Ask the Sketch Guy: Should I Finally Buy Some Bitcoin?

By June 5, 2017Bitcoin Business
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Last week, I announced the beginning of a semiregular “Ask the Sketch Guy” service. Send me your questions, but not just any questions. I want to explore the deep, dark conversations that we don’t hear on the financial pornography network, like how we feel about money and how money makes us feel.

To kick off things, Shawn Cook from San Diego asked a question about Bitcoin. (For an explainer on Bitcoin, see this article by Nathaniel Popper of The New York Times, who literally wrote the book on the topic.) His hipster friend is constantly bugging him to invest in the cryptocurrency. It’s making Shawn wonder: Should he ditch his boring old index fund?

Shawn, this is a great question because who among us doesn’t have a hipster friend who is always talking about how he is killing it with his investments in Bitcoin, Apple and Tesla? Those people have all the fun! They seem to know exactly what’s going to happen in whatever market they’re investing in and have this aura of self-assurance that is really annoying. It’s enough to cause even the most rational, non-hip among us to doubt our boring, old-style investing.

In fact, I remember feeling a bit this way back in 1999. I was surrounded by tech people with their BlackBerries and Hotmail accounts. I resisted the siren call of the Nasdaq and the technology bubble — until I finally gave in. Then, I took some hard-earned money out of a boring diversified investment and bought Infospace.

Remember that? If you do, it may not be pleasant. In fact, I can’t remember the exact details because they’re too painful, but I know I invested a lot of money (for me) back then. When I sold, I didn’t have enough to pay for a burrito and a Coke. I even considered buying more on “the dip.” Except I didn’t have any more money to invest, and this wasn’t a dip. The stock never recovered to anything close to what I had paid to buy it. Today, I still have the stock certificate as a reminder of that valuable lesson.

So, Shawn, the moral of the story is that your friend just might be right. But then again, he might be flat-out wrong.

What he is talking about is speculation at best, and it’s probably closer to gambling. If you have some spare money and you feel like gambling, fire away.

But here’s an alternative idea. Keep your low-cost, boring, diversified investments, and have a T-shirt made (black, with white text) that says: “I own Bitcoin. How you like me now?” I’ll even provide the sketch.

Keep the questions coming via your voice messages!

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