Note to readers: Hello world is a program developers run to check if a newly installed programming language is working alright. Startups and tech companies are continuously launching new software to run the real world. This column will attempt to be the "Hello World" for the real world.
George Goodman, the author of 1968 classic The Money Game, summaries the story of the Smiths who held IBM stock but never sold them, thus: ‘It is a parable of pure capitalism, never jam today and a case of jam tomorrow; but as any of the Smiths will tell you, anyone, who has ever sold IBM has regretted it.’
International Business Machines, the company, has been around for more than 110 years. If you discount a few ups and downs, it has delivered returns to shareholders year after year. So it’s no surprise that the Smiths were happy with their stock. Sometimes when the company underperforms, its stock goes down. Sometimes when the company performs well, its stock goes up. Analysts spend countless hours predicting the future value of such stock and billions of dollars ride on this. When you operate under such an assumption, investment decisions are relatively easier to make.
But lately, there’s another asset class that’s arousing the interest of investors once again. But it baffles most analysts. I’m talking about Bitcoins. Until a few months ago, it was the outcast among assets. Only hardcore cryptocurrency users and investors dared to dip their toe into the pool after the Great crypto crash of 2018. The price of Bitcoin had risen to an all-time high of $19,783 on December 17, 2017. Five days later, it fell 45 percent to $11,000. It continued its slide and fell to $5,500 on November 15, 2018.