“I think, at a child’s birth, if a mother could ask a fairy godmother to endow it with the most useful gift, that gift would be curiosity.” –Eleanor Roosevelt
It was around 8 p.m. on July 3, 2007, when my wife and I sat around our neighborhood pool discussing where to take our four young children on July 4th to see fireworks. She suggested we head downtown, but that’s an activity we had done before. Spontaneously, I suggested we head home and drive to Chicago to see a “big city” firework show. After a quick “why not conversation,” we raced home, packed, and headed north. The following day we rolled into the Windy City and watched fireworks at the Navy Pier roughly 24 hours after our spontaneous poolside conversation.
I have been a sucker for explorationand adventure as far back as I can remember. That spirit of curiosity has exposed me to new ideas including plenty of investment opportunities (some good, some bad). Looking back, I had a meeting on March 5, 2015, with a long-term client who passed along a question from their son-in-law: “Ask Eric what he knows about Bitcoin.” This was the second time in the span of a month that I had been asked that question. I’d heard the word before, but that was about it. Looking back through my Amazon purchase history, I can see that I ordered a book on April 8, 2015, called the “Bitcoin Big Bang”. That’s where a chapter of my financial exploration began.
Here is an attempt to explain Bitcoin in 100 words: First, the internet created a world where you could buy things from people you don’t know or meet. That lack of transactional trust can cause problems. Traditional money can be spent twice with some creativity, which can hurt one party in the transaction. Bitcoin, being decentralized, prevents one party from unilaterally canceling a transaction. Second, there is a limited supply of Bitcoin available. Only 21 million can ever exist. Dollars on the other hand can be mass produced (see the last 14 years) at the will of government officials (89 words!)
How can anything have value that doesn’t exist? Are addresses on the internet real and tangible? Can they be valuable? The internet removed history’s past requirement of tangibility as a necessity to value. By the way, carinsurance.com sold for $49.7 million back in 2010.
I cannot see the future well enough to know if you should buy Bitcoin. However, I do believe you should explore the idea and see if it plays a role in your broader investment and planning strategy. At PYA Waltman, we promote a curious spirit and seek creative solutions to investment management and financial planning. Find us at PYAWaltman.com or contact us if we can be of service.
The opinions expressed are those of PYAW’s Investment Team. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Forward looking statements cannot be guaranteed.
PYA Waltman Capital, LLC (“PYAW”) is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about PYAW’s investment advisory services can be found in its Form ADV Part 2, which is available upon request. PYA-22-07
