These are my favorite TRUE clichés about investing in
RINSE AND REPEAT
We obsess with getting that huge sale The stuff of dreams! But most fortunes are made from a multitude of small sales, from consistent rinse & repeat Instead of dream-pricing, price realistic Realistic pricing =Real sales = you can buy more NFTs = you can make more sales = You can rinse & repeat!
The same goes for coins, constant profit-taking is the rinse & repeat of coin investing, being a take-profits-whore will make you much richer than eternally waiting for that elusive 100x
Over-investing is your ticket to failure being all-in financially will stress you out stress = terrible decision making (impulses, fear…) Try to only INVEST MONEY YOU CAN AFFORD TO LOSE You’ll survive any crashes + You’ll make smarter plays
—‘But I ain’t rich, what is money I can afford to lose?’ Well, it’s the amount of money that you don’t need to PUT FOOD ON THE TABLE—or to pay the rent/bills, or to cover unexpected emergencies—over the next few months
—‘And how many months that is?’ It depends on how safe your day job is (or if you don’t have one, how hefty your savings and/or income streams are) the safer your job situation/savings/income, the fewer months of buffer money you’ll need to stay on the safe side of things
ALWAYS BE LIQUID
Even that money you can afford to lose… don’t invest it all! Liquidity is the investor’s ammo… you’ll be finding good opportunities all the time but you need to learn to say ‘enough’ at some point before you spend all your ammo. Otherwise, you won’t be able to buy that REALLY good opportunity that life will put on your way — and trust me, there’s always a much greater opportunity around the corner than the one you’re on the fence about right now. Don’t settle for ‘just-okay’ opportunities.
Liquidity is also crucial to buy unexpected deeps caused by BLACK SWAN events.
E.g. When covid panic threw Bitcoin down to $3k in March 2020.
At the time, I didn’t have any liquidity to buy that glorious deep and I’m still regretting it to this day!
One of the biggest clichés — and one of the truest!
Together with not over-investing, the single most important skill to survive in crypto & NFT land is learning to resist FOMO
FOMOing kills your liquidity
FOMOing makes you overinvest
FOMOing will 99% of times…
…make you buy too expensive (buy tops)
‘Don’t FOMO’ is easier said than done tho, because in NFT and crypto land we are all bombarded 24/7 with FOMO-inducing stories
I myself FOMO-tweet continuously — it’s part of the trade!
But the difference between a failed and a successful investor is that the successful investor sees beyond FOMO.
FOMO is the language in which crypto/NFTs content is communicated.
The smart investor gets this, understands FOMO speak, yes — but never FOMOES INTO positions.
DON’T PUT ALL YOUR EGGS IN ONE BASKET
CryptoKitties anyone? Terra Luna anyone? Things that once were on their sure way to the moon can insta-deflate Spread your risk, and if you are going to make a long-term bet, find projects that have crazy-strong fundamentals
IT’S ALL ABOUT THE FUNDAMENTALS
Fad-investing has its place don’t get me wrong But invest in fads knowing that they can insta-tank Invest in them looking to take profits ASAP so that if they go to zero you are in green all the same For longer-term investments look for the best fundamentals. E.g. I’m bullish on Bitcoin and Ethereum because they’ve survived crashes and come back stronger & because of their crazy-huge network effects They are (almost) too big to fail.
— likewise, I’m bullish on ENS domains because they’re an inextricable component of Ethereum. So — unlike the rest of NFT collections — as long as Ethereum stays relevant, ENS domains will be relevant.
ANYTHING CAN FAIL
But why did I say ‘almost’ before? Because even these projects can fail. Any freaking thing can fail. No matter how well established (horse-powered carriages anyone?) — no matter how big their network effects (Altavista, AOL, Myspace anyone?).
So even when you are betting on things with the strongest fundamentals, don’t put all your eggs in those baskets.
DON’T BUY TOPS, BUY BOTTOMS
This is easier said than done because… …NO-FRICKING-BODY can accurately time tops and bottoms (PlanB anyone?) But if you have ‘Don’t FOMO’ as one of your mantras, you’re already better placed than most of the herd investors…
The average investor buys NFT projects or coins when everybody else is doing it, and tries to get out when everyone else is in a panic too. If you train yourself to mistrust the herd’s movements, you’ll begin to develop a flair for profitable entries and profitable exits
FORTUNES ARE MADE WHEN THERE’S BLOOD IN THE STREETS
This mantra is a great synthesis of most of the above and is very relevant to current bearish sentiment If you are always LIQUID and if you are anti-FOMO trained, when a downturn comes, you have the ammo to buy the deep and the mental clarity to see the opportunity beyond your fellow investors’ panic. Nothing is more exciting for a liquid, experienced investor than a crash — all is on sale!
MONEY CAN’T BUY HAPPINESS
But it’s amazing help! It’s so easy to pooh-pooh money when you have lots of it. But let’s not be hypocritical — money is one of the best things in life. We are all here for THA MONEY! We love THA MONEY!
That said if the other pillars of a balanced life (health, love/family/friends, pursuit of intellectual/aesthetic/fitness passions…) if those pillars are missing—then, yes, money is going to be of little use. And health includes mental health. Addiction to substances, food, to gambling, to gaming, etc, could make any of us as miserable as the poorest person in the poorest village in the poorest country. By all means, pursue money—money is great, money is freeing—but pursue all the other pillars too!
By Matt Garcia