For those of you who aren't in the media business, let me let you in on a little secret. Editors love trendy items. These are stories that call attention to new trends in clothing, dating, and more. It's easy to write. All you have to do is find one or two examples of someone doing something slightly surprising and frame it as part of a larger trend in culture or society. And even if your evidence is a little flimsy, it doesn't really matter. Readers will devour the story in the same way. Below is a good example. wall street journalhas a trending article about the popularity of Costco's 1 oz gold bars among young consumers.
“Craig Beauregard and Julia Edwards were grocery shopping at Costco in December when they spotted a deal they couldn't pass up: one-ounce gold bars. Beauregard, 33 (years old) checked their phones and found that the bar's retail price of $2,069 was $3 less than the spot price on the financial market. They put it in their shopping cart and bought a 7-pound bag of frozen chicken and Kirkland eggs “Americans can't get enough money.''
This is a great story. Millennials are so worried about the future that they're throwing money into their shopping carts along with their eggs. But as they say, anecdote plural is not data. To be fair, journal It makes a half-hearted effort to show that Craig and Julia are not only prone to impulse buying, but also part of an honest-to-good trend. The paper not only cites two other 30-something buyers who bought Costco gold bars (three examples, so you can see the trend!), but also cites “the average Millennials allocate 17% of their investments to gold, compared to Gen X and baby boomers, according to a State Street study. Invest 10% of your portfolio in metals. ”
Hmm. I'm not a Millennial, but I know a lot of Millennials, and I would be very surprised if they put 17% of their wealth into gold. I looked into that research to find the methodology. And here's the source of that number: An online poll of 1,000 people investing $250,000 in gold ETFs found that 25% of them were millennials. In other words, that 17% figure is based on his 250 high-net-worth individuals who chose to be surveyed by Gold Company.
This is like getting an F on a statistics paper, but luckily this is a trending article so it doesn't really matter. The important thing is that journal This story is fun fodder for the debate about whether you should buy gold in these uncertain times. And since this is nominally a column about cryptocurrencies, it's about whether you should buy Bitcoin instead.
I understand the appeal of gold. Gold looks cool and has been used as a store of value in nearly every culture for thousands of years. And even if all the banks collapse, you can always dig up those Costco gold bars you buried in your backyard and try to barter your way through the anarchy that surrounds you. But there are also drawbacks. It's hard to use and hard to sell. And if you live in a state like mine, the sales tax will quickly drop him by more than 7%. Bitcoin, on the other hand, is easily divisible and highly liquid, but its store of value is only 15 years, and its network has yet to be tested in true Mad Max conditions.
There is also the issue of volatility. Bitcoin fell nearly 80% in the last crash, while gold's recent drop was at most about 30%. But more recent trends show that while gold is up about 12%, Bitcoin is up 58%, meaning that most people who bought and held Bitcoin for three years lost money. It has been shown that no one has. This is not investment advice and you must make your own decision. Personally, I'm looking forward to the day when Costco sells Bitcoin so I can write my own trend articles.
jeff john roberts
jeff.roberts@fortune.com
@jeffjohnroberts
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