Bitcoin Going Off The Rails On A Crazy Train

On Monday I wrote an article for TheStreet.com about the psychology of the Bitcoin craze. Since that article it had rallied another 50% into early trading on Friday. According to Bitcoincharts.com the price is at $1213 as I write this post. Part of the equation for the currency is that it is not inflationary which is supposed to be in contrast to central banks which are inflationary by the nature of their policies. The chart captures the price action and I took the screenshot where the cursor hovered over a time from early in the year when the price was below $25. Although Bitcoin is intended to be a currency, this sort of volatility hurts the chances that it can be widely adopted at some point (I realize some are using it for transactions). This is not to say Bitcoin should not exist, people should be able to speculate on whatever they want to and own the consequences good or bad but a vehicle for speculation (up 50% in a couple of days) makes for a poor choice for a currency. Typically when a chart goes vertical as the Bitcoin chart has it comes back down almost as fast (check out Andrea Electronics and Comparator Systems). If you can point to an instance where something went vertical and did not subsequently crash, please leave a comment with the particulars. If it turns out that years of ZIRP and QE have distorted markets leading to some horrible consequence then things like the mania with Bitcoin will be looked back at and with full conviction of hindsight bias we will regularly...

Bitcoin Going Off The Rails On A Crazy Train

On Monday I wrote an article for TheStreet.com about the psychology of the Bitcoin craze. Since that article it had rallied another 50% into early trading on Friday. According to Bitcoincharts.com the price is at $1213 as I write this post. Part of the equation for the currency is that it is not inflationary which is supposed to be in contrast to central banks which are inflationary by the nature of their policies. The chart captures the price action and I took the screenshot where the cursor hovered over a time from early in the year when the price was below $25. Although Bitcoin is intended to be a currency, this sort of volatility hurts the chances that it can be widely adopted at some point (I realize some are using it for transactions). This is not to say Bitcoin should not exist, people should be able to speculate on whatever they want to and own the consequences good or bad but a vehicle for speculation (up 50% in a couple of days) makes for a poor choice for a currency. Typically when a chart goes vertical as the Bitcoin chart has it comes back down almost as fast (check out Andrea Electronics and Comparator Systems). If you can point to an instance where something went vertical and did not subsequently crash, please leave a comment with the particulars. If it turns out that years of ZIRP and QE have distorted markets leading to some horrible consequence then things like the mania with Bitcoin will be looked back at and with full conviction of hindsight bias we will regularly...

Last Day of Trading for RRGR

Today is the last day of trading for RRGR the ETF that I have been subadvising in partnership with AdvisorShares. Quite simply we failed to raise sufficient assets to make the fund viable. We tried to do something and it did not work out. Successes and failures are a part of a full life. I had a very fun time with all of it and really enjoyed working with the crew at AdvisorShares for the last couple of years as we first went through the process to bring the fund to the market and then the ongoing process of managing and supporting the fund. It would have been much better if the fund had succeeded of course but having fun and liking the people you work with is not the single worst outcome we could have had. To say I am grateful for the opportunity that AdvisorShares gave us would be an understatement, it was a genuine show of faith in what I have been trying to do with the blog and what our firm has been trying to do for our clients. Thank you again to AdvisorShares and thanks you people who’ve been reading the blog over the years who offered encouragement along the...

Last Day of Trading for RRGR

Today is the last day of trading for RRGR the ETF that I have been subadvising in partnership with AdvisorShares. Quite simply we failed to raise sufficient assets to make the fund viable. We tried to do something and it did not work out. Successes and failures are a part of a full life. I had a very fun time with all of it and really enjoyed working with the crew at AdvisorShares for the last couple of years as we first went through the process to bring the fund to the market and then the ongoing process of managing and supporting the fund. It would have been much better if the fund had succeeded of course but having fun and liking the people you work with is not the single worst outcome we could have had. To say I am grateful for the opportunity that AdvisorShares gave us would be an understatement, it was a genuine show of faith in what I have been trying to do with the blog and what our firm has been trying to do for our clients. Thank you again to AdvisorShares and thanks you people who’ve been reading the blog over the years who offered encouragement along the...

Second Article Posted

My second article related to personal finance aimed at Firefighters and EMS personnel is posted at thebright.com. It is humorously titled If You Don’t Control The Problem, The Problem Will Control You and is about taking on too much debt. I hope you can check it out. I included a neat picture...