Wall Street Journal says crypto may be too popular to die. Bull!

The “Numbers” column in the Saturday WSJ says basically that 30 million people, mostly young men, have dabbled in crypto and that five to six million bet their life savings on crypto and that this popularity means all the bankruptcies and lawsuits may not mean crypto is heading for oblivion.

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Bull! 42% of Americans smoked in 1964. That was about 50 million, mostly men as with crypto. It is now around 12%. Conclusion? Things that are stupid being popular does not mean they are immune to the predictably resulting bankruptcies, prosecutions, regulations, and death rates.

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There was a book titled Real Men Don’t Eat Quiche in 1982. The vast majority of men are insecure about their manhood. Not only do “real men” smoke and buy crypto, they also drive pick-up trucks even though they have nothing to pick up, drive noisy vehicles, get tattoos, wear camo, own ARs, and drink “bloke Coke”—Coke Zero—rather than Diet Coke (almost identical product like Virginia Slims and Marlboro Man cigarettes) which is “for females.” This is all dopey nonsense—and popular with men.

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The onslaught against smoking came in the forms of millions getting sick and dying, the Surgeon General’s report, lawsuits, regulations, and laws. The onslaught against crypto is very similar: millions losing their life savings, numerous financial people like Warren Buffett denouncing crypto, crypto being used to commit crimes, lawsuits by SEC and CFTC and so on, banking regulations, laws.

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All this discussion of popularity with males is beside the point. Shame on the Journal for engaging in it. What the Journal should be doing, and has in many other articles, is analyzing the fundamentals, and denouncing crypto because there ARE no fundamentals. Crypto has about as much virtue as smoking was purported to have in the early 20th century.

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Tobacco use should have been denounced earlier and more loudly by the authorities. Same applies to crypto. The widespread use of crypto is about as much evidence of value as the widespread falling prey to covid 19 in 2020. An epidemic of stupidity does not validate the habit in question.

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The Journal should be pointing out as the little boy in the Hans Christian Anderson fable the Emperor’s New Clothes did: crypto has no “clothes,” indeed no nothing.

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One recent Superbowl carried a number of ads that essentially said “Real men buy crypto.” Matt Damon and others said, “Fortune favors the bold” and implied that buying crypto is a great example of boldness.

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The statement that fortune favors the bold is utter rubbish. Even the definition of fortune is luck. Another mindless slogan is “if you err, err in favor of X.” That is bad advice. The truth is the best advice is don’t err.

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I recently wrote here that most females were lacking a athletic focus compared to males in my experience. There are many instances where males are screwed up by their different DNA from females. All these destructive behaviors to prove their manhood—including buying crypto—are classic examples of where men need to change.

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My blood was chilled by these words in the next-to-last sentence in the column: “five million to six million have effectively bet their life savings” [on crypto].

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Diversification and buying the things you will need in advance are among the most fundamental requirements of managing your life savings. Furthermore, crypto is not even diversification. Your percent in crypto should be zero. Diversification means uncorrelated assets.

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Investopedia says,

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“The concept of diversification in investing refers to owning a wide variety of securities across several asset classes to defray risk. Historically stocks and bonds are used as examples of two uncorrelated asset classes.”

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I despise that second sentence. Investment is NOT limited to things that have to be sold by licensed securities brokers. Indeed, such a narrow limitation is ANTI-diversification. You should own no bonds because they are destroyed by inflation and, other than US Treasurys, are callable meaning they have little upside and much down side. You should have a home which is neither a stock nor a bond but is one of the best investments in the world since WW II.

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I also own coins, equipment, inventory, foreign currency, long-shelf-life food, paper and other household consumables.

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Crypto is not an uncorrelated asset because it has no fundamental that would predict its behavior in any changed set of circumstances. For example, we know that bonds fall in reaction to inflation and assets not denominated in dollars go up in dollar value in inflation. Crypto behaves in random ways. When you place money on random assets, you are mindlessly gambling. Do NOT do that with your life savings.