Sunday, Kids day.

This morning we went to First Presbyterian Church in Joliet, LL's church growing up and her parents' current church. They have a children's minister and they kids leave about 1/4 of the way into the service.  There's a playroom for them after some bible interpretation. Anyway, the kids first go up to the front of the church, sit on the alter steps with the children's minister and he talks to them about a theme for the day.

Today was Thomas' first time walking up front! He went up with Marissa and they were up there with the alter boy and one other young boy. The minister, Bo, started talking about friends. He said Jesus had friends, they were called the disciples. He asked the kids, how many disciples were there? He turned towards Thomas, who promptly responded while extending his fingers as if to count on them, "Probably three or four."  Needless to say, that drew quite a laugh.

After getting the right count on record, Bo proceeded. Do you guys have friends? Who are some of your friends? Instead of responding, Marissa just grabbed Thomas and started hugging him.  There was an audible "Awwww" from the congregation.

Bo went on: one way to get to know and be friends with God is through the bible. Do you have a bible? Thomas jumped in: "No, I don't have a bible." He does by the way. "But we can get one at the store." 

Marissa made a comic book today. Here are the pages:

This is the virus, though I'm pretty sure she initially called it an octopus. Those are gems that the virus is after.

Here, the virus is starting to collect the gems.

And now it has the gems and is happy!

Then, trouble is brewing and lightning strikes (I think). 

And the virus meets "certain death". Though the story has been revised a bit where the virus doesn't actually die. It sort of turns into orange juice and slips away, escaping certain death. 

So it was a pretty eventful day with the kids today!!

A discussion on reincarnation

Well this is certainly an odd topic and not one that I would come by naturally I don’t think. However, the other week I saw a YouTube video, or at least the start of one, from a motivational speaker who was talking about a woman who had been legally dead for some amount of time and was revived. He (or the doctors or someone) asked her if she saw heaven. She said, “How do I know I’m not in heaven now?”

It posed an interesting question to me when you compare our lives to those of so many people from 40 years ago to 4,000 years ago: would our lives not be heaven-like to oh so many people? Even in today’s world, there are certainly those of us who are living lives that others on the planet would think are heavenly. But if they are alive and I’m alive, the reincarnation thing doesn’t work, so I have to go back in time for my subjects.

In the 1950’s, would not someone think it’s heavenly to have the communication, electronics, improved transportation and even microwaves? And that’s not to mention the medicinal improvements. 

If you go back to the 1930’s, it’s all of those things and more! The 1800’s and you mention cars, supermarkets, the availability of clean water, sewage treatment, indoor plumbing, cures for polio and a much lower infant mortality rate; would that not be heavenly? All of that and it would just be my great grandparent’s soul that I possess.

But the 1800’s would also seem heavenly to someone from the 1500’s right? And the 1500’s to someone from the 800’s. And so on. So maybe our souls are reincarnated right here on the earth, with new one’s added periodically to keep up with the population. Or maybe not. Maybe the number of souls has been constant, but many never made it to being born. Heaven to them would have just been given the chance TO live.

Just something I’ve been thinking about.

Crytpocurrencies

If anything other than the year of T-Rump, 2017 was the year of cryptocurrencies. I’ll let you look up what they are and their returns as that’s not the point of this entry. What I do want to discuss is MY experience buying Bitcoin.

Over the last few years I’ve known a few people that have owned Bitcoin and until last year really didn’t know much about any of the other cryptos. Heck, even Bitcoin was a bit of a mystery and at one point last year I even told Lovely Laura that Bitcoin is either the next internet or the next tulip craze. Even now I don’t know which it is, though I’m leaning towards the latter. If I believed that, why buy it? Because you don’t really have to believe in something to make money on it. For years I held Phillip Morris stock, despite not having smoked anything in my life. Those people I knew who owned it though.....they believed in it. REALLY believed in it. Almost blindly believed in it. 

Stocks. That’s a nice segue into my next section: valuation. There are no earnings or dividends or even assets behind Bitcoin. Hell, nobody even really knows who invented it!! In those ways it is dramatically different from a stock, but is not terribly different from a hard asset such as gold, silver, etc. If you buy gold, you don’t get earnings or dividends, you don't know who made it (for sure at least)  and its value (unless you personally make jewelry or computer boards) is dependent solely on demand. Bitcoins valuation is almost solely dependent on demand with its supply relatively fixed. Other cryptos have different levels of supply, some more fixed than others. XRP or Ripple is a crypto that’s owned by one company. They control 60 billion of the 100 billion potential Ripple. Every month they may, or may not, make another billion Ripple available in the market place as they are essentially in a series of CD’s that mature every month. If they are not put into the market, they are put back into the CD with an expiration in the month following the last current CD due date. But Bitcoin’s supply, while not completely in “circulation”, fluctuations are minuscule compared to the float. Demand is what drives Bitcoin.

In the month leading up to Thanksgiving, Bitcoin was making some impressive gains moving from $5k to $7,500, after being under $1,000 in January of 2017.  With those kinds of returns, I could just picture families getting together for Thanksgiving and talking about all sorts of things, but definitely cryptos would come up for those who were invested and probably even for those not. Who doesn’t want to stick it to Uncle Lou for mocking your investment in Bitcoin that was now worth 8 times what you invested (at least)!! Then news that the CBOE would begin trading contracts on Bitcoin starting in mid December fueled even more action in Bitcoin. Personally, I felt the listing on the CBOE would legitimize the asset class and would lead to further upside in Bitcoin.

As the price held and continued to rise even, I decided to open an account with Coinbase, the largest of the e-wallets that sell Bitcoin. You can buy with a credit card or link it to your checking account, though my first purchase was limited to $2,500. After it settled, my weekly transaction amount went up to $5,000.  It's very convenient and slick, so I can see how they became so popular. I was not alone however. 

The weekend of Thanksgiving, Coinbase opened over 100,000 new accounts! Apparently Uncle Lou heard the success stories and was convinced to get in on it. By the time the CBOE started trading futures contracts, Bitcoin was up over $18,000.

Then, demand dried up. But not only did demand falter, that economic boon of being listed on the CBOE came home to roost. You see, for the last eight years or so, you could poo-poo Bitcoin, but you couldn’t bet AGAINST it. There was no financial way to sell it short or bet that the price would drop. Suddenly, not only could you do that, but the PROS could do it. People who manage positions in asset classes everyday could do it. Future cab drivers, who are new to the investing game, could do it (haven’t we all ridden with a cabbie who used to trade on the exchange but lost all their money?).  Though there was a small run up, to about $20K, there was swift downward pressure applied and the value went scurrying below $13k. Having made close to 30% in a day or two, those contracts were covered by purchases or were sold and the value rebounded slightly to the low $14,000’s.  Eventually I sold in the $16,000’s and made about 40% on my investment which was great (paid for Christmas!), but some lessons were learned.

First, you need to know what’s driving the price and value of an asset. Is it earnings, expectations of earnings, dividends, expectations of dividends or just pure speculation? Second, if it’s pure speculation, you have to be ready to bail at any moment and not be tied to selling at a given price to make a profit. If the market turns, it will turn quickly. This is why well known investors (like Buffett) and leaders (like the top financial guy in the UK) said you could lose everything by investing in cryptos. Third, can investors bet against the asset? If you can’t bet against the asset, it’s really just a speculation, demand driven gamble. Those can be just fine, but you need to be able to identify it for what it is (like going to Vegas) and not bet the house (also like going to Vegas).

I’ve been in finance all my adult life and have a finance degree from the University of Illinois and I completely missed how important the last point is. What I thought would be a legitimizing boon for Bitcoin, will ultimately lead to its demise.

While all of this was going on, the government stepped in as well and told Coinbase that they needed to hand over the records for anyone having transactions involving more than $20,000 in a year. That really is another hit to the demand side of the equation as what was a viable way to exchange large sums of funds for potentially illegal or immoral transactions was now severely limited.

What will happen to the crypto currency world and Bitcoin? I have no idea. Am I glad I took my money and ran? Yes, yes I am.