Very much enjoy your writing (and am particularly grateful for your recent CostCo and Sol Price work). Two comments
1. I came by WEB and Ben Graham on my second day at work in the financial industry in the summer of 1987 but only noticed them because the week before I had purchased (or more accurately had been sold) a Kirby vacuum cleaner, a company belonging to Scott & Fetzer which had been purchased by BRK earlier. When a deek neighbour showed me the most expensive stock on Wall St. on the Reuters terminal, I noticed the Kirby Cleaner in the blurb and that was that...pure serendipity but it has made ALL the difference, to misappropriate Robert Frost.
Secondly, your point about gloating is well made. Somewhere in the rubble of the crypto earthquake are one or two companies who will become the defining champions of the blockchain/crypto revolution, crypto 2.0 and they will be learning the lessons of their near-death experience, will have excellent stewards with a strategic vision of what their technology can become and the character to see it through. I don‘t have the skills to know which company or companies they might be, but every single episode in financial history has seen the survivors emerge from the ashes of disaster. This time will be no different. Think Amazon at $7.
In the case of FTX, customers are likely to lose money due to outright fraud rather than losses on the underlying securities they owned. Regulators failed to do their jobs. The system failed.
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I took an adult-ed course in "Scams and Scammers" recently. My prof's opinion was that he wasn't sure if Bitcoin (and other cybercurrencies) was a scam, but he _was_ sure that the cryptocurrency world was loaded with scammers. Certainly, the number of busted crypto banks, with all depositor funds lost, should have been a warning.
I'm not sure I would call anything in the crypto world a "security". That word suggests something which has a good chance of yielding a positive return. The argument for "positive return" should be stronger than "Someone else will surely pay more than you did!".
"The regulators failed to do their job" -- well, the mass of originators and investors were begging regulators to stay out! "We don't need no stinkin' regulators -- we have the blockchain ledger to protect us from fraud!"
"The system failed". Yes, but it often does fail to protect naive investors when a new paradigm appears. I don't remember the SEC ever claiming that _any_ crypto investment offered reasonable safety.
I may have just been lucky to stay out of it, or unlucky to have missed the early days of huge profits. I have decades of IT experience, much of it in the financial industry. Cryptocurrency smelled like smoke to me, and I avoid fires.
Very much enjoy your writing (and am particularly grateful for your recent CostCo and Sol Price work). Two comments
1. I came by WEB and Ben Graham on my second day at work in the financial industry in the summer of 1987 but only noticed them because the week before I had purchased (or more accurately had been sold) a Kirby vacuum cleaner, a company belonging to Scott & Fetzer which had been purchased by BRK earlier. When a deek neighbour showed me the most expensive stock on Wall St. on the Reuters terminal, I noticed the Kirby Cleaner in the blurb and that was that...pure serendipity but it has made ALL the difference, to misappropriate Robert Frost.
Secondly, your point about gloating is well made. Somewhere in the rubble of the crypto earthquake are one or two companies who will become the defining champions of the blockchain/crypto revolution, crypto 2.0 and they will be learning the lessons of their near-death experience, will have excellent stewards with a strategic vision of what their technology can become and the character to see it through. I don‘t have the skills to know which company or companies they might be, but every single episode in financial history has seen the survivors emerge from the ashes of disaster. This time will be no different. Think Amazon at $7.
Great writing - thank you for it. And good luck.
>>>
In the case of FTX, customers are likely to lose money due to outright fraud rather than losses on the underlying securities they owned. Regulators failed to do their jobs. The system failed.
>>>
I took an adult-ed course in "Scams and Scammers" recently. My prof's opinion was that he wasn't sure if Bitcoin (and other cybercurrencies) was a scam, but he _was_ sure that the cryptocurrency world was loaded with scammers. Certainly, the number of busted crypto banks, with all depositor funds lost, should have been a warning.
I'm not sure I would call anything in the crypto world a "security". That word suggests something which has a good chance of yielding a positive return. The argument for "positive return" should be stronger than "Someone else will surely pay more than you did!".
"The regulators failed to do their job" -- well, the mass of originators and investors were begging regulators to stay out! "We don't need no stinkin' regulators -- we have the blockchain ledger to protect us from fraud!"
"The system failed". Yes, but it often does fail to protect naive investors when a new paradigm appears. I don't remember the SEC ever claiming that _any_ crypto investment offered reasonable safety.
I may have just been lucky to stay out of it, or unlucky to have missed the early days of huge profits. I have decades of IT experience, much of it in the financial industry. Cryptocurrency smelled like smoke to me, and I avoid fires.
You already know all this, of course.
. Charles