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RE: Discussion - What are reasons investors avoid STEEM?

in #steem6 years ago

Hi @timcliff... allow me, for a moment, to take the 50,000 foot overview of investing, as I have experienced it.

In conventional investing, there is always a tradeoff. High "current income" almost always comes with a considerable downside risk to the price of the asset you're holding. High current income typically comes from high risk "junk" bonds and sketchy Real Estate Investment Trusts (REITs). Sometimes current income can also come from EFTs specializing in currency arbitrage.

MOST investments are a long term (2, 5, 10+ years) proposition hinging on appreciation in the value of the asset, because the underlying project does something really excellent. For example, I had the good fortune to be able to buy 1000 shares of Dell computer when they were "nothing," and I paid (adjusted backwards for splits) about $0.94 a share, and sold them for $40-something, several YEARS later. I made 50x(!) my money back. In that 3.5 year period I never received a single cent of current income!

What does this have to do with Steem?

A LOT, I'm afraid. When people keep pitching Steem as a "current income" investment, you're pitching an idea that REMOVES money from the table. As long as money keeps flowing OUT to income seekers, there's a constant drain on the system. In essence, it's like a bathtub you fill at the top, but because the drain at the bottom is partially open, the "pressure" needed to create an excess of demand over supply (the mechanism that drives price increases) never gets to really build.

I know it may sound like a dandy idea to pump $1mn into a bidbot that generates daily revenue... but consider the very distinct possibility that the delightful $500 a day you get to pull out PALES in comparison to fact that your million dollar investment has declined in value to $600K by the end of the year.

So step 1: Focus more on pitching Steem as a great "buy and hold" investment. If you want "hands on," do something along the lines of what came out in your recent interview with @steemed... delegate it to content and community based initiatives, thereby putting your investment to work at increasing the base value of what you put IN.

Step 2: Look at what KIND of investor we're trying to reach. There seems to be a heavy focus on "big fish," but what about the approach of having several thousand people putting in $5K each? This is a high risk gig. Spitting up $1m for this is a little bit like high stakes gambling. Asking 10,000 people for $5K each? Now we're looking at amounts a lot more people can "afford to play with." It also means any one single player has far less influence... both in terms of selling their stake AND community influence. In turn, a large number of investors gives you FAR more "bang for your word-of-mouth buck."

IF I had money of my own to put in (sadly, I don't — I pretty much live "shutoff notice to shutoff notice") I'd most likely delegate it in manageable chunks to an assortment of proven manual curators, with smaller delegations to promising newcomers... the latter as a sort "retention device."

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