2.23.2018

Bitcoin, Gold, Cash, or Equities


Let's start with a hypothetical $ 10,000 (that I don't have). But upcoming the hypothetical investor is about ready to receive $ 10,000: perhaps from a bonus, an inheritance, a tax refund or pennies from heaven. What would I do?

Bitcoin? 

This expresses my view perfectly: Bitcoin and the Incredible Power of Fiction
"When the history is written, cryptocurrencies will likely be described as one of the most brilliant scams in history." ... "We all laugh at primitive tribes which used large stones (or pigs) as currency. Well, laugh as you will, but a stone or a healthy pig is something. Cryptocurrencies are nothing except the marketing power of inventors, financiers and others who love the idea of buying a black box (which is obviously empty) for the price of a Kia and dreaming that it will turn into a Mercedes. There have been times recently when this dream has materialized within hours. This is not just a bubble. It is not just a fraud. It is perhaps the outer limit, the ultimate expression, of the ability of humans to seize upon ether and hope to ride it to the stars."
As an aside, I have .0039 in Bitcoin. I "invested" a dollar 3 years ago.

You'll need a bit (no pun) more than $ 10,000 for 1 Bitcoin today





 Gold? 

 A metals broker I have used: Apmex
Negatives:
  1. Must be stored (safety deposit box)
  2. No dividend
  3. While there is a market, there's no ready market: to sell you have to box, insure and ship
  4. Some view Gold the same as Bitcoin: "“(Gold) gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” ... "Whereas, you know, Coca-Cola (KO) will be making money, and I think Wells Fargo (WFC) will be making a lot of money, and there will be a lot — and it’s a lot — it’s a lot better to have a goose that keeps laying eggs than a goose that just sits there and eats insurance and storage and a few things like that." Warren Buffett
Positives:
  1. If the sky ever falls ... (remember ... if the world "ends" the Internet will be down!)
  2. Beauty
  3. Makes a nice gift to grandkids when they turn 18 (my plan!)
  4. You can buy an ETF 
  5. To counter Warren Buffett:

At today's rate, $ 10,000 will buy you this:


Cash? 

Have an solid emergency fund: How to Build an Emergency Fund When You're Counting Every Penny - There are ways to save money even when money is tight
You’ve heard it time and again: It’s important to set aside three to six months’ expenses for an emergency fund. Easier said than done, right? If you have a lot of debt, live on a fixed income or have unpredictable expenses, putting aside that much money can seem nearly impossible. The good news is you don’t have to do it all at once - even a little money in savings can go a long way.
Comment: $ 1,000 isn't enough! If you have none, use that $ 10,000 for your emergency fund!

Image source


Equities?
I'm going with Warren's view expressed above. I have an emergency fund. I've got my couple of coins. I would go with a solid dividend stock like sleepy General Mills (in the news today because they are acquiring Blue Buffalo). 100 shares of GIS (which pays a 3.6% dividend) for about $ 5,400 and 100 shares of Coca-Cola for about $ 4,400 (pays a 3.6% dividend as well) 


Comment: If interested in Bitcoin, Coinbase is a good place to buy. But it's funny money








Contrarian view: Bitcoin is a better gold





On ICO's


I don't either!





Posted by Jim Peet at 2/23/2018 10:36:00 AM

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