Will Bitcoin Displace the US Dollar? And More Reader Q&A on Networking Overseas, Degree Programs, Responding to the Haters, and More

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2013 End of Year Q&A: Bitcoin EditionI was recently back in Korea and found myself in the same exact coffee shop where I wrote 100+ articles, edited 100+ hours of video, and also answered hundreds of reader questions “back in the day” in 2009-2010.

It was so nostalgic that I said, “Hmm, well, it’s been a year already – might as well do another one of these reader Q&As.”

So here we are.

It’s a lightning round of questions on networking, degrees and certifications (my favorite topic in the world), with some responses to the haters and trolls as well.

But let’s start by talking about the top financial news story of 2013: Bitcoin.

Will it take over the world?

Is it going to displace the US Dollar / other currencies / gold?

Or is it just another tulip bubble waiting to burst and smother everyone in toxic seeds?

My take below…

Bitcoin: World Domination?

Q: Will Bitcoin take over the world?

A: I am very bullish on virtual currencies (not Bitcoin specifically, just the category as a whole).

Right now, Bitcoin is way too volatile to be used as a serious currency – but if it settles down (and/or another virtual currency takes its place) it could be huge.

Oh, and right now a very small number of people own a huge percentage of all Bitcoins, so it’s almost like investing in an illiquid, private company.

Disclosure: I have a substantial position in Bitcoin.

Q: Wait, what? Isn’t it a really bad idea to put money in?

A: In my view, there’s a 95% chance that Bitcoin’s price will come crashing down and a 5% chance that it could go much, much higher.

The “expected value” is still positive, but I only put in an amount that I’m fine with losing.

Of course, everyone else is thinking the same thing, which is why 95% of Bitcoin trading this past year has been speculation.

Disclaimer: This is not “investment advice.” These are just my personal views. Please do not interpret this as investment and/or legal advice.

Q: What about China / other governments shutting it down?

A: The market overreacted to that news.

Sure, it’s not a positive sign that the world’s 2nd biggest economy doesn’t like Bitcoin – but using the currency to get money out of China is just an early use case.

You’ll see its real potential only when people start using it the same way they use PayPal.

Q: But it’s not real! It has no intrinsic value!

A: And you think our current system of fiat currencies, backed by nothing, is “real”?

Do you think a paper dollar has any intrinsic value?

Sure, technically a fiat currency is backed by “the full faith and credit of government,” but what does that mean? Governments go bankrupt, countries get taken over, currencies collapse…

If we still followed the gold standard, I would agree with this assessment.

But since we don’t, I think Bitcoins are more credible than fiat currencies – neither one is backed by anything, but at least the supply of Bitcoins is limited.

Q: OK, point taken, but why are you so bullish? What is intrinsically good about Bitcoin?

A: In the late 1700s / early 1800s, there was considerable debate over how to develop the western part of the US: everyone assumed that horse-and-buggy roads or canals would be required, but there was wide disagreement on funding, routes, etc.

Then, an unforeseen development came along and made that debate irrelevant: the railroad (for more, see this excellent book).

In the same way, the debate about central banks’ “easy money” policies, the fall of the US dollar, the world’s next reserve currency, and whether or not the fiat currency system will last may be settled by another unforeseen development: virtual currencies.

How to Network While Overseas

Some people claim that it’s “impossible” to network in your home country while overseas.

Those people are, of course, completely wrong because I’ve seen friends, readers, and former co-workers do it.

Q: OK, so how do you approach networking when you’re in another country?

A: Ideally, you’ll meet people in-person in your own country first and then use your overseas time to follow-up and send quick messages to everyone.

Do NOT use templates for this follow-up – if you’re using templates, you’re barking up the wrong tree.

Send quick 1-2 sentence emails saying, “Just wanted to check in and express my continued interest in [Firm Name].”

That’s the easiest way to A) Avoid using the wrong name and/or misspelling it; and B) Reduce the time required to stay in touch with everyone.

Q: What if I can’t do that / I’m already overseas?

A: If you can’t do that, just set up informational interviews when you’re overseas and make them short due to the time zone difference.

Then, meet your best contacts as soon as possible once you’re back home or they may forget who you are.

Q: What if I’m overseas permanently / I can never get to the country I want to work in?

A: Uh, then you have almost no chance of working there unless you transfer internally.

Lots of people “say” they want to work in places like Hong Kong, Dubai, and Singapore, for example, but they’re rarely taken seriously unless they visit in-person at some point.

And if you “don’t have the money / time”: are you serious enough to make the move?

Q: Should I cancel my plans to go abroad if the program takes place during summer internship recruiting?

A: If you have the option to go abroad at a different time, yes, target that different time instead.

But if that semester is your only option, it’s still worth doing… IF you can network in advance and use your time overseas to stay in touch with your top 20-30 contacts, as recommended above.

You can still interview when you’re overseas, but you’re always at a disadvantage if you’re far away.

The Six Degrees of Kevin Bacon

Hey, we could all use an extra degree or two, right?

Or what about my favorite topic of all time: the CFA.

Q: I’m going for my MBA. Should I take 3 years and get a JD as well?

A: No, probably not. It won’t add much unless you go into something like restructuring / distressed M&A and/or distressed investing where legal skills may help.

An extra degree won’t necessarily “hurt” you, but one extra year is a big opportunity cost.

NOTE: This is not true in all regions. Apparently combined business / law degrees are kind of a big deal in Australia, for example

Q: I have 3 years of Big 4 experience auditing PE firms. Should I complete a normal Master’s degree or an MBA to get into private equity?

A: Neither one, if you can help it.

Network extensively right now, and only consider those degrees if 6 months go by and you get no traction.

If you don’t get much traction, the normal Master’s degree program might be better since it costs less time/money and gives you access to recruiters (assuming it’s a top program)…

But if you have closer to 5 years of experience by the time you enroll, you might need the normal MBA to make a real career transition.

Q: Should I complete the CAIA or CFA?

A: My favorite question ever! Can I give you a cookie? How about a Bitcoin?

If you’re going to do one of these and you don’t know your future plans yet, do the CFA since it’s more broadly applicable.

And then if you really like taking standardized tests and you have nothing better to do with your time, you can think about the CAIA.

Q: I’m from a non-target school with a low GPA, and I also have no work experience.

I’m considering your online courses and/or the New York School of Finance – if I do one or both of those, would a Master’s in Finance degree still be helpful?

A: If you can get into a top program with good access to banks recruiting on-campus, yes, definitely.

You should still do some networking on your own first, but Master’s degree programs are very helpful for re-branding, overcoming a lower GPA or a lesser-known school, and so on.

Just make sure you speak with real students there first to verify that finance firms actually recruit on-campus for front office roles

Responding to the Haters

Q: This site is too commercialized! You’re selling too much stuff! It’s obvious you’re a sellout, why should I continue reading?

A: No one is “forcing” you to buy anything.

We give away massive amounts of free content, including hours of free videos via email and YouTube, and there are almost 500 articles on the site now.

Yes, we also sell courses, coaching, and so on because this is a business and therefore needs to make money to continue operating.

If you think the advertising here is “intrusive,” have you ever visited Motley Fool? Or any site that uses banner ads? I rest my case.

Q: Your Doomsday predictions have gotten ridiculous.

The world is not going to end tomorrow – stop acting like everything is going to fall apart.

A: I think you misunderstand my predictions.

Yes, I am generally pessimistic but I’m NOT saying “the world is going to end tomorrow” – my only point is that the US and other developed countries are in a state of decline that is unlikely to be reversed anytime soon.

And yes, I’ve mentioned gold, commodities, and tangible assets before, but it’s not because I think the Apocalypse will arrive tomorrow – it’s because you want to diversify as much as possible.

Q: How can you possibly recommend a book (The Great Deformation) that says the finance industry is nonsense and shouldn’t exist?

That’s hypocritical.

A: My goal has always been to tell it like it is even when “it” is negative or unflattering.

I’ve written, for example, that the pay in entry-level finance roles is not great on an hourly basis, that the “prestige” is overrated, and that much of what you do is dull and monotonous.

So it is entirely consistent to admit that the finance industry would be 10x smaller / possibly nonexistent if:

  1. We were still on the gold standard;
  2. The Federal Reserve didn’t exist; and
  3. Capitalism hadn’t been horribly corrupted.

But that is the world we live in, and that’s the way the game works.

I can’t change the game, but I can teach you how to tilt the odds in your favor.

Q: This new site design is junk! It looks like there are just a bunch of ads all over the place, and it’s harder to read. What were you thinking?

A: Point taken, but the site needed to be upgraded and I wanted a homepage that clearly laid out everything available here in one spot.

I agree that the readability could be improved, so we’re going to tweak that very soon.

But no, we’re not going back to the old design – sorry.

There were too many problems, it was hard to use on mobile devices, it was hard to find all the articles, and it looked much less professional.

Q: I read your entire life story, but I don’t get it. How do you motivate yourself?

How do you force yourself to work constantly? Why are you doing this?

Do you enjoy it?

A: I’ll close by letting Walter White answer that one for me:

Walter-White-Liked-It-Good-At-It

About the Author

is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys learning obscure Excel functions, editing resumes, obsessing over TV shows, and traveling so much that he's forced to add additional pages to his passport on a regular basis.

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20 Comments to “Will Bitcoin Displace the US Dollar? And More Reader Q&A on Networking Overseas, Degree Programs, Responding to the Haters, and More”

Comments

  1. Ankit says

    Brian,
    I’ve been reading M&A for a while now and am a paid member of BIWS as well. The last few articles about your life story and this particular article really is what made me post my first comment on any of your sites and just wanted to let you know I really admire you and you’re way of calling it like you see it. I’ve not only learnt a lot about finance in general but also got a few life lessons from the two sites.
    I read this in a book called ‘Chose Yourself’ (not promoting the book in any way, although it is a good read) and believe it is somewhat true; a third of the people that you interact with or are exposed to will always be there to hate and criticize. All you can do is choose who to take seriously and ignore the rest.
    You killed it with the Walter White still there at the end. I wish you the best in this coming year!

  2. Hayden says

    Hi Brian,

    Just wanted to say you’ve done a brilliant job at entertaining me while writing about finance. I randomly stumbled upon your website a few years back and have continued to read your emails over the years, and you have perhaps lent a hand in me deciding that finance is not really the right career path for me!

    Thanks for all the good work and keep it up dude!

  3. S says

    Yet again, another excellent article. It probably gets old hearing this all the time, but I can’t help but praise you for the quality of each article.

    Brian, do you watch Peter Schiff on youtube by any chance? From the way you phrase a lot of things, it seems you’re familiar with his opinions and agree with a lot of it.

  4. Henry says

    Re your Bitcoin position, how can you be “fine” with losing a substantial investment? Do you have an target price to sell?

    • says

      I’m fine with it because it’s not a huge percentage of total cash available (“substantial” was probably an overstatement), and I am almost entirely in cash now anyway since the stock market is in bubble territory.

      If it dropped to a much lower price, I might actually buy more – because I’m planning to hold it for a long time, and I still think it could increase by a huge amount.

  5. Mike says

    Hello,

    I have been interning in public accounting specifically tax services. What kinds of opportunities exist for CPAs to jump into finance related careers? Is there a specific industry that is the best fit? When is the ideal time to leave the accounting world to join a more finance geared career?

    Thanks.

  6. Jon Smith says

    I still find your argument for the BitCoin to be quite weak. Fiat currencies have more value because, for the most part, to deal with companies in a given country you generally have to use the local currency. For example, Euros in Germany and Dollars in the United States. Thus you can say that demand and the value of a currency is driven by all of the value producing entities in those countries. BitCoins on the other hand are not necessary for any legal transactions. Their value is driven primarily by speculators such as your self. If anything, BitCoins are more like gold than any fiat currency out there.

    • says

      You might be right, but as I said I am less interested in the specific value and more interested in their use as an actual currency, which will only increase over time. Some Internet companies already do accept it as a currency, and more will do so in the future.

  7. Tonka says

    Excellent article as always.

    I don’t think bitcoin can over react to news that a government is shutting it down. Besides someone else coming out with a better alternative, isn’t that the real risk here, that the government decides they’ve had enough and seize every site associated with it…kind of like what happened with online poker. It would technically still exist, you just couldn’t access it.

    One thing I don’t get is how the real benefit is secrecy, but volatility matters. If all I cared about was secrecy I wouldn’t care about volatility. I would only care about liquidity. If I could go from USD to bitcoin back to USD with no slippage and a secret transaction in between, then volatility doesn’t matter. Personally I don’t really care if the government knows where I buy my morning coffee.

    • says

      Yes that is true, those are risks. I don’t really care about secrecy because there is no such thing as secrecy – all governments spy on everyone no matter what they do. The volatility issue is much bigger.

  8. Kombat Wombat says

    A lot of great free content on this site, Brian. Really admire your work here. Actually started reading this after I broke into the IB industry in Asia. Found a lot of the stuff written here inspiring, enlightening, and just witty in general.

    Random question, but I must ask, why are none of your articles and comments dated?

    • says

      Thanks! If something is date-dependent, such as bonus predictions or reports or a specific deal, then we list the date.

      Otherwise, I prefer not to list dates because doing so biases readers against older content that is still perfectly relevant. And it hurts our traffic on older articles. And it just seems silly to list dates on something like interview tips or resume templates/tutorials – those topics don’t change much, if at all, over time.

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