Principles and Framework
Like most people, I also feel fear. Yet that seems at odds with long-term value investing.
Hold Bitcoin in a bull market, and look for valuable altcoins in a bear market. Trading opportunities come from waiting.
Buying crypto, trading stocks, investing in funds—we have countless ways to invest, but often do not know which one suits us. Investing feels like a search for oneself. Perhaps, at a certain point, investing becomes philosophy. As in classics about professional speculation and reflexivity, everything eventually comes back to human nature. Buffett famously said to be fearful when others are greedy and greedy when others are fearful. But perhaps the number of people who can actually do that is close to zero.
Value investing suggests owning assets we believe in over the long term and companies with viable business models: assets whose fundamentals remain sound. Crypto, however, often follows whatever is popular and the current trend. If a token falls more than 60%, it may not recover quickly; it may even disappear altogether. Cutting losses in time is therefore also an important principle in crypto. Selling stocks that do not make money may be part of why the strong keep getting stronger.
Buying and Selling
Sometimes I want to buy one second and sell the next. That is chasing gains and panic-selling losses, usually losing more than I make. Often, the tokens or stocks that make money are the ones bought and then left alone. If we can hold for the long term and have chosen the right asset, a 5–10-year horizon may produce a good return. Of course, I also know that watching other coins rise while mine falls can be the greatest test of temperament. Selling at that point and then buying again often leaves us trapped in a losing position 😂. Perhaps that is simply the investment market.
We always imagine an asset multiplying in value—but what if the loss is just as dramatic? If we can bear that downside, we can buy the asset, yet we often cannot. Every industry or sector has a ceiling, though perhaps that ceiling is something we define ourselves, just as we attach labels to everything. When an indicator becomes a target, what should we do next? Perhaps we are all mistaken, because we cannot predict the future.
Buy when nobody is paying attention; sell when the crowd is loud.
