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Why Your Investment is Sh!t: Navigating the Quirky World of Modern Investing | Real Estate and Stocks Vs Bitcoin

💛 Best Investments During Stagflation ✨

REAL ESTATE NEWS (Los Angeles, CA) — In the ever-evolving landscape of investment, the term “smart money” might seem like a misnomer. From Wall Street to Main Street, investors are scratching their heads, wondering where the next gold mine lies. Amidst this confusion, Raoul Pal, a wealthy hedge fund investor, made a bold statement: All investments are “dumb” compared to Bitcoin. Let’s unpack this.

Bitcoin: The Digital Gold Rush

Pal’s stance on Bitcoin is nothing short of revolutionary. In his view, traditional investments like stocks, bonds, and real estate pale in comparison to the digital currency. This sentiment resonates with many, especially considering Bitcoin’s meteoric rise. But is it really the financial panacea Pal makes it out to be?

Traditional Investments: Not So Golden Anymore?

Take, for example, the curious case of Downtown Los Angeles (DTLA) lofts. While most loft condos have doubled or tripled, some of these properties, once the epitome of urban chic, have stagnated in value since 2009. This stagnation is a stark reminder that traditional investment vehicles are not infallible. But does this mean they’re “dumb”? Well, 2023 certainly has been plagued by higher interest rates, a bit of tarnishing for some housing markets and reports of impending malaise.

The Risk and Reward Balancing Act

While Bitcoin offers the allure of high returns, it’s a rollercoaster ride of volatility. Traditional investments, on the other hand, offer stability and predictability. It’s a classic case of risk versus reward. Bitcoin investments more than doubled in 2023. Bitcoin has gone up more than 5 million percent in the last 14 years. Bitcoin has always made gains when looking at three year periods. After studying Bitcoin’s short-term, medium and long term gains, many can now clearly see Bitcoin as the proven safe haven, while viewing all other investments as more risky.

Diversification: The Key to Smart Investing?

Perhaps the real wisdom lies in diversification. A portfolio that balances the excitement of Bitcoin with the steadiness of traditional assets might be the smartest play of all! Raoul Pal sees this a a given, already proven — yet still early enough to see a lion’s share of gains. Raoul is now informing the early birds about their next big, juicy worm, A.I. Artificial Intelligence.

Comparison

  • Return on Investment (ROI): Bitcoin has provided astronomical returns for those who invested early and held onto their assets. However, these returns are not guaranteed to continue and come with high risk. In contrast, real estate has offered more stable, albeit generally lower, returns over the same period.
  • Risk Profile: Real estate is typically considered a lower-risk investment compared to Bitcoin. The extreme volatility of Bitcoin makes it a high-risk investment.
  • Liquidity: Bitcoin is more liquid than real estate. You can buy and sell Bitcoin quickly, whereas selling real estate can take months.
  • Market Accessibility: Bitcoin is more accessible to the average person due to its lower entry cost compared to real estate, especially in high-value markets.
  • Impact of Economic Cycles: Real estate is more directly tied to local and global economic conditions, whereas Bitcoin often behaves independently of traditional economic cycles.

While Bitcoin has offered potentially higher returns since 2010, it comes with a much higher risk and volatility compared to real estate, according to the mainstream media. Real estate investments have provided among the best stable growth and the additional benefit of rental income over the last 100 years, although the returns are generally lower than those seen with many Bitcoin investments. The choice between the two depends on an individual’s risk tolerance, investment goals, and market knowledge. While Bitcoin is clearly the king of all investments since 2010, you still cannot live in a Bitcoin. For most people, BTC must be converted into cash, real estate or something else popularly tangible in order to gain a sense of real-world currency.

How Bitcoin became King of All Investments

The rise of Bitcoin as a prominent investment vehicle can be attributed to several factors, particularly in contrast to traditional fiat currencies like the U.S. Dollar. Here’s a breakdown of how Bitcoin has gained this status:

1. Decentralization and Limited Supply

  • Bitcoin’s Limited Supply: Bitcoin is designed with a capped supply of 21 million coins. This scarcity is built into its protocol, mimicking the scarcity of precious metals like gold. In contrast, fiat currencies can be printed in unlimited quantities by governments, leading to potential inflation.
  • Decentralization: Bitcoin operates on a decentralized network, meaning it’s not controlled by any single entity or government. This decentralization is appealing to those who distrust centralized financial systems and government control over money.

2. Inflation and the Devaluation of Fiat Currencies

  • Historical Devaluation of the U.S. Dollar: Since its inception in 1792, the U.S. Dollar has lost a significant amount of its purchasing power. This is mainly due to inflation and changes in monetary policy. The claim that a dollar today is only worth about 3% of its 1792 value highlights the impact of long-term inflation.
  • Bitcoin as a Hedge Against Inflation: Many investors view Bitcoin as a hedge against inflation. Its pre-programmed rising value (through events like ‘halving’) and limited supply contrast sharply with the inflationary nature of traditional currencies.

3. Technological Innovation and Digital Transformation

  • Blockchain Technology: Bitcoin’s underlying technology, blockchain, is seen as revolutionary, providing security, transparency, and efficiency. This technological edge makes it a compelling investment compared to traditional assets.
  • Digital Era and Internet of Money: In an increasingly digital world, Bitcoin represents a shift towards digital assets, fitting well into the narrative of the ‘Internet of Money’.
  • NFT: From McDonalds to Nike to the NBA, crypto blockchain NFT Non-Fungible Tokens are turning into mainstream investments — another exciting, new and proven tech investment. Entar® is in final development stages, with recent limited beta release of the Entar® Real Estate NFT.

4. Market Sentiment and Speculation

  • Speculative Investment: A significant part of Bitcoin’s value is driven by investor speculation. As more people buy into Bitcoin, expecting its value to rise, this demand can drive up prices.
  • Media and Public Perception: Media coverage and public perception play a crucial role in Bitcoin’s popularity. As more people become aware of and understand Bitcoin, its adoption and investment appeal increase.

👑 All Hail the King 🏆

While ₿itcoin has been hailed by many as the “king of all investments,” it’s important to note that this comes with high volatility and risk. Its value can be extremely unpredictable, and while some have seen significant returns, others have faced losses because they bought high, then sold low, or were duped by bad exchanges or fraudsters. The comparison to the U.S. Dollar’s historical devaluation provides a stark contrast between traditional and digital currencies, highlighting Bitcoin’s appeal in a modern financial context. However, like any investment, it’s essential to approach Bitcoin with a balanced understanding of its risks and rewards.

Compare that to a Bitcoin, which was worth less than one cent 14 years ago, and is worth more than $37,000 today. Comparing the historical value of the U.S. Dollar and Bitcoin offers a striking illustration of the changing landscape of value and investment over time.

U.S. Dollar Since 1792

  • Long-Term Devaluation: The value of the U.S. Dollar has steadily decreased since its inception in 1792, primarily due to inflation. Over the centuries, the purchasing power of the dollar has significantly eroded. This gradual devaluation reflects the impact of various economic policies, including the departure from the gold standard and the Federal Reserve’s monetary policy.
  • Current Value: As of now, the purchasing power of the dollar is only a fraction of what it was in 1792. This decline has been a slow, steady process influenced by economic growth, inflation, and changes in fiscal policy.

Bitcoin Since 2009

  • Rapid Appreciation: Bitcoin, created in 2009, was initially worth less than one cent. Over the past 14 years, its value has experienced dramatic fluctuations, reaching peaks that have made it one of the most lucrative investments for some early adopters.
  • Current Value: As of now, Bitcoin’s value is more than $37,000, a remarkable increase from its initial worth. This increase is partly due to its capped supply (only 21 million Bitcoins will ever exist), growing acceptance, and increasing interest from both retail and institutional investors.

Comparison

  • Growth Rate: The growth rate of Bitcoin is unprecedented in the history of modern investments, especially when compared to the slow and steady devaluation of the U.S. Dollar.
  • Nature of Value: The U.S. Dollar’s value is backed by the government and is influenced by economic policies and global trust in the U.S. economy. Bitcoin’s value, on the other hand, is driven by market demand, scarcity, and its perceived utility as a digital asset and store of value.
  • Volatility: Bitcoin is known for its high volatility, with rapid price changes. In contrast, the value of the U.S. Dollar, while declining in the long term, does so in a relatively stable and predictable manner.
  • Risk and Return: Bitcoin represents a high-risk, high-return investment, suitable for investors who can tolerate significant price swings. The U.S. Dollar, while stable, does not offer the same potential for rapid appreciation in value.

Compare

The comparison between the U.S. Dollar and Bitcoin showcases the evolution of what constitutes value and investment. While the U.S. Dollar has been a symbol of stability but slow devaluation, Bitcoin has emerged as a volatile yet potentially high-return digital asset. This contrast highlights the diversification in investment strategies and preferences in the 21st century.

Smart or Dumb?

So, is your investment “dumb”? Not necessarily. It all depends on your risk appetite, investment goals, and the ever-changing market dynamics. Whether it’s Bitcoin or DTLA lofts, the investment world is filled with opportunities and pitfalls. The key is to navigate it with a balanced, informed perspective.

Remember, the world of investment is as unpredictable as it is exciting. Whether you’re chasing digital dragons or betting on brick-and-mortar, the journey is as important as the destination. Stay savvy, investors!

What investments are going best right now while economic stagnation persists and consumer price inflation remains high? Some real estate transactions have completed flawlessly this year. We’ve seen one of our $1+ million home buyers get handily outbid even though he offered $50,000 above asking price on a San Pedro beach home. The rare, desirable properties are still flying off the shelves in today’s real estate market.

Get a free list of the best investments during time of stagflation. Fill out the online form:

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Copyright © This free information provided courtesy L.A. Loft Blog with information provided by Corey Chambers, Broker DRE 01889449. We are not associated with the seller, homeowner’s association or developer. For more information, contact 213-880-9910 or visit LALoftBlog.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Text and photos created or modified by artificial intelligence. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.

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Stop Guessing, Start Growing: When to Pivot and When to Persevere in Your Business for Maximum Profits

ASK COREY

Q: I’m not sure if I should continue going the present course or change it, based on mediocre financial results. How should I make the decision of whether to continue or change direction?

A: With rising interest rates and volatile markets, many real estate agents and other professionals must today make tough decisions on whether to down-size, stay the course or expand to take over increasing market share. The decision to continue on the present course or change direction in a business is complex and multi-faceted. For a mediocre business or a struggling project, it can often be extremely challenging to determine when to call it quits, make a big change or stay the course. Here are some strategies and considerations for a business owner facing such a dilemma:

Self-Assessment
Clear Objectives: Have a clear understanding of your business goals. Are you focused on quick profits, long-term growth, or something else? The path to take may differ based on these objectives.
Time Frame: How long have you been experiencing mediocre financial results? If it’s a short-term phenomenon, the situation might resolve itself. Long-term issues, however, may indicate deeper problems.

Data Analysis
Financial Metrics: Delve into your income statements, balance sheets, and cash flow statements. Identify any trends or anomalies that could be impacting your financial results.
Market Trends: Is your market growing, stagnant, or shrinking? A growing market may offer more opportunities for course correction.
Competitive Analysis: How are similar businesses faring? Are they experiencing the same struggles, or are they thriving? Understanding the competitive landscape can provide insights into whether the issues are specific to your business or are industry-wide.
Customer Feedback: Seek honest feedback from your customers to understand their needs and pain points better. This can inform your decision to pivot or persevere.

Consultation
Advisory Board or Mentors: Discuss your situation with trusted advisors or mentors who understand your industry. They can provide invaluable external perspectives.
Employee Input: Those who are on the front lines are often the first to see problems and may have insightful solutions. Don’t underestimate the value of internal feedback.

Strategy Formulation
SWOT Analysis: Conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) to help you evaluate your strategic position.
Pivot vs. Persevere: With all the data and feedback, you’re in a better position to decide whether a change is needed. If you decide to pivot, make sure you have the resources (financial, human, etc.) to support the new direction. If you choose to persevere, consider minor adjustments that could lead to improved results.

Risk Assessment
What-If Analysis: Evaluate the best-case, worst-case, and most likely scenarios for both staying the course and changing direction.
Resource Allocation: Ensure you have the resources to support your decision. Changing course often requires an upfront investment in terms of time, money, and effort.
Exit Strategy: Always have an exit strategy in place in case things don’t go as planned. This could be selling the business, winding it down, or another course of action that minimizes losses.
Action Plan
Once you’ve made your decision, create a detailed action plan outlining steps, responsibilities, timelines, and milestones.

Corey Chambers, Broker inspects a large raw loft in Downtown Los Angeles
Corey Chambers, Broker

Periodic Review
Continuously monitor performance metrics to ensure that the business is moving in the direction you intended. Be prepared to make further adjustments as needed.

For the question of whether to pivot or persevere, the best answer is necessarily subjective, based on one’s personal goals or business objectives. By taking a systematic approach to evaluate your situation, you’ll be better equipped to make a satisfying decision on whether to continue on your present course or make a strategic pivot.

Q: For the time-frame of a situation to resolve itself, what number of months or years would normally be considered short-term or long-term.

A: The definition of “short-term” and “long-term” can vary depending on the industry, market conditions, and the specific business in question. However, here are some general guidelines:

Short-Term
In the context of business performance, “short-term” usually refers to a period of up to one year. During this time frame, businesses may encounter temporary challenges such as seasonal fluctuations, temporary increases in costs (e.g., due to supply chain issues), or short-term declines in customer demand (e.g., due to economic cycles).

Long-Term
“Long-term” generally refers to a period extending beyond one year. If mediocre financial results persist for more than a year, especially if they extend into a two- or three-year period, this could indicate more systemic issues that may require significant changes in strategy, operations, or even the business model itself.

Considerations
Industry Norms: In fast-paced industries like technology, even a few months of mediocre performance could be considered significant. In more stable, traditional industries, businesses may look at multi-year trends to judge performance.
Business Life Cycle: For start-ups or new ventures, “short-term” may be a matter of months, as they may need to show traction quickly to secure additional funding. Established businesses with more resources may have the luxury of a longer time frame for assessment.
External Factors: Sometimes external events can temporarily impact business performance, such as natural disasters, regulatory changes, or economic downturns. It’s crucial to distinguish between impacts from external events and those caused by issues internal to the business.
Investor and Stakeholder Expectations: If the business has external investors, their expectations for performance metrics and time frames for improvement can influence what is considered short-term or long-term.
Financial Resilience: The business’s financial health will determine how long it can sustain mediocre results. Poor cash reserves or high debt levels can make even a short-term dip in performance critical.

The definition of “short-term” and “long-term” should be tailored to the specific circumstances of the business, including industry norms, business life cycle, external influences, and financial condition.

Navigating the precarious waters of a mediocre or struggling business requires a blend of self-awareness, analytical rigor, and adaptive strategy. Corey Chambers’ comprehensive outline encapsulates the necessity of approaching this critical decision from multiple vantage points. Whether it’s understanding your business objectives or diving deep into financial metrics, each step aims to strip away the fog of uncertainty, giving you a more transparent landscape on which to chart your course.

The tools suggested, from SWOT analysis to What-If scenarios, serve not just as diagnostic instruments but as guiding lights that illuminate your path—be it persevering on the current trajectory or pivoting to uncharted territories. Equally important is the counsel of others—advisory boards, mentors, and even your own employees can offer insights that you might have overlooked. Inclusion of such external and internal perspectives adds layers of scrutiny and wisdom to your decision-making process.

Moreover, it’s essential to remember that the decision you make isn’t set in stone. Your periodic review mechanism ensures you remain nimble, ready to make further adjustments as needed. This allows you to respond not just to internal changes within your business, but also to external shifts in the market or competitive landscape.

At the end of the day, the decision to pivot or persevere is not merely an end but a strategic continuum. It’s a dynamic process that is shaped by your goals, informed by data, bolstered by consultation, and refined by ongoing assessment. By embracing a methodical approach as outlined, you’re not just making a choice; you’re making an informed choice. This is where the subjectivity of personal and business objectives meets the objectivity of hard data and external advice, culminating in a decision that is not only sound but also satisfying.

How can we help you? Request more information on Downtown Los Angeles, lofts, real estate or business. Fill out the online form:

LOFT & CONDO LISTINGS DOWNTOWN LA [MAP]

  Lofts For Sale     Map Homes For Sale Los Angeles

SEARCH LOFTS FOR SALE Affordable | Popular | Luxury
Browse by   Building   |   Neighborhood   |   Size   |   Bedrooms   |   Pets   |   Parking

Copyright © This free information provided courtesy L.A. Loft Blog with information provided by Corey Chambers, Broker DRE 01889449. We are not associated with the seller, homeowner’s association or developer. For more information, contact 213-880-9910 or visit LALoftBlog.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Text and photos created or modified by artificial intelligence. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.