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The 3 thoughts I like to play with when thinking about investments are 1) don't try to time the market 2) be greedy when others are fearful 3) don't measure

The 3 thoughts I like to play with when thinking about investments are 1) don't try to time the market 2) be greedy when others are fearful 3) don't measure your portfolio based on the high water mark I didn't sell everything at the top, though I suspected a drop was coming, I just hodl (not just crypto, stocks too). I have confidence that the companies I stock in and the crypto I keep are in companies/projects that I want to see succeed, not just those that I think will provide the best return, though those two things often overlap. However, now is the time to be greedy, and I'm sure that time will continue for the next 12-18 months. Is this the bottom? Probably not, but it may be bottom enough. The last point is what I find interesting where everyone says they "lost 20%, 40%, etc etc" but I've never understood why they take the high water mark and not what the market "should" have been priced at. We are confident 2020/2021 were significant bubbles driven by monetary policy. So why would we consider the top of the bubble to be what our portfolios should have been valued at? I prefer to look at the price from 2019, and look at the return on investment from there, or earlier if you like. Compare where your portfolio is to had you been in cash or other investments. To me, this is the way to take the long view. Yes, you could have sold at the top, you didn't, so you never had that value. I find this mentality helps me keep an eye on the longer-term. YMMV

all2 4y ago
I've been measuring my buy'n'hold portfolio in terms of total gain / time. Have I "lost" a bunch of money since the peak? Yes (most of my stocks are tech). Do I care about losses since the peak? No, that isn't how I measure value. I've taken a similar tack when determining the value I have in a vehicle for example (or the cost/location of an apartment relative to common commute destinations). Basically, the value of the thing is in the utility I get out of it, rather than what others would pay for it. My car, for example, gives me a huge amount of utility in terms of visiting family, friends, engaging in hobbies, traveling relatively unfettered, etc. If I had to value that utility I would compare what I can currently do with the closest conceivable alternatives. It makes for a fun spreadsheet puzzle, to be honest. The last time I dug in and did the math, it was for housing location and cost, commute distance and cost, and cost-of-time.
- pedalpete 4y ago
  That's really cool. I hadn't thought of it that way before, but when I think about the tools people use to track spending, etc, I wonder if the metrics you are using could help people use their money more wisely.
dominotw 4y ago
>1) don't try to time the market > 2) be greedy when others are fearful Aren't 1 and 2 contradictory to each other. If you don't time the market how exactly are you supposed to be greedy?
- pedalpete 4y ago
  Yes, they are contradictory to an extent, which is why I believe it is a powerful strategy to try to balance the two. I believe it's about deciding how aggressive you are going to be at what time. It doesn't mean sit on the sidelines and wait until everyone is fearful and then get in. It's about trying to make one or two great moves now, when everything is down. As things go up, you'll get less aggressive, not more, which is the opposite of how most people react to the markets.
  - adammarples 4y ago
    So it's 100% about trying to time the market then
    - pedalpete 4y ago
      That's correct if you are only able to operate in absolutes. I think you'll find life is more nuanced than that

all2 4y ago

I've been measuring my buy'n'hold portfolio in terms of total gain / time. Have I "lost" a bunch of money since the peak? Yes (most of my stocks are tech). Do I care about losses since the peak? No, that isn't how I measure value. I've taken a similar tack when determining the value I have in a vehicle for example (or the cost/location of an apartment relative to common commute destinations). Basically, the value of the thing is in the utility I get out of it, rather than what others would pay for it. My car, for example, gives me a huge amount of utility in terms of visiting family, friends, engaging in hobbies, traveling relatively unfettered, etc. If I had to value that utility I would compare what I can currently do with the closest conceivable alternatives. It makes for a fun spreadsheet puzzle, to be honest. The last time I dug in and did the math, it was for housing location and cost, commute distance and cost, and cost-of-time.

pedalpete 4y ago
That's really cool. I hadn't thought of it that way before, but when I think about the tools people use to track spending, etc, I wonder if the metrics you are using could help people use their money more wisely.

dominotw 4y ago

>1) don't try to time the market > 2) be greedy when others are fearful Aren't 1 and 2 contradictory to each other. If you don't time the market how exactly are you supposed to be greedy?

pedalpete 4y ago
Yes, they are contradictory to an extent, which is why I believe it is a powerful strategy to try to balance the two. I believe it's about deciding how aggressive you are going to be at what time. It doesn't mean sit on the sidelines and wait until everyone is fearful and then get in. It's about trying to make one or two great moves now, when everything is down. As things go up, you'll get less aggressive, not more, which is the opposite of how most people react to the markets.
- adammarples 4y ago
  So it's 100% about trying to time the market then
  - pedalpete 4y ago
    That's correct if you are only able to operate in absolutes. I think you'll find life is more nuanced than that