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by smabie
1483 days ago
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I mean any asset is vulnerable to being worth $0 at any moment. For example your previously valuable house could actually be worthless due to a structural defect or a previously valuable company could be worth nothing due to massive fraud. Moreover total crypto market cap still high 12 figures so I fail to see how that proves your point? |
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Absolutely, totally wrong. Let's look at some of the most common assets.
- Houses:
> your previously valuable house could actually be worthless due to a structural defect
Wrong. If you buy a new house, you likely have a builder's warranty. If you buy an existing house, you get an inspection. Unless the house is very inexpensive and the inspector is totally incompetent, you're not going to find something that costs more to fix than the house itself cost you.
But even if you did and the house could no longer be occupied, you'd still be able to sell the land and salvage building materials from the house.
Your house can't suddenly be worth $0 because of the collapse of a speculative market. You can be underwater, but if the house can be lived in or the land can be used, it has value.
- Cars: Can be sold for parts or scrap.
- Stocks: Legally entitle you to profits of a company, which is only worth $0 if the company has been involved in major fraud or you bought the stock of a company that was insolvent already. Definitely possible, but easy to avoid. Microsoft is not suddenly going to blow up, for example.
- Govt bonds: Possible to become valueless, but usually backed up by something in a developed country (like bankruptcy laws). If a credit-worthy country like the US has bonds that suddenly become worthless, society is probably otherwise collapsing and you have other problems.
- Gold/silver/diamonds: Can't become valueless because they have industrial uses.
- Index funds: Would, again, require a societal collapse to lose all their value.