Depth Analysis of Trader Rocky's Investment Strategy

1. About Trader Rocky

Rocky is the co-founder of Blue Ocean Capital, focusing on Web3 secondary market investments. His trading strategies mainly include the following points:

1. Trading Logic:

   • Conduct subjective strategy investment using a combination of Alpha and Beta models
   • Adopt a top-down research and analysis framework: macro analysis to determine trends and manage positions, industry analysis to select betting tracks, project fundamental analysis to filter projects and manage the investment portfolio.

2. Capital scale:

   • Determine based on the acceptable risk drawdown
   • The scale of funds needs to match the number of investment targets. Generally, for an investment of $0-200,000, around 5 targets; for $200,000-1,000,000, around 10 targets; for $1,000,000-5,000,000, around 15 targets; for $5,000,000-20,000,000, around 20 targets; for over $20,000,000, no more than 30 targets.
   • Currently managing assets under management (AUM) of 45 million USD

3. Expected Returns and Capital Cycle:

   • Mainly studies the dollar cycle, believing that the dollar cycle is highly correlated with the risk asset market.
   • The US dollar generally has a cycle of 4.5 years, with a 2-year contraction period ( interest rate hike ), and a 2.5-year expansion period ( interest rate cut ).
   • Currently at the end of the interest rate hike cycle, a rate cut cycle is about to begin

4. Risk Control:

   • Position Risk Control: Based on macro data insights, such as the US Dollar Index, 10-year US Treasury yield, M2, etc.
   • Portfolio Risk Control: Track project data through the Dashboard
   • Basic Line Risk Control: Adopts the "Three Four Zero" principle with a 30% risk warning and a 40% liquidation line.

2. The Trading Story of Rocky

1. About the investment in Render($RNDR) and Kaspa($KAS):

Render:

• Discover projects by following Multicoin investments
• Analyze the business model and find a positive capital cycle.
• Communicate with the project team to discover additional potential

Kaspa:

• Found when looking for new projects for mining machines
• Pay attention to the team's background and project characteristics.
• Obtain high returns through mining

2. Five Promising Tracks in the Second Half of the Bull Market:

• AI: Top VCs continue to invest, primary market enthusiasm remains strong
• RWA: Similar to the 2020 DeFi track, in line with the globalization strategy of dollar assets.
• DePIN: The easiest way to bring Web2 users into Web3
• BTC Ecosystem: Expected to unlock dormant assets and bring in incremental markets.
• GameFi: An important source of user growth, still has considerable room for development.

3. Investment Advice from Rocky

1. Do not touch leverage, contracts, and do not borrow money to trade cryptocurrencies.
2. Do not engage in high-frequency trading; spend more time researching macro trends, sectors, and projects.
3. Broaden your horizons and communicate more with industry professionals.
4. Do not invest in projects you are not familiar with or do not understand.
5. Don't try to take shortcuts or overtake on a bend, focus on truly valuable projects.

4. Recommended Reading

1. Macroeconomic Relevance:

   • Zhou Jintao's "Wave Motion Cycle Theory"
   • Hong Hao "Cycles"
   • Kindelberger "Manias, Panics, and Crashes: A History of Financial Crises"
   • Roth's "The Great Depression Diary"
   • Shiller's "Irrational Exuberance"
   • Mankiw "The Theoretical Evidence Analysis of Economic Cycles"

2. Recommended to follow Twitter:

   • Bianco Research Institute
   • Bloomberg Analyst
   • Top VCs such as Sequoia Capital, Multicoin, a16z, etc.

3. Project Analysis Tool:

   • Messari Report
   • Nansen's Smart Money data
   • LunarCrush Market Sentiment Observation
   • TrendX AI-driven Web3 market heat tracking
   • Alphascan early Alpha project capture