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<p>[QUOTE="medoraman, post: 7515376, member: 26302"]I would grant you the first cryptos were, then they were shown they could not be that but could be a store of value.</p><p><br /></p><p>"Investment" coins still make me nervous. Sure, possibly a return could be generated, but its very dicey. Tons of people simply do not calculate it correctly. Let's talk about a coin you bought for $10,000 20 years ago.</p><p><br /></p><p>First, you could have very easily bought a coin now out of demand. Remember how hot early commems were a couple of decades ago? Ignoring that or you getting lucky and buying something skyrocketing like Cleo VII and choose a boring coin for $10,000. Let's say you sell it for $25,000 today. Fantastic right?</p><p><br /></p><p>1. You didn't make a return on that $10,000 for 20 years. At a 5% annualized return, (over the period this is fair, I know today its too high), that would be $26,533</p><p>2. You do not GET $25,000 to sell, you have to pay buyer premium. Lets assume a low one, "only" 10%.</p><p>3. You had the risk of loss of this asset for 20 years. Even if you sell insured and did not lose it, this was a real risk. The cheapest insurance I know of is 1% of value, so 1% of original price for 20 years is $2000.</p><p><br /></p><p>So basically your $10,000 great "investment" 20 years ago nets you ($25,000-2000-2500)=$20,500 versus making $26,533 in an investment if you needed to liquidate or pledge against a loan could be done in the matter of seconds. To sell a coin like this for full value takes a couple of months minimum.</p><p><br /></p><p>Coin and bullion collectors never fully appreciate and take into account the time value of their money or liquidity factors. They wax poetic about how great the "good old days" of 30 years ago were, not calculating the TVM effects on those decisions.[/QUOTE]</p><p><br /></p>
[QUOTE="medoraman, post: 7515376, member: 26302"]I would grant you the first cryptos were, then they were shown they could not be that but could be a store of value. "Investment" coins still make me nervous. Sure, possibly a return could be generated, but its very dicey. Tons of people simply do not calculate it correctly. Let's talk about a coin you bought for $10,000 20 years ago. First, you could have very easily bought a coin now out of demand. Remember how hot early commems were a couple of decades ago? Ignoring that or you getting lucky and buying something skyrocketing like Cleo VII and choose a boring coin for $10,000. Let's say you sell it for $25,000 today. Fantastic right? 1. You didn't make a return on that $10,000 for 20 years. At a 5% annualized return, (over the period this is fair, I know today its too high), that would be $26,533 2. You do not GET $25,000 to sell, you have to pay buyer premium. Lets assume a low one, "only" 10%. 3. You had the risk of loss of this asset for 20 years. Even if you sell insured and did not lose it, this was a real risk. The cheapest insurance I know of is 1% of value, so 1% of original price for 20 years is $2000. So basically your $10,000 great "investment" 20 years ago nets you ($25,000-2000-2500)=$20,500 versus making $26,533 in an investment if you needed to liquidate or pledge against a loan could be done in the matter of seconds. To sell a coin like this for full value takes a couple of months minimum. Coin and bullion collectors never fully appreciate and take into account the time value of their money or liquidity factors. They wax poetic about how great the "good old days" of 30 years ago were, not calculating the TVM effects on those decisions.[/QUOTE]
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