During a gold rush, sell shovels
People like to talk about cryptocurrencies, particularly Bitcoin, as an investment. I don't think it is one - to me it's pure speculation. If you want more details about why this is the case check out Nassim Nicholas Taleb's white paper on it.
But if your friend/colleague starts talking about it and they are not particularly statistically savvy, and you can't sneak off before being involved in the conversation, there's a stock standard response I have when they ask why I'm not into it.
"Can you pull out your Blackberry to show me the price of it?"
They will typically laugh and say who has a Blackberry, or just look at you funny as they have never heard of it. You then say that Blackberry's were the first "smartphone" and all the rage but where are they now? They got annihilated by better technology and no longer exist. There's a good chance the same thing will happen to Bitcoin and all the other coins available now.
But what if crypto does take off? Won't I miss out on the boom and be poor?
Because I own the shovels (graphics card manufacturers) that the (crypto) miners are using to search for their gold. NVIDIA is the leading manufacturer of the graphics cards which are essential for the mining, creation and utility of cryptocurrency. Long story short - without these graphics cards crypto does not exist. NVIDIA is one of the largest companies in the USA, and hence is in VGAD/VGS which I own.
In addition to that I own the warehouses where some of these mining centres are run (via DJRE), the electricity providers that generate and sell the huge amounts of energy currently use (via IJH), the semiconductor companies that provide chips for the hardware being used and on and on and on......
So if Bitcoin goes to $0 in value these companies will take a hit, but they will just switch production to something else or be replaced in my indexes by something new. Either way I will barely notice as they are but a few of the thousands of companies and properties I own. The people who are in the Bitcoin musical chairs game when the music stops are the ones who will pay the price for it.
Don't be the 3 billionth person jumping on the get rich quick bandwagon when these speculative booms happen. Own the companies that sell the shovels to them, along with everything else.
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For Maria, Claudia and eventually Lily