LogFAQs > #928056643

Maybe I have undersold my background on the topic of investing in traditional asset classes. Without divulging too much on the internet (not that anyone should or needs to believe me), I'm what is legally termed a 'sophisticated investor'.

So back on topic, the point around markets being grossly overvalued, diminishing returns, etc... who is to say this isn't the new normal? And to say something is overvalued can only be a statement made relative to the intrinsic or fundamental value of something - but it's not to say that the pricing won't become the new normal given market prices are all about supply and demand.

I look at something like cryptocurrency and the biggest issue I have with it is there is absolutely no fundamental value to it beyond supply and demand (market prices) and it's based entirely on scarcity. Those who claim to be traders are often buying and selling almost entirely on technical analysis with a little bit of fundamentals around regulation and ability to cash out. Unlike say a traditional asset (not counting derivatives) where even if prices plummet, you still have something whether it be a share in a company' residual assets/equity, a metal which could be used in the manufacturing process, or a roof over your head. And whilst I know everyone hates regulation and government rules, but that's what makes a true market so appealing. Yes I'm aware there are downsides to this, but there are also plenty of upsides which help keep the market in many ways, fairer.

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If you can understand this, I'm 2/cosC for you.