Micheal K wrote:
Ha, wow. It halved in value over the course of a month, and then went back up
almost as high as
before. This looks like the type of thing we shouldn't usually sell on a
schedule.
On 08/14/13 12:35, Stefan H.A wrote:
I agree. Given the volatilaty of bitcoin you really need to pay
attention when selling it. Deciding to sell on a certain day regardless
of price is not a good idea.
I disagree. You guys have brought up one of the greatest
unsolved/unsolvable debates in the world of finance/investment theory.
It ultimately comes comes down to belief in the "efficient market
hypothesis" or not
http://en.wikipedia.org/wiki/Efficient-market_hypothesis
That is, do you think you are smarter then the market and can make more
money by actively managing the portfolio (now is not the time to sell,
price is too low / now is the time to sell, price is too high) or do you
accept that you really have no clue at a given time where the price is
going and just go with what the market gives you.
It's totally stepping into the active management / analysis side of
things to look back at historical prices and say "that's an unnatural
temporary low, lets wait for it to return to normal".
For all we know, the last month was a temporary "bull trap" and the
price in early July was much more "natural". After all, $60 is well
above the July 2012 level. A large fall-off in price by Saturday could
just be the start of a greater crash where selling by then could be
still be a good move.
[Consider, with 3600 BTC in supply growth per day (25 BTC mining reward,
6 times an hour, 24 hours) a stable market price of $100 requires the
market capitalization (supply * price) to grow by $360,000 per day! ]
Or, for all we know, even if the last month of price growth continues
into Saturday, selling could still be terribly short sighted with more
rapid growth to come in a very short time frame.
I don't pretend to have any market crystal ball, so I've taken a passive
approach that assumes I'm no smarter then the market at a given moment
in volunteering to help Skullspace sell its mining profits.
Once a person declares their ignorance as to where the price is going
and commits to the passive approach, there's no way to say that
declaring a specific day once a month for sell-off is any better than a
more fine-grained approach such as scheduling once a week or daily -- as
you don't know if that greater time gap is risking growth or loss.
It's always easy to say "it sucked we waited" in retrospect, just as its
easy to say (so far) its been nice we waited the last few weeks in
retrospect. If the market is efficient / or not really predictable
("random walk") then all passive sell-off schedules average out to being
the same.
Passively doing this once a month is less overhead for me and Ian and
less transactional costs for Skullspace than a more fine grained passive
approach of selling regularly on smaller intervals. Does anyone else
want this job who can offer Skullspace less transaction costs while not
speculating on where the market will be going?
Micheal and Stefan, if you want, you can make the case to Ian that the
Bitcoin market is terribly inefficient, volatile and immature and that
you have the time and knowledge to help Skullspace realize greater
profits short term by actively managing the portfolio by making
decisions on when to sell and when to hold.
Ian could put part of the portfolio under your active management and
part of it under my passive management and we can see who does better
with it.
You wouldn't even have to deal with an exchange, I could be available on
any given day where you feel like calling me up on the phone to yell
"SELL SELL SELL!" where I'll immediately offer Skullspace a rate 2% less
than Bitpay.
https://bitpay.com/bitcoin-exchange-rates
And it wouldn't even require you guys to have any control over Ian's
wallet. After getting that call, I would just sell whatever part of my
personal stash on an exchange, put cash or a cheque in an envelope at
Skullspace, and then Ian would send me the same amount of BTC back out
of his wallet whenever the opportunity comes up.
You guys would just stare at charts and pick up the phone.
Alternatively, if one of these sell-off days happens to coincide with
what you consider to be a terrible "market low", you could just come out
and buy the "cheap coins" and make a donation back to Skullspace after
you profit from it.
Mark
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