投资笔记与评论

June 2019,  Opinion post on Treeter with "#bitcoin" >>

Although #bitcoin has some great tech innovations, experts said “95 Percent of Bitcoin Trade Volume is Fake.” How can it be done? The simplest is wash trade: buy & sell at same price same time. Why do so? He losses nothing, while can set an increased price to let the chart show both price & vol up so lure others. What’s matter? It’s a scam. He fakes the price up, so lure more & more people jump in. Then he takes or steels money out; since the high price was faked up, it collapses right as the money out.

#bitcoin trading is not a bubble, it’s a huge scam.  That can be observed from its extreme price asymmetry and volatility. It shows that #bitcoin trading = Ponzi scam x Pyramid scam. It’s price ups gradually when someone push up the price, and it downs like a cliff when they cash out.

People are excited on the #bitcoin price chart; see its up year after year and no any other assets in the universe can do. If you know 95% of such trading are fake, you will know that the price chart is just an illusion. To get the real, just ask anyone who “invested” in #bitcoin: as its price up year over year, has your gains support your daily living or special needs in anyway?

It’s scammer’s dilemma. In order not to be noticed, he needs to slowly fake the price up, however there’ll be little interest in it. In order to steal a good amount of money, he need ignite the fire so more people jump in, however when he took some money out the price collapses.

 

Someone says there’s only 21 million bitcoins, no matter how it is divided it’s still that many. Like a pizza to cut 6 slices or 8 slices doesn’t matter. Agree with that if the price keeps proportional when divide. However, bitcoin is not trading this way...  The guy owns a whole pizza, split 1/1000 of it, and sell the piece with price raised by 1/10; the buyer don’t feel much, however the seller is gaining 10% at his book... Remember however the gains is only on his book. There’s no way to cash out the whole gains...

It needs more and more people involved so can cash out little by little... The divide-infinity keeps the bitcoin trading going on and on, so it seems have plenty of liquidity.  However, not much of out-liquidity. Any meaningful sum of cash out will trigger the price down dramatically...

So long as everyone keeps in the game or the exiting owners keep advertising to lure more people in, the game can keep playing; but not when people want to cash out the gains to use it in real economy.

The trick is liquidity.

 

May 2019， Notes at CFANY meeting “Active Quant vs Smart Beta Quant”

=〉reasonal economic reasons + human behavior based >> should still work

=〉signal research + portfolio construction >> would do better

=〉factor + timing + transaction cost >> ??  factor itself has momentem ??

=〉big data/unstructure data/ML based have not passed the hurdles (noise-singal, biased, turn-over, cost, etc.) yet into primary time

=〉ESG (Environmental, Social, and Governance) does not geneate enough singal, can be treated as a mondate (by client) not a strategy, and think long-term

=〉new ideas: "syntax investments" uses economic/business activities-risks based data, e.g. supply chain risks, etc., adding into stratege (Functional Information System, FIS, Sequencing Business DNA) >> the panels don't believe its advantages, or included in other factors, e.g. momentem

=〉bottom line:  what is the client want to achieve? and what is acceptable fees/tax?