Recently in a conversation with friends after a recent dip I couldn't help but comment: Buy High Sell Low - Why Are You Doing That?
Last 12 Months
Unless you're been living under a rock for the last 12 months it may have been difficult to miss the news around Bitcoin institutional investing.
There has been everyone from Paul Tudor Jones to Anthony Scaramucci that have made comments regarding BTC as a store of value. Even in a recent video, the Mooch talks Bitcoin;
So what does all of this mean?
It's easy to recognize the hype of what is happening right now. More and more are becoming aware of cryptocurrency beyond "it's that Bitcoin thingy....".
What happens when the hype takes over?
Emotions Management is Critical
Part of the excitement as well as the challenge of operating in todays day and age of cryptocurrencies is understanding your emotions and what is happening around you.
Countless personalities across the cryptosphere talk about the movements of markets, value & overall opportunities.
Although, none describe the phenomenon better than possibly in this video by Ivan on Tech.
Don't let the title deceive you or lead you in a less productive direction. The main message he is talking about through the entire 11 minutes or so is that so so so many people Buy High and Sell Low.
I know, I know... You must be thinking, that's not true. People know that you buy low and sell high. Intellectually we all get it.
Here's the thing. Take your own experience at any given time along your crypto journey. Now if you're an OG in this space and have mastered all chakras, entered the zen state on demain, etc, then you're done here.
For the rest of us mere mortals, read on.
What Actually Happens
So you're recalled some of your different experiences in the crypto space right?
Here's something, I'll give you one of mine.
In mid-summer 2020, I had been watching Theta Networks for sometime. Didn't quite fully comprehend the project, but knew that it was a winner on many levels and wanted to participate.
Theta had a recent jump from $0.08 up to around $0.40 and I knew that it would keep going. By the time I had move some things around I finally enetered around $0.60. Sound familiar?
Not long after that, assets across the space dropped 20% quickly. So I saw 60 cents go to about 45 cents and then lower.
Granted the longer term plan was to HODL and run a Guardian node so in the bigger picture those 20% drops are less significant. But you get the lesson right?
When the hype takes over, the savy AND emotionally strong crypto investor is able to withstand emotional decisions.
The Other Side of the Pump
Let's look at this situation in a slightly different light. Think back to 2008 timeframe when the real estate market finally crashed in the United States? Did you know anyone affected.
I knew several retired couples who had "Their Cheese Moved". If you don't know that one, basically the entire foundation of their knowing, understanding and belief was rattled to their core.
So from a lens of scarcity and safeguarding, you saw countless investors young and old sell off their already tanked assets for incredible losses.
Had they stayed in place for the long term, today the multiples in growth would have been staggering.
Now this isn't to say that everyone has to HODL. The point is that if anyone has a strategy and plan in place, then short of a blizzard in July there's usually not reason enough to deviate.
Buy Low Sell High
After looking at these last couple of examples, we come back to what we started with. It's almost as if the #1 and #2 Warren Buffett rules are in place.
Number 1 is: Don't lose money.
Number 2 is: When in doubt, refer to rule Number 1.
It's really that simple. Yes, I understand that when it looks like everything is imploding, the last thing you want to do is look at your portfolio being down double and possibly triple digits.
Have your plan as I referred to in a previous article: https://read.cash/@BryRi/have-a-plan-stick-to-the-plan-adjust-you-will-be-tested-fff519ae
Now that you're thinking about, in todays market, don't run when it looks like the cliff is coming. Stick to your plan.
