A Casual Talk on the Timing of Cryptocurrency Investments: Opportunity

We continue the series of casual discussions about investing time.

Today’s topic is about timing,

which is, in investing,

the opportunities that Mr. Market brings you.

In this program,

I mainly talk about buying opportunities.

As an investor,

we usually spend a lot of time researching a particular industry,

and through qualitative and quantitative analysis, find high-quality companies.

At this point,

the stock prices of these companies are often quite high,

because good stocks are hard to be low-priced.

Therefore,

most of the time, when the research is almost done,

we put the identified companies into an observation pool.

Then observe,

in simple terms, wait for the price to fall.

Often, high-quality stocks,

rarely fall to very low prices,

because everyone has confidence in them,

so we need a lot of patience.

So what is the best timing? The best timing is during a bear market,

when you can wait for high-quality stocks at low prices,

and low P/E ratios.

Therefore, we should focus on building our circle of competence,

find such companies, and then wait,

which is to be fully prepared,

only waiting for the east wind.

This east wind is the plunge and bear market brought by Mr. Market,

which gives us this opportunity,

but most investors do not understand the importance of this opportunity,

they think there are opportunities everywhere in the market.

Of course,

there are indeed many market opportunities,

but there are also many risks,

unlimited opportunities are equivalent to unlimited risks.

Each of us has limited funds,

and our circle of competence is also limited,

we cannot seize all opportunities.

It may be a real opportunity,

but anything beyond our circle of competence is not our opportunity,

we should be willing to give up.

If your circle of competence is not enough,

your self-awareness is insufficient,

and you are arrogant,

thinking you know this company or understand many things,

then you blindly enter,

which will ultimately lead to investment failure.

Often, a person knows little,

and is even more blindly obedient,

because of human arrogance.

For example, heavily buying a stock,

at a high price.

So it is said,

arrogance and ignorance are common twin brothers in human nature,

often because you are ignorant,

so you are arrogant.

You think you understand everything,

but the reality is very bad,

either you bought what you shouldn’t have,

or bought stocks at the wrong price.

Maybe the company is good,

but you paid a very high price,

falling into a growth trap,

ultimately not making money,

or even heavily buying a terrible company,

and ending up with a devastating blow.

Many naive investors think opportunities are everywhere,

as if there is an opportunity every one or two weeks,

or even every day.

But in fact, good timing is definitely scarce,

you need to wait rationally and patiently,

until it appears within your circle of competence,

just like waiting by the tree for rabbits.

When the opportunity appears,

you must seize it without hesitation,

and no matter how the stock price falls afterward,

you must have confidence,

because you are already prepared.

The basic idea of the buy-in timing is this.

Don’t think that opportunities in the market are unlimited,

because most opportunities do not really belong to you,

so avoid frequent trading.

But most investors or speculators think there are many opportunities,

so they buy and sell frequently,

especially those who are losing money.

For most stock investors,

a fundamental way to increase your returns,

or reduce your losses,

is to reduce your trading frequency.

When you become very picky about stock prices and companies,

you will naturally make money or reduce losses.

By extending your holding period,

and focusing on building your circle of competence,

your chances of success will increase.

The timing for selling is the same,

you need patience.

If the price has not exceeded the company’s value,

don’t sell casually,

even if it’s slightly high, don’t sell recklessly,

because it’s not easy to buy this stock in the first place.

So don’t sell easily due to market panic,

sharp declines in stock prices,

or other news.

The timing to sell is passive,

only when the company undergoes a fundamental change,

such as a fundamental change in industry demand,

or a fundamental change in the company’s moat,

can you give up on it.