2021 The Year of Irrational Exuberance
The Year of Irrational Exuberance!
You know the times they are a changing when Instagram models, idiots you knew from high school and shoe shine boys start doling out investing advice.
I’ve been lucky in many ways. I’m no Rhodes Scholar, I’m not a member of Mensa nor am I so full of myself that I consider myself a subject matter expert on well… anything — but I am skilled in surrounding myself with people who are smarter than me & with that comes a lot of intel regular people aren’t privy too until the train has departed.
Months ago a few of those “smarter” friends suggested I get into cryptocurrencies with a caveat: don’t put in more than you’re willing to lose. Sage advice and smart on their part because if I lost everything it would be a risk I’d already calculated. Also, if I lost everything it wouldn’t be their fault =P
History was also on their side. They suggested similar advice in the crypto bull run years ago and I missed that train…
Needless to say this time around I took their advice and some of the investments have yielded neat returns. Where they are headed? Lord knows. I am going to ride the HODL train because I’ve invested only as much as I am willing to lose.
The train I hopped on in the Fall of 2020 is well on its way and many investments have hit all time highs. For those lucky enough to have boarded the train to Hogwarts during the fall semester a lot of magic has happened.
For those, on the other hand, who boarded the train a month ago when the pumpers started pumping — the story may pan out a bit differently.
Here’s a pumper below. Masterfully confusing the layman. Don’t buy Doge!
The future currency of Earth
— Elon Musk (@elonmusk) February 6, 2021
Here’s another billionaire pumper… leading the masses to oblivion.
Was losing $1B at one point today…BUT I got 💎 🙌🏽…and shooters shoot so….
Leading two PIPEs in deals being announced tomorrow.
— Chamath Palihapitiya (@chamath) February 23, 2021
Tweets, jokes and uncertainty abound — meanwhile the masses are treating the traditional and crypto markets like a casino. There will be a reckoning and it wont be pretty. In my short but exceptionally enlightening stint in this bull market three things have become abundantly clear:
- There’s no such thing as a free lunch
- Don’t put in more than you’re willing to lose
With that I’ll leave you with some wisdom from my friend who has accelerated my learning curve:
I highly encourage people to avoid short term trading for a variety of reasons, two reasons. 1) the shorter term an investment, the more efficient the market is. It’s like betting on an hour scale, the market efficiently prices for that hour. As you expand time the market becomes more inefficient and actual alpha opportunities become more available. 2) You have to make a lot more to offset tax inefficiencies
p.s. I’ve found my great socially distant escape from all that’s going on in the world. Cross Country Skiing ⛷ , where the air is fresh, there’s an abundance of solitude and the echos of irrational exuberance are mere howls.