BitCoin, Bubbles & Wisdom
I have been through two bubbles: 2000 and 2008. The first one knocked me down. The second; knocked me out. With decades of knowledge accumulated I finally found the true meaning of wisdom while curled in the fetal position on the floor after after the government took over AIG and diluted the stock to $2 from $30 the previous close. I had everything in AIG because the Chairman of the Board and Bill Gates came out saying the company was fiscally sound and after all it was the biggest Insurance company in the world. What could possibly happen? I did my due diligence, macro environment analysis and technical chart studies, but like life one sometimes needs to peel the onion a little more. I found that knowledge alone is not always enough. There is something profoundly mystical about the intelligence learned from experience. Hence:
Knowledge + Experience = Wisdom
So, here we are in 2017. I see the charts and believe me I can dissect charts like you wouldn't believe. I hear the rumblings. I see the FOMO (Fear Of Missing Out).
Different vehicle, different time, but same road.
Having gone through two bubble times, and we are in one I assure you, I see the similarities and the uncertain "X" factor that makes "this" time unique. Same as the "X" factor during the Internet Bubble, Financial crisis, heck the Mississippi Company in 1719. "X" made "those" times unique. This "X" factor is what drives bubbles. The exciting uncertainty of something so new, so revolutionary no one could begin to understand "its" impact on the world forever.
Sound familiar? The Internet, Mortgage Backed Securities and Collateralized Debt Obligations, or a 'New World' monopoly trading company. These things were new, revolutionary and certainly did change the world forever. But whether technology or complex financial instruments, there will still be a massive emotional surge near the end (FOMO) of the bubble before markets consolidate, years later normalized, people are able to get in at respectable valuations and finally about 10yrs later all will be forgotten and the new "X" will take hold.
Today we still have the Internet and it has changed the world forever. Today we have those financial instruments with different names that changed financing, regulations and so many lives. Today we have the opportunity of two recent Boom times to look back upon. Today we have the ability to choose wisdom based on those recent past experiences and our knowledge of the changing world around us.
The reason why I haven't called Bitcoin itself a bubble as so many have is I believe there is value in alternatives to fiat currencies that are being incessantly debased. We are in emergency times. Global debt is up nearly $100 trillion since 2007 and there are scores of new bubbles everywhere now. But like all times, only one name gets called to attention and becomes the Brand name for this time in the future.
History shows us nothing in the market goes up straight forever. History has also shown that the dangerous thinking in these times is "this time is different." "X" is "X" no matter what time period and one's belief will not change that. So I urge people to use not only knowledge of what the future can bring but also the lessons of the past to navigate these VERY easy money making times because it won't last forever and it will consolidate at some point. No one knows when but one thing I learned is that emotions were my worst enemies at times like these. Who doesn't love seeing the $'s grow and grow without having to do anything. It's human nature. It's beyond exhilarating. Believe me I know. Just take my and other's experience and apply it to what you know and have hopefully gained monetarily to come out ahead when we return to normal. I'm rooting for everyone and not just for the person but some many macro economic reasons too. No one likes to see the pain of others but unfortunately their will be one's in pain when the dust settles back into normalcy.
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