Price of Ignorance
PETER LYNCH, the famed Fidelity Investments��� mutual fund manager, used to advise investors to ���buy what you know.��� But many of today���s investors have other ideas.
Obscure cryptocurrencies and nonfungible tokens have taken the financial social media by storm. Most investors have heard of bitcoin, ethereum and dogecoin. But a new set of coins have emerged���cardano and solana are the hot trades. Meanwhile, JPEG and GIF image files are changing hands for ridiculous amounts of money. I���m reminded of another investing adage, this one from Warren Buffett: ���Price is what you pay. Value is what you get.��� I wonder what the Oracle of Omaha thinks about all this.
In February, market-watchers marveled at NBA Top Shot. It���s a platform where individuals can own GIF images of superstars as if they were digital trading cards. Sales surged as it went viral across social media. Individual ���moments��� sold for more than $100,000. At the peak of the frenzy, the combined value of all NBA Top Shot moments had a market cap above the value of some NBA teams.
One-upping those prices is the latest round of insanity. EtherRock 27 (yes, that���s a thing) recently sold for some $3 million. It���s a picture of a fake rock. What���s the appeal? Perhaps it���s the chance to impress acquaintances at a dinner party by saying you have so much money you can just throw it at the most useless thing imaginable.
I believe financial markets often know more than what my small brain can fathom. No, I don���t own any GIFs or cryptocurrencies. But I do believe the assets of the future could look different from what seasoned investors are used to purchasing today. Keep an open mind���but don���t go all-in buying things you don���t truly understand.
Obscure cryptocurrencies and nonfungible tokens have taken the financial social media by storm. Most investors have heard of bitcoin, ethereum and dogecoin. But a new set of coins have emerged���cardano and solana are the hot trades. Meanwhile, JPEG and GIF image files are changing hands for ridiculous amounts of money. I���m reminded of another investing adage, this one from Warren Buffett: ���Price is what you pay. Value is what you get.��� I wonder what the Oracle of Omaha thinks about all this.
In February, market-watchers marveled at NBA Top Shot. It���s a platform where individuals can own GIF images of superstars as if they were digital trading cards. Sales surged as it went viral across social media. Individual ���moments��� sold for more than $100,000. At the peak of the frenzy, the combined value of all NBA Top Shot moments had a market cap above the value of some NBA teams.
One-upping those prices is the latest round of insanity. EtherRock 27 (yes, that���s a thing) recently sold for some $3 million. It���s a picture of a fake rock. What���s the appeal? Perhaps it���s the chance to impress acquaintances at a dinner party by saying you have so much money you can just throw it at the most useless thing imaginable.
I believe financial markets often know more than what my small brain can fathom. No, I don���t own any GIFs or cryptocurrencies. But I do believe the assets of the future could look different from what seasoned investors are used to purchasing today. Keep an open mind���but don���t go all-in buying things you don���t truly understand.
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