The most important thing I can say is that I have no opinion as to whether or not this goes to $20,000 or $200,000 – I believe it could see both and neither. I do not expect it to hold value over time because the value is 100% dependent on others believing it has held value, and confidence games do not end well in my study of history. The arguments I have heard in recent months about a federal government reserve fund of bitcoin is laughably stupid, and primarily being promoted by grifters. The blockchain is a tool, and one I should add is hardly limited to one “crypto currency.” Whenever something becomes “cool” the cult of coolness runs price for a while, until it doesn’t. There is less argument for the efficacy of this as a medium of exchange now than there was two years ago, which is saying something. And furthermore, the leveraged ownership is through the roof (like margin buying, only without a real business involved). So on one hand, I offer no prediction at all about when or what this “derailing” takes place; and on the other hand, I suspect it ends with a lot of people very hurt.
~ David L. Bahnsen, December 2, 2024

Well, I think there are a couple of things I would say in response to this… One is that there are a lot of great investors, and they often have different ways of doing things from one another. Copying (where you are able to) bits and pieces of one great investor and other bits and pieces of another and trying to make it a holistic portfolio of your own doesn’t quite work. I love chocolate, and I love a breakfast omelet, but I do not love a chocolate omelet.

A great value investor like Buffett or Graham does not merely have “stock picks” in their portfolio – they have a methodology, a process, and, oh yeah, time! A great investor like Jim Simons sometimes had positions in his Renaissance fund for 3-5 seconds, not 3-5 decades. Mixing and matching totally divergent, contradictory, incompatible investment processes (and positions!) from various investors leads to an incoherent and sub-optimal portfolio. The secret sauce of great investors is in the totality of what they are doing.’

I also will point out that there is no way possible on earth to know what great investors are actually doing, or when, or why. Yes, you can buy a stock you happen to know they own, but do you know when they sell over half of the position, for example, or only after it has subsequently dropped -25%? Are they going to tell you when they are buying more, selling out, or altering their analysis? And do they have tax ramifications at play that change their situation relative to yours?

Oh, and also, do famous, great investors, get everything right? Don’t make me answer this one!
~ David L. Bahnsen, November 26, 2024

Only timing, but not the decision. If we believe something needs to be sold, we will not refrain from selling (perhaps delay until the next calendar year) due to tax. Our expression is that we want to be tax efficient but “never let the tax tail wag the investment dog.
~ David L. Bahnsen, November 25, 2024

Only timing, but not the decision.  If we believe something needs to be sold, we will not refrain from selling (perhaps delay until the next calendar year) due to tax.  Our expression is that we want to be tax efficient but “never let the tax tail wag the investment dog.
~ David L. Bahnsen, November 25, 2024