It may
surprise some observers to learn that a number of QVM Market Traders also
engage in global financial markets particularly through the ASX. We thought it might be useful to look at the latest buzzword - crypto currencies.
There are
some legends amongst our ranks who have been very successful in trading shares
over the years including the matriarch of one family business and one trader
who came to the market straight from high school. It may just be in my circle
of market neighbours but no Saturday discussion is complete without exchanging
tips on the latest ASX market moves.
The
connection between trading goods and trading shares is not so distant. Both
involve ways of making money, both include an element of gambling, and both
need astute judgement. Market trading (QVM style) involves fluctuating levels
of cash as we work through seasons and buying cycles. When you have waiting
cash you like it to earn well and there are more profitable ways than storing
it in a standard bank account. There is another element right now and that is
that retailing is going through difficult times. Looking for other ways to earn
income has become a necessity.
Share
trading can be profitable, but has its risks, and as we have already identified
that is part of the buzz. Crypto currencies are a whole new thing in financial
markets. They are described as digital currencies, alternative currencies, or
virtual currencies, and Bitcoin is probably the best known. Bitcoin is described as a way of conducting transactions without a central bank. Transactions take place between users directly with a register called a blockchain keeping track of things. The wikipedia entry for bitcoin includes the warning that the description may be too technical for most readers to understand.
Right at
the moment, Saturday discussions under the sheds usually include the question –“What
do you think of investing in Crypto currencies?” My stock answer is I don’t
understand how it works so I don’t trade in them. Understanding exactly how
crypto currencies operate is quite challenging so when financial guru, Michael
Pascoe, wrote an article in the Sydney Morning Herald this week I took notice.
He describes crypto currencies in layman’s terms and includes some useful
analogies. Here is the link - http://www.smh.com.au/business/markets/why-you-can-t-call-bitcoin-a-cryptocurrency-20171229-p4yy47.html
Spoiler
alert – the article includes the line – “They represent a pure mania – the price rising in the belief that other
people will continue to bet on the price continuing to rise.”
More reading - http://www.abc.net.au/news/2013-12-02/bitcoins-the-digital-currency-explained/5119034
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