out (perceived) bargains and then re-selling them at a higher price to make a profit.

If I bought the real estate because I perceived that it was under valued and that I could re-sell it later for a higher price, that would be a speculation.

A lot of times people in real estate make money by a combination of those two ways, but don't really make a distinction between the two.

I think in terms of Bitcoin, buying and holding BTC is not really an investment in the more traditional sense, but I can see how the argument can be made. If holders of BTC did not have the foresight to recognize the value of Bitcoin, then in turn nobody would bother developing the infrastructure or services that do earn profits and create real value, correct?

I suppose that argument might apply to any speculation and perhaps there is no definite line, but as a general rule I would view starting or buying a BTC business that earns a profit on services to be more of an "investment", rather than just holding BTC.

Bitcoin is an experiment not an investment. You can be "emotionally invested" in it's success which is another metaphor.

Other then that your Bitcoins (the number that represents your balance in the bitcoin wallet) will never be an investment nor will it make you an investor.
That is true even if the experiment succeeds on all accords (whatever that may be). What I think about the probability of it's success is irrelevant for the question of whenever people following the buy & hold strategy are investors or not. If it succeeds they would be very good speculators but still no investors.

This is the exact point where our opinions differ then.

If Bitcoin ever becomes something useful, enabling people to do something they couldn't have done before, it will have been through the early liquidity provided by us. That's what I'd call it an investment.

If Bitcoin fails to ever become useful, then I'd call it a "failed investment", which is still a form of investment.

I think, for you in order to not call it an investment at all, you have to work from the premise that Bitcoin cannot possibly become useful beyond something that existing implementations of currency already provide.

Agreed on that last point?

he didn't say that either. he just thinks all stocks pay dividends, he did not specify that SOME stocks use the money and pay dividends with it, he just said thats what stocks are. so either he is being purposely vague/wrong to get a response(likely) or he is just dumb(more likely?)

Well those people are smug and annoying. So yes.  Lol

So you want to see people with faith in something lose their money, this is funny to you?
You are a sad, sad man.

Drama, laughing at it and when I feel like it steer some up on my own.

Besides, I'm fine with speculating (or more harshly gambling) and do it myself every once in a while.

ElectricMucus, why are you here? If I have a low opinion of something I can tell you the last place you will find me, wasting my time on a discussion forum of that thing.

ok but that is still not investing it's another use of the metaphor for "investing into my future" buy saving, just the "me" has been substituted for "us".

There is no investment in the literal sense, no value is being created in addition to the value of the fiat put in to buy the bitcoins. There is no return on investment taking place. It's the same thing as buying a gold coin, or any commodity. The gold mining industry benefits from the demand you create such as the bitcoin miners benefit.
There is no conceptual difference between the two things except:

I can't do anything with the Bitcoin except to spend it or keep it. Such as I can't do anything different with cash under my mattress. I even go as far as to say I would "support" the economy of the country issuing the currency the same way you would with your bitcoins and the bitcoin economy. Perhaps a better analogy would be USD reserves held by foreign nations like china, and the concern they might want to dump it some day. Are the Chinese investing in the US then? I don't think so, but perhaps you do.

Anyone cares how to call this "action"? Any difference comes with some other "word"?  I am failing to give a f*ck.

I loved the fist fighting part.
You made my day, thanks.

Imo There is no real difference apart from the fact that an investment has a better sound to it. An investment sounds more certain to succeed. In both cases you put money in a product to make a profit.

Alright, I'll unwrap the argument assuming it wasn't clear what I meant in the first place:

To invest in something implies that capital is provided to something which, without that capital being provided, wouldn't work as intended.

Your "cash under the mattress" is not an example of that: nobody needs to provide capital to your pile of cash for it to be placed under your mattress.

Disagree with the goal and the way it is pursued or not, but some of us think Bitcoin is already a minor, and will become a major a) medium of exchange and b) store of wealth.

To work as a), liquidity has to be provided. To get near becoming b), wide acceptance, value stability, and some liquidity needs to exist.

In either case, any type of trading and usage activity (short term or long term) furthers the 'liquidity' and 'acceptance' points. Stability is trickier, although I disagree that short term trades necessarily increase volatility.

In summary, everyone who holds any amount of bitcoins for longer than a few moments is, effectively, investing in the bootstrapping event of a global decentralized currency.

I beg to differ. The fiat money invested by late adopters into bitcoins is utilized by early adopters to buy mansions, luxury cars and silverware.
Thus requiring even later adopters to invest fiat into bitcoin, so the late adopters themselves can buy mansions, luxury cars and silverware. 

you too.

You were more entertaining when you were at least trying to make sense. /shrug

Yes you "invested" in terms of a metaphor - in your own future.

I grant you that, and in a sense this is also true in terms of "investment" as "saving", like you people are doing with Bitcoins. It's "investment into your future self". It's not a literal meaning, it's more a play of the words kind of thing.
But going from there and coin yourself an investor because of it is where it breaks apart.

I can "invest into" a house, a car, education, kids, a gun, a savings account or bitcoins. That however does not make me an investor it just means I am "investing" into my future by having foresight and plans. The problem with bitcoins however is as long as you even care about the price you are not even "investing" in that sense.

Why not both?

Seriously though, there's arguments to be made for both sides, depending on how you see bitcoin.

I don't even know why we are discussing this, what's the point?

When you buy a rental property you are still investing. You buy the property, find someone to rent it and hopefully receive rent over time to cover your cost of funds less your expenses.

Speculation is something that is more of a gamble. Investing is doing research to determine that the odds are in your favor

Dude, get a freakin' life. Anytime you buy something in the hope it goes up in value you are investing.
I bought a nib Colt Python a few years ago for $2k, the same model is going for over $3k on GB. Did I invest in Colt the company? of course not, they stopped making them years ago. Did I make an investment? you bet your ass, and a good one.

This op is just brutal.

Please, tell us more "facts."  

From http://en.wikipedia.org/wiki/Investment

/thread

Come on, this is just schmuck bait. I hope this thread is just an example of boredom and nothing else.

There has been a tendency for many to get swept up in the excitement over something that is still very new and full of novelty, compared with what we knew before.  For something to be worthy of the title investment, it needs to be worth our time.  Many of us who have gotten involved with bitcoin mining have realized that it was a lot harder than we had initially imagined to just barely break even, after investing in equipment that rapidly becomes obsolete.  There has to be a better way of investing in this, to make it truly worth our time and effort.  Like the difference between investing in Apple stock and simply having invested the same money in Apple computer equipment which has over time become completely obsolete.

I can't help but snicker to point out that this subtopic is called the Speculation thread not the investors thread.
Now if it said Economics --> Investors then we would have a better point to argue 

yay!

Well there is investing in gold mines.
As far as this self delusion goes I'd say it's the Goldbugs that pretty much started it.

However the answer is more complicated than that, in particular the futures market and how its utilized by gold producers.
But buying physical gold and stashing it is def. not investment.

Nothing wrong w speculating but the replies are funny.  Bitcoiners get defensive when someone calls them speculators.  LOL

So investing in commodities (gold most prominently) is not investing either?

I posted that, "Investing implies letting money work in a sense that it is actually utilized by somebody else."
That was the key point, everything else was examples to illustrate my point. When "return on investment" happens has nothing to do with it.


But notice the terminology of ROI and how it is consistent.

Yes companies that just IPOd dont give dividends because theyre in a growth phase

They give dividends later in their maturity.  The OP said the dividend part is investment and the valuation is speculative. Nothing inconsistent here

IPO stocks??  What?  All stocks are first presented to the market as an IPO, or Initial Public Offering.  That has nothing to do with dividends.  Buyers of an IPO hope for price appreciation so they can see gains in their investment.  The same can be said for buyers after the IPO.  OP's definition is inconsistent with reality.

If I stuff cash under my mattress it also performs it's intended purpose, it stays there.




lol you see what I mean?

Good question.  Is bitcoin money?  If so, is money an investment?  Is my lump of fiat in the bank an investment?

Gold can be seen as a speculative investment (if the desire is for it to go up in value), but what if it doesn't go up in value?  Is it still a speculative investment?  Or is it just a store of value?

What if I just view my bitcoin as a store of value?  Then is it no longer seen as an investment, or a speculation?

Where do zebras get their stripes?

What is the sound of one hand clapping?

If a tree falls in the woods...?

We're participating in a superior currency model which will one day -- in the not too distant future -- free the people of the world from rampant government corruption and crony capitalism. We're all investing our money for a better tomorrow.

He didnt say that.  Hes talking about dividend stocks. IPO stocks dont give dividends

Per OP's definition, buyers of an IPO are investors, but anyone buying after the IPO is not.  Yet clearly without later buyers you would have no IPO buyers.  OP has a very narrow view.

If you hold then you have invested. If you keep holding while also protecting your investment, you are an investor. I am protecting my investment by calling all bitcoin opponents idiots and willing to fist fight for that matter. Others do it by promoting bitcoin and making what-is-bitcoin videos. We are all investors because we have something to lose and thus -- something to protect. I lied about the fist fighting thing.

Providing capital to something in order for that something to be able to perform its intended purpose  = investing.

Hence, we're investors.

This shit gets old, get your facts straight.

Investing implies letting money work in a sense that it is actually utilized by somebody else. Buying stocks is investing and speculation, the company issuing the stock uses the money and pays out dividends.
That's the investing part.
The actual valuation of the stock is speculation, so for instance the value of a stock can rise but the dividends stay the same, this for example happens with pump & dump penny stocks.

Venture Capitalists do pure investing, they don't want a stake in the company but just effectively giving out a loan.


The obsession with holding and then calling it investing reeks of self delusion on your part.
So hodlers - lets argue.