Avoiding Charlatans, Miscreants, and Wackadoodles

It's possible to invest in this space and not lose your sanity

I get newsletters sent to me all the time. They’re valuable to me — even the free ones — because they give me a sense of what is driving market discussions in and out of crypto.

For instance, I just got one (publisher to remain nameless) that talked about the market for gold and silver in 2022. This is great, because now I know that the gold-to-silver ratio is going to drive some people’s investments this year. But it’s also not at all helpful because the gold-to-silver ratio doesn’t tell us anything other than the fact that gold is trading at a multiple of silver and that that multiple goes up and down over time.

Are You Sure, Sparky?

Forgive me the digression here but I’m reminded of (of all things) the “gender pay gap” discussion between the inimitable intellectual Jordan Peterson and BBC journalist Cathy Newman (who proved herself in this particular discussion to be imitable but not quite intellectual).

Ms Newman was claiming that there was a gender pay gap. Mr Peterson was saying the gap wasn’t just due to gender. The pair went back and forth and, thankfully, the phrase “let’s agree to disagree” was never brought up.

Nineteen (19!!!) factors should be used in comparing salary and wage gaps. Not just one, or two, but 19.

You can watch the part of the discussion endemic to my argument here:

Of specific note, Peterson says “If you’re a social scientist worth your salt you never do a univariate analysis.”

The newsletter I read today is telling you, in brief, “we’ve looked at one comparison — the price of gold to the price of silver — and silver is ridiculously undervalued.”

Ignore all the other reasons for the price of silver (including its industrial use, its portability, its supply and demand, inflation rates, and the like) and compare it to gold and…wow, Katie bar the door!

The charlatan whose above-referenced newsletter misleads its readers with its simplicity is doing that for a reason: to get you, the reader, hooked in. You want more information, so they’ve got to dumb it down to the lowest common denominators (in this case: TWO) and hope that you subscribe to premium services to learn more. It’s a business model decision and I get that.

Which Brings Us Back to Crypto

Other miscreants — again, they’ll remain nameless — will try to sell you on “Backdoor Crypto Tricks” OR “How to Buy NFTs Without Buying NFTs” OR “Biden to End 401(k)s So Buy This Digital Coin to Stop Him!” These *can* be substitutes for doing the research yourself (a process known in crypto as “Do Your Own Research”), but the surest way to win in this world of crypto seems to be actually putting in the hard work.

Idea 1: “Backdoor Crypto Tricks!”

Perhaps Mr Miscreant was being sincere. But I don’t think so, as there isn’t actually a backdoor crypto trick that involves (as I think he’s saying in his video promoting his service; don’t totally know as I jumped out after the first 15 seconds) buying at a pre-ICO price after the coin has ICOed.

The only backdoor crypto trick that seems to work is this one:

Use a platform that might give you free tokens. Then, when (if) you get those tokens, sell them for profit.

I’ve seen this happen before with great success — $ENS and $UNI come to mind — and I’ve also seen this happen with tiny success: I might have gotten a few hundred bucks from something called “Mirror Token.”

The only way to be in the game, it seems, is to get in the game.

Idea 2: Owning NFTs Without Owning NFTs

This is easy and you don’t need to subscribe to a paid newsletter to find this out: invest in any crypto platform that is in the NFT game.

And it’s also not easy because you need to guess which one is the right crypto platform that is in the NFT game.

Is it $CRO because Crypto.com is doing their own NFT thing? Is it $MAGIC or $JEWEL because they’re both actual NFT purveyors/creators?

Don’t know. But, again, get in the game.

Idea 3: Biden Killing 401(k)s?

This is more far-fetched than the others, but…CBDCs (“Central Bank Digital Coins”) could lead to the digitizing of everything related to the US Dollar, so…the idea here must be that you need to get into both $USDC and $USDT to watch it unfold. AND you need to get into Bitcoin and Ethereum because they’re big and they’re like owning crypto ETFs without owning crypto ETFs.

AND…

Well, again, we’re back to a very binary and “univariate” question: will Biden (or anyone) kill the 401(k)?

Yeah, a lot of different variables here, and some of them could lead you down a crypto path…but owning a digital coin that’s going to thrive when the 401(k) dies is not that easy.

Multivariate Analysis FTW!

One of the goals behind our “Growth Portfolio” was to sorta/kinda act as a hedge that would sorta/kinda protect you against “monothinking.” “If silver up then gold down” is monothinking. “If dollar dies then crypto” is monothinking. “If I hold a basket of ten crypto tokens and see what they do in the market, I can continue to adjust accordingly as the days go by.” ← THAT SETS YOU UP.

The easiest way to avoid the charlatans, miscreants, and wackadoodles might be to avoid becoming one yourself.