Joseph Kennedy, a famous investor in his day, exited the stock market in a timely fashion after a shoe-shine boy gave him stock tips. Many people have used a taxi driver to represent the same cue – push the sell button when he/she starts giving you tips.
I know little of bitcoins and blockchain. I have tried to get my head around it all but confusion reigns. In fact I get the sneaking suspicion that the only people who know what is going on are those that conjure these esoteric coins – everyone else is baffled.
This leads me to admit that I did succumb to the hype around cryptocurrencies. I actually bought bitcoins via shares in a stock. The company owns a chunk of coins and helps other companies with their cryptocurrency and blockchain shenanigans. The stock was recommended in an investment newsletter that I subscribe to, listing it as a small cap buy.
A few weeks weeks ago I was up quite a bit on the trade due to the bitcoin surge. However, while in a coffee shop, I got talking to a young bloke (barely 20 years old) who gave me the heads up on bitcoin and other cryptos. He showed me an app on his phone with ticker trades in several currencies and said that he had just bought four of them and his mates were jumping into the craze. Now this kid was excited about making big dollars — and was looking for a casual job while studying. Like me he obviously had no clue as to what, how, why etc about them.
Mmmm – taxi!!??
I said to the young lad that I bought some bitcoins as part of a stock trade but gave him a warning about casinos and that it’s all going to go pear shaped – sooner rather than later.
As soon as I got back to my computer I sold my stock. Bitcoin was close to $US14,000. Meeting that young bloke was my shoe-shine boy/taxi driver moment. (As it transpired, the very next day, my “newsletter broker” said sell the stock). Now, as I write, bitcoin is around $US6,000 and the stock I once owned followed it down.
So I thank that young bloke in the coffee shop. I was very lucky. Of course the stock could surge in a few weeks — who knows. Stock markets and trading are too complicated for me so I rely on advice from people who actually have oodles of experience. Plus I am always mindful of what my “newsletter broker” says: “If people are punching the air in elation – it’s time to sell”.
So should you buy Bitcoin now at 6,000? I really can’t say. Does anybody really know? There is a big future in the blockchain technology but Bitcoin is likely to go by the wayside as better more efficient cryptocurrencies push it aside.
And not to worry, manias are like buses – there’ll be another one along shortly.
Dear Chris, the main reason I won’t buy bitcoin is that it uses incredible amounts of power (electricity) for each transaction, something like 16kw. Plus it seems it was created by the CIA, enough said there 🙂