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Friday File: Bitcoin, Volatile Week, Two Sells and a Buy

Adding a new position to the real money portfolio, plus notes on bitcoin, Lexagene, Blackbird, Trek, PCSB Financial, Coresite, Maverix Metals, Naspers and more...

By Travis Johnson, Stock Gumshoe, December 1, 2017

How about that bitcoin, eh? Those of you who’ve been following my personal portfolio and reading these Friday Files closely know that I sold pretty much all of my cryptocurrencies back in September, when it got to be a large enough position that I found the cash more valuable. Lots of you think I’m crazy for that, judging by the mail I receive, and that could be true — I don’t know. But I continue to get lots of questions about bitcoin and the various alt-currency pitches that are floating around, so I thought I’d start with a few words on that…

For me, the reason for selling at that time was a growing expectation that governments would tamp down on the mania at some point… especially the Chinese government… but really, it came down to a simple assessment: I can’t make a rational argument about Bitcoin’s price that distinguishes between the value at $100 and the value at $1,000 or $10,000. There’s nothing “there” there to tie it to any number, and a unit of bitcoin doesn’t mean anything or convey ownership of anything, and there’s no promise that you can do something specific with it in the future.

Bitcoin is the purest representation of trading sentiment that I’ve ever seen in action, trading fully separated from anything real. And it’s nominally a currency and a store of value… but it trades like a speculative and rapidly growing enterprise. The logic just doesn’t make sense, so I’m mostly out (I do have a tiny position in bitcoin still, more of a rounding error than anything).

And I don’t hate bitcoin, and I don’t think it’s a fad. That decision that I can’t own a meaningful position in bitcoin or the other cryptocurrencies came (and remains) despite my personal belief that blockchain is the most disruptive technology since the mobile internet, and could bring radical change to banking, investing, and almost any transactional part of the economy. If someone owned blockchain or a patent on critical parts of the technology, I’d buy stock in them in a heartbeat — but the actual technology is open source, and holders of cryptocurrencies don’t “own” the companies that create and issue those cryptocurrencies any more than Tim Berners-Lee owned html. That’s what keeps me nervous about what will happen next.

Perhaps I’m also nervous because I see so much of the ...

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