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Blockchain ETF launch
King Lodos
Posted: 18 April 2018 17:01:52(UTC)
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Well that's really why I like Lindsell Train, Fundsmith and select individual shares this year.

I think having an opinion can be a dangerous thing – and markets this year are the definition of uncertainty .. We had an extreme bull case at the beginning, then a reversal that was very contained to the stock market .. But the day there's no looming risk is the day you're likely overpaying ("You pay a high price for a cheery consensus") .. This year I'd rather lose money on good companies than risk it on wild bets.

Bonds *may* be where there's no value – because the bond-buying programs have been completely engineered, yet (wrong) predictions of rising rates for years seem to have kept stock valuations a lot lower than they could be .. I'm holding quite a bit of cash, and there's always as much risk of missing out on stock market returns on pessimism as there is losing capital
Sara G
Posted: 18 April 2018 17:23:57(UTC)
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Kevin Crane;60824 wrote:
I can (and sometimes do) talk myself into investing in nothing... US is over-priced, UK has BREXIT, EM's are volatile, Japan is only just recovering etc etc.

I had a look at IWRD top ten, and it was Apple, Microsoft, Alphabet, Amazon, Facebook. I like the first 4 <g>

Also J&J, JPMorgan, Exxon and BoA.

So, pretty solid companies, and they are only top 10% in value, so there is another 90% lurking in the background. On other hand it suggests IWRD will have quite an overlap with a general tech holding.

I'm certainly not going tactical, other than a quick foray into MicroFocus of course :-)


I've been looking for a global tracker as a core holding in my passive SIPP and have gone for L&G Global 100 Index tracker. As the name suggests, it is the top 100 companies in the world (well, 105) so I'm not too bothered that 60% of them are listed in the US. I also like the fact that it doesn't have upwards of 1500 holdings, although recognise that it won't be a reflection of the total market.

I also went for Micro Focus... took some profits when it went over 1300. It's an interesting ride whatever happens.

I've also gone off topic on my own thread (!) so perhaps the link is that IMHO blockchain may play a role in a lot of the top 100's fortunes in the next 10-20 years. It's interesting that tech seems to lag other sectors, but perhaps that is misleading? In fact all sectors rise in part due to advances in technology, so the gains are distributed (no blockchain pun intended!)...
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King Lodos on 18/04/2018(UTC), Kevin Crane on 18/04/2018(UTC)
King Lodos
Posted: 18 April 2018 18:00:09(UTC)
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Sara G;60833 wrote:
It's interesting that tech seems to lag other sectors, but perhaps that is misleading? In fact all sectors rise in part due to advances in technology, so the gains are distributed (no blockchain pun intended!)...


I think that's a very logical conclusion.

With blockchain (I'm using it as an example of exuberance at the moment – if you'll forgive me), people want to invest in the companies with 'blockchain' in their names .. Exactly the same when it was fibre optic internet companies .. People want to invest in the revolution directly.

But of course, you can have two companies competing to provide broadband – killing each others' margins; overestimating demand – while the company that sells cat litter suddenly has a global market .. And I'm very into machine learning at the moment – I'm investing in that by learning Python, Tensorflow, etc. because otherwise this stuff's all open source .. Amazon's really a consumer discretionary stock, and they might get a lot more value out of AI than Google does
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Kevin Crane on 18/04/2018(UTC), Sara G on 18/04/2018(UTC)
Aminatidi
Posted: 18 April 2018 18:08:35(UTC)
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King Lodos on 18/04/2018(UTC)
King Lodos
Posted: 18 April 2018 18:38:33(UTC)
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This morning, Long Island Iced Tea, a New York-based beverage maker, announced it was changing its name to Long Blockchain Corp. The company’s relation to cryptocurrency is dubious — it says it will “leverage the benefits of blockchain technology” — but it was quickly rewarded with a 200 percent jump in stock price at the opening of trading.

^
A good example to show any hard Efficient Markets advocates.

Exactly the same thing happened in the dot.com bubble – The Simpsons even satirised it:

Compu-Global-Hyper-Mega-Net is Homer's Internet company from the episode "Das Bus". The company's headquarters is the dining room of 742 Evergreen Terrace. It is never made clear what the company sells or offers; however, Microsoft's Bill Gates still "buys out" the company
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Kevin Crane on 18/04/2018(UTC)
Kevin Crane
Posted: 18 April 2018 18:49:36(UTC)
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King Lodos;60840 wrote:
[quote=Sara G;60833]Exactly the same when it was fibre optic internet companies .. People want to invest in the revolution directly.


Heck, that takes me back. Our business was running a change management programme in Marconi when the balloon went up. I recall reading the Times that morning, seeing the shares were suspended, cancelling my meetings and spent the day cutting the grass. I was working directly with them, and I know the top guys were in complete denial. The lesson was, if the people running a FTSE 100 business haven't a clue whether they are doing well or heading for imminent disaster, how the heck an analyst looking at their figures for 15 mins can make a call I don't know. Since then I have (mostly) invested in indexes :-)

Sara - Haven't sold MCRO yet, but know I should :-)
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Sara G on 18/04/2018(UTC), Tim D on 18/04/2018(UTC), King Lodos on 19/04/2018(UTC)
King Lodos
Posted: 19 April 2018 01:54:46(UTC)
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Kevin Crane;60847 wrote:
Heck, that takes me back. Our business was running a change management programme in Marconi when the balloon went up. I recall reading the Times that morning, seeing the shares were suspended, cancelling my meetings and spent the day cutting the grass. I was working directly with them, and I know the top guys were in complete denial. The lesson was, if the people running a FTSE 100 business haven't a clue whether they are doing well or heading for imminent disaster, how the heck an analyst looking at their figures for 15 mins can make a call I don't know. Since then I have (mostly) invested in indexes :-)


Actually personally, I find the madness of crowds and failings of corporate bureaucracy – not to mention the utter insanity of the media – keeps me from putting everything in Vanguard.

I think if you can watch patiently from the sidelines – with a sensible level of risk exposure – there are still regular opportunities for a cool head .. Especially with some sector-specific experience.

I've been going against the grain on blockchain for a while now .. I'm more convinced with each new development that I'm right .. But if I'm not, it doesn't really matter .. You don't have to play every hand .. But the power of groupthink is not to be underestimated .. Of course the problem is everyone thinks they're the rational one
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Kevin Crane on 19/04/2018(UTC)
Kevin Crane
Posted: 19 April 2018 07:12:21(UTC)
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Quote:
Of course the problem is everyone thinks they're the rational one


Including you and me. The difference is I am right 🙂
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King Lodos on 19/04/2018(UTC)
Chris Ould
Posted: 19 April 2018 07:30:13(UTC)
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Bit off-topic, but whilst looking at the recent performance of several ETF's on a Morningstar portfolio watch-list' (principally, in case I wanted to add a cyber security / robotic ETF rather than just top-up ATT), i noticed how well Micawber's recommendation for Timber & Forestry ETF (WOOD) had been doing...it's easy to get caught up in the story and forget about the basic's!
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Sara G on 19/04/2018(UTC), dlp6666 on 19/04/2018(UTC)
Kevin Crane
Posted: 19 April 2018 09:12:17(UTC)
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King Lodos;60861 wrote:
I've been going against the grain on blockchain for a while now .. I'm more convinced with each new development that I'm right ..


I am not as sure as you that it won't come to something. There are some smart people involved and though there is a voice in my head saying smart people have been wrong before, on balance I would come down on there being something in it.

I'm not convinced however by Bitcoin and its blockchain. I think of Bitcoin as a digital token underpinned by a blockchain. The original Satoshi Nakamoto white paper is an intellectual joy to read "Bitcoin: A Peer to Peer Electronic Cash System". Each time you think "ah, nice idea, but it won't work because of Issue X..." the next section of the paper says "So, now to address Issue X. The concept solves this by ..."

But as you highlighted earlier, to avoid fraudulent transactions the concept builds in the need for a lot of computers to do what is essentially wasted work, for which they get paid in Bitcoin. But that work makes it secure as it isn't worth trying to hack. As soon as BTC took on real value (when exchanged for fiat, which is a whole other thing) lots of people bought rigs designed specifically to do the calculations Bitcoin requires (and thus drove up the price of video cards) and lo, they warmed the Earth with their inefficiency. An oft quoted example is that the Bitcoin blockchain processes 7 xactions a second. Visa does 24,000.

Ethereum on the other hand is a blockchain first. You can use it for digital tokens, of which Ether is the obvious example, but you can create your own tokens. Look at https://www.ethereum.org/token to see what I mean. If you like soft tech it is beautiful stuff :-)

Ethereum is more efficient than Bitcoin, but far from fast enough to run transactions in the real world, but they have plans to improve, though at the expense of design purity.

In the meantime along come newer alternatives, such as Stellar Lumens, RailBlocks and EOS,

All in all, I think there is something in it and its evolution will be similar to AI. While we are waiting for drama what actually happens is it seeps into the world's tech infrastructure.

I am not investing in specific companies, but I might be interested in a fund at some point, as I am with cyber, automation, digitalisation etc.
3 users thanked Kevin Crane for this post.
Jim S on 19/04/2018(UTC), King Lodos on 19/04/2018(UTC), Sara G on 19/04/2018(UTC)
King Lodos
Posted: 19 April 2018 13:28:36(UTC)
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I find people find lots of interesting things to say about blockchain, but when it comes to finding practical uses, what does it actually solve? What could I do with blockchain that a business would pay me for? Where is it a real problem to just use a database? How could I use blockchain in my own business to improve margins?

I can find so many things to do with deep learning .. Even finding the perfect carpark layout – anything can be optimised .. I've just automated my little business's social media campaign – it's like having another full-time employee.

But I've always felt Blockchain is the solution to a lot of problems that don't really exist .. Popular modern narratives –like the idea bankers singlehandedly causes economic crises .. I can see uses in crime, terrorism, maybe mercenary work – trading between untrustworthy parties in lawless environments .. But I just can't find those uses in stable environments
Tim D
Posted: 19 April 2018 14:02:46(UTC)
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King Lodos;60895 wrote:
I can see uses in crime, terrorism, maybe mercenary work – trading between untrustworthy parties in lawless environments .. But I just can't find those uses in stable environments


Yup... I'm with KL on blockchain (and AI, which will have way way way more impact).

IMHO humans are actually pretty good at setting up networks of trust and systems for punishing abusers of those networks. It's practically a human superpower... being able to "solve" the prisoners' dilemma in game theory. Given the orders-of-magnitude efficiencies that result from this (look at how many more transactions the visa network can handle) it's hard to see how blockchain-based systems built for a no-trust environment will ever be able to compete with alternative systems built assuming trust and the rule of law. I'm pretty sure any time anyone says blockchain is a solution to some (real-world) problem, there's a much better and cheaper-at-scale solution involving simply doing the same sort of things humans have been doing for millennia.
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King Lodos on 19/04/2018(UTC)
Kevin Crane
Posted: 19 April 2018 14:32:33(UTC)
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KL and TD: I am far from an evangelist for blockchain, I am just not as firmly sceptical as you two seem to be :-)

I am sure part of the attraction is the elegance of concept, it may not find mainstream use, but it is darn clever.
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King Lodos on 19/04/2018(UTC)
Tim D
Posted: 19 April 2018 17:08:38(UTC)
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Timely... arch sceptic David Gerard has just put up his slides from a blockchain conference in London today: https://davidgerard.co.u...ard-berenberg-30min.pdf

The first ~19 slides are just "how it works" but the remainder on "how the initial promises have worked out" and "business blockchain" are pretty good.

Some more info at https://davidgerard.co.u...in-from-hype-to-reality/
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King Lodos on 19/04/2018(UTC), Kevin Crane on 19/04/2018(UTC)
King Lodos
Posted: 19 April 2018 17:39:58(UTC)
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Those are much the same issues I've had .. Even as a libertarian.

It's just a year or two ago, I'd finish those conversations saying "I really must read up on it then," because I assumed they grasped something I didn't.

Now it's becoming apparent it's a tool people are struggling to find a use for – and without the Bitcoin story, why on earth would people be interested in an obscure method for creating secure distributed ledgers? .. The most rational thing I heard, possibly from someone at Visa, was that if it were adopted, it would be obscure, back-office technology – it wouldn't usher in a new utopia
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Tim D on 19/04/2018(UTC), Kevin Crane on 19/04/2018(UTC)
Dennis .
Posted: 20 April 2018 14:05:48(UTC)
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Remember the old adage that if you can't explain it to an 8 year old then don't invest in it.
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King Lodos on 20/04/2018(UTC)
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