A Casual Talk on the Timing of Cryptocurrency Investments: The Changes of the Years

Today, we continue our casual discussion about investment time.

The theme is about change,

which means that over time,

many things will undergo changes.

So, as an investor,

you should not be overly sensitive to change,

but you must pay attention to it.

We shouldn’t be so sensitive to market stock price fluctuations,

but we should have a certain sensitivity to changes in business operations,

especially changes in the industry.

Because if you ignore industry changes,

it can lead to the failure of value investing.

I have previously mentioned many high-quality retail companies,

such as Gome,

Suning,

they were very successful,

and defeated all their competitors,

but the emergence of online retail giants like Alibaba,

JD.com,

in a very short period of time,

created enormous competitive pressure for them,

making their profits unsustainable,

and even leading to decline.

Therefore,

you need to be very sensitive to demand and industry changes,

especially in industries that are prone to change,

such as the electronics industry.

For example, in about 10 years,

everyone stopped using traditional phones,

and switched to smartphones,

and smartphones have evolved through many generations.

If you’re not sensitive to change,

even if a company was once highly competitive,

and had good management,

sometimes it cannot withstand industry shifts,

like the saying goes, “arms can’t twist thighs,”

for example, bicycles are gradually being replaced by electric bikes and cars.

So, you must observe industry changes,

which may be slow,

but are fundamental,

and decisive.

Therefore, everyone should pay attention to changes in the industry and even in individual companies.

For instance, changes in corporate culture,

when a senior CEO is replaced,

the impact on the company can also be observed.

For example, a company’s moat that once existed may gradually disappear.

Although people still think it is a moat,

it may no longer be a moat,

there are many such examples,

I won’t elaborate here.

For example, some companies are currently very profitable,

but that doesn’t mean they will always be profitable,

because competitors will enter,

and this will change the supply and demand relationship.

Everyone must be sensitive to change,

some things you see growing continuously,

but you need to analyze whether they will continue to grow in the future, whether the industry has reached a ceiling, whether there will be excessive competition, how high the barriers to entry are, and you need certain analytical skills to assess these factors.

The earlier you recognize these possible,

but certain, changes,

the more money you can make in this market.

Warren Buffett and Charlie Munger have both said,

that someone who understands change will make a lot of money in the market.

Although this is quite challenging,

but as long as you understand a certain industry or a specific category of industry,

that’s enough.

One of our main valuation methods is the discounted cash flow of future cash flows.

which means making a relatively accurate valuation of a company’s future profits.

If a company’s operations change,

overestimating or underestimating can lead to valuation failure.

So, you must be very sensitive to changes in companies and industries.

Time can change everything,

like I am over 50 years old this year,

30 years ago, I was also a young man,

time changes day by day,

although the change is slow,

it definitely happens,

and it plays a huge role.

Don’t think there is no change just because you don’t see it every day,

the same applies to companies.

Company changes can be even faster,

within 5 to 10 years.

You may not see these changes every day,

but through your analysis, reasoning, some indirect observations,

and accumulated historical experience,

you should be able to see some changes others cannot.

The more you can see what others cannot,

the more you can earn in investments that others cannot,

this is also a game of cognition.

**$RAVE **$FRAX $POWER