Friday, March 30, 2018

Stay Solvent in these Irrational Markets

Efficient markets? Bullshit.

We all know that the traditional markets are shit at pricing stuff.

The crypto markets are even worse, with more people at the extremes. Extremely intelligent people pushing the frontiers of this technology, and extremely stupid people hoping to get rich without understanding anything. The latter outnumbers the former 9 to 1.

Anyway, the point is that the crypto markets are extremely inefficient at pricing things.

I always use DGD as my example, because it was one of the few things that I was EXTREMELY sure that the market was pricing incorrectly.


During this particular "wtf gmgh u stoopid shit" zone, a lot of people were questioning my thesis regarding buying DGD.

It got particularly worse during the January period when DGD was trading at up to 40% below NAV.

A few people stuck in the boat as me were doubting themselves. 


I had many many conversations like this around the period when DGD was severely underperforming the market. While many people were dejected about the short term price performance of DGD (and recommending to buy the dip in Tronix or Ripple, FFS), I wasn't too worried about its long run price because I knew that when the market find its value, DGD would be trading much higher.

And I put my money where my mouth is. DGD was my biggest position, by a massive margin.


This is not a post saying that DGD will go higher.

Also not a post about me being awesome.

This is a post about me highlighting how the markets are extremely terrible at pricing.

I've been buying ETH heavily since $700+, and I just executed more buys at these levels. It is not easy to overcome emotions and be buying into these kind of depressed markets, especially when every TA chart points to even lower lows and no one is predicting a recovery for at least months away.

But I don't make money following what other people are saying. My money, my choice.

I make money buying things cheap, and then selling it high.


I am still in triple digit % profits even after injecting lots of fresh capital to buy this savage dip. I still have more ammo left in my war chest, and I'm not afraid to use it.

As always, this is not an invitation for you to do anything. Just watch me get rekt or rich - only one will happen.

Either way, you've gotta admit, this is some entertaining shit.

3 comments:

  1. I absolutely agree, but it's one thing to know it and one thing to do it.

    I lost round about the half of my crypto-investment, so I am at a double digit % minus so far, because of being one of the "late incomers" and buying some shitcoins and doing some wrong decicsions (researching the coins nevertheless, there's a lot of misleading and a lot of false prophets out there).

    I think a lot of crypto noobs are in the same situation now (or will be in a few days..).

    At the moment it's a good buying or slow dying situation : )
    All the cockroaches are coming out there edges and shouting "as I said, it's going worthless"

    It feels stupid to buy more at the moment, but im doing it anyway and in the end I hope it was the right decision to show some balls and not to fear out like the most of the "weak-hand get rich quick to the moon when lambo late incomers".

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    Replies
    1. Good luck to us both Peter.

      As long as you aren't (highly) leveraged and have no major upcoming financial obligations, it is easy to just ride out the dumps back into recovery.

      My heart goes out to all the new people that came in late to the game, but this is a long game and I believe we are just getting started. At least, that is how I have positioned my personal investments according to my thesis.

      I've opened up some long positions at 377 and 378, let's see how the market goes for the next few months.

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  2. I had a bit of cryptos (Doge, LTC, a little BTC) in a wallet about 10 months ago (about 22$)
    Decided it's no good to keep them there and decided to start trading them. After the transfer fees and everything I ended up with about 12$ of cryptos.
    At the time (8 months ago) I had 0 trading experience.
    Managed to get them up to about 0.023BTC (340$ in December) in total. Since the price crash has started in January when I went to ~220$ total. I've seen their price decrease all the way down to ~105$ (0.015BTC).
    How long do you think the dip in ETH, NEO and other related currencies will continue.
    I have no issue with hodl-ing for extended periods of time, as this is just a test for fun. And am currently seeing a lot of opportunities for profit as a day trader, but am simply not willing to invest any of my actual real-life-money.
    If you've got the free assets to invest - even when the price goes down, wait for the lowest point and buy in more. Wait for the daily rise and sell at a profit. This will average out your losses. Or alternatively do what I`m doing - just hodl.
    Remember - crypto trading is not a sprint, it's a marathon.
    2nd note - if your emotions affect your trading - get out. It's not for you.
    3rd one - if you can`t handle going through the dips, you don`t deserve to stay for the peaks.
    4th - do not invest what you cannot afford to lose.
    It's all a game of numbers. The important thing at the end is to have fun, learn from your experience and preferably be at a profit.

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