Social Media Has Made Hope the #1 Global Retail Investment Strategy
Unfortunately, hope is an investment strategy that will destroy your portfolio (this post will be made available to free subscribers next week)
As I stated in the above podcast, I noted no less than 6 widely believed falsehoods spread about BTC in the first 24 minutes of the referenced podcast below, about how to get rich from BTC investing. If you can’t identify these 6 falsehoods, then you should not be investing in BTC at all, because had I listened to the full 1hr 41 minutes of the below podcast, consider how many more easily provable BTC lies I likely would have identified? Furthermore, there is no way to properly assess the risk of investing in BTC without being able to spot these 6 easily identifiable BTC lies in the first 24 minutes.
Here is the link to the “Everything You Need to Know About Crypto” podcast for those that want to try to spot the 6 falsehoods about BTC spouted in the first 24 minutes.
Stop Hoping, Start Investing
Besides destroying the mental health and elevating the levels of narcissism among millions of teenagers and adults alike around the word, social media has also destroyed intelligent investing by making hope the #1 investment strategy of retail investors around the world.
Unfortunately, hope is not an investment plan, but simply a gimmick, although an extremely effective one, that separates millions of retail investors from their money every single year as charisma, presence and telling investors what they want to hear versus properly explaining pricing mechanisms of various investment assets, and therefore taking a rigorous approach before spending a single euro, dollar, yen, rmb and telling people, and telling them often, what they don’t want to hear is the pathway to investment success. However, the easy way to riches for financial analysts is to be a fraud and constantly just sell people the hopium they want to hear, even if it leads millions to rags instead of riches. I see this pattern over and over and over again not just in the crypto world, but also in the world of commodity and stock investing as well.
Here are some additional notes I scribbled that I did not discuss in my podcast:
(1) The reason I 100% know that all BTC analysts that give BTC price predictions on their podcasts and/or newsletters for “________ BTC (fill in the blank with whatever absurd price you’ve repeatedly heard in the past) by ______ (fill in the blank with any date 6-months or more into the future)”, are complete frauds is due to the following: the metrics I have used to nail all three bottoms that have resulted in more than 200% returns and to nail the two peaks that resulted in more than 50% price crashes within the past 18-months (delivered on my patreon platform) cannot be used to assess price movements far into the future, and often for not longer than a two-week time frame at most. By nailing the bottoms and tops, I don’t mean I called the exact tops and bottoms, but only that I issued strong buy and strong sell opinions at specific prices, all within a few thousand dollars of the exact bottoms and tops. For example, this past November, I issued a strong sell opinion on BTC at $66,000 (it eventually rose to $69k before crashing) and reiterated multiple times that upside was very slim and downside risk was tremendous.
On the contrary, famous BTC analysts like Dutchman Plan B, stated, the worst case scenario for BTC last year was for BTC to end December 2021 at a price of $135,000. I’m sure thousands of people lost loads of money chasing BTC at its $65,000+ highs in November due to this extremely public announcement of a minimum of a double in the last few weeks of 2021. Another famous BTC analyst, Anthony Pompliano, stated that the BTC price would end 2021 at $100,000. As horrible as these hope-based predictions were, there literally were dozens of additional BTC TikTokers and YouTubers spouting the same, or even worse, nonsense. Thus anytime, you hear a BTC analyst state, “And BTC will be at $100,000 to $500,000 by a (timeline more than two weeks into the future)”, you know they are a complete fraud, which I’m sure a little due diligence into their track record of past BTC price predictions will prove;
(2) The explanation of “BTC has fallen because it is like a tech stock and has mirrored the crash of the NASDAQ index” this year is completely asinine and here’s why. I never looked at the NASDAQ index a single time before I provided my predictions of severe BTC price crashes in April 2021 and November 2021. Furthermore, the fact that the NASDAQ index experienced some stellar trading days higher in recent months when BTC prices continued to fall on these same days proves the comic nature of this explanation. BTC analysts that state the NASDAQ index movements are responsible for BTC’s poor performance this year use that explanation to rationalize their poor predictions, but when the correlation does not hold, such as huge days of divergence in performance, they merely ignore the divergences.
(3) In early June, 40% of all BTC HODLers were reported as being in the red. If further BTC price declines forces selling of some whales, due to momentum selling, this figure could easily climb to 70% by September. This is not a prediction that this will happen, but ignoring this risk and not giving it the proper consideration it deserves is to be expected from the analysts that keep slinging hope as their investment strategy. Not considering all possible outcomes with a proper risk analysis of an asset has led to the death of many a portfolio.
(4) Cathie Wood of ARK investments stated that she would have never invested in Luna because of its asinine algorithmic loop that tied the values of its “volatile” coin TerraUSD to Luna coin (not stable coin TerraUSD, as it was marketed by serial fraudster Kwon Do-hyeung). Ms. Wood stated that having a stablecoin backed by nothing but confidence is stupid and the primary reason why she never would have invested in TerraUSD or Luna coin, basically invalidating her entire thesis for BTC to be priced at $1M in less than eight years. Does she not realize that the entire community of cryptocurrencies, sans a few “hard asset” cryptos, retain their values entirely from confidence, and that a severe drop in confidence in BTC could also cause a Luna like run on BTC prices? Of course, the same could be said of all global fiat currencies in that a loss of confidence in any of them would cause a run in them as well. Historically, global fiat currencies have hyperinflated not just when Central Bankers inflated them into massive inflationary territory, but when people lost all confidence in them (i.e, Venezuelan BVF, the Zimbabwe dollar, the Lebanese pound, etc.)
On 3 June, Cathie Wood stated, “It does appear, according to our metrics, that short-term holders have capitulated. That’s very good news in terms of putting in a bottom. Long-term holders are at an all-time high at 65.7%. That means they’ve been holding Bitcoin for at least a year. We’ve got some very strong holders, or HODLers, here. That’s also very good news, although we might see some long-term holder capitulation to mark the bottom.” Given that a year ago, BTC prices were in the low $30k range, and if we go back even further to the end of 2020, when BTC prices were in the low $20k range, it makes sense that those that are still sitting on small losses or significant gains despite all the in-between massive price volatility, are still holding.
But…what if BTC prices continue to descend to November 2020 prices again, would all those “long-term” holders still HODL or would they flee in masse, causing even further pain to the downside? Furthermore, the fact that so many that rode BTC prices down to large losses this year finally capitulated cannot be used as a predictor of future behavior that has not yet happened (as of 7 June 2022), such as strong buying at BTC prices in the low $30k range in large volume. So until that happens, predicting behavior that has not yet happened is an exercise of very low utility, in my humble opinion, but the hopium dealer analysts keep people perpetually unnecessarily exposed to risk by convincing people to ignore risk. This keeps the views and subscriptions pouring in as they become enriched at the gullible’s expense.
Even if BTC analysts are looking at completely wrong metrics to predict future BTC prices (and from my observations, nearly the entire lot of the most famous analysts are all analyzing the wrong metrics in their attempts to predict future price behavior), when BTC prices dropped 15% last November 2021’s price of $69k to $59k, they should have helped their followers manage risk properly and divest. Why? Because capital preservation is THE key strategy to not only preserving wealth that has been built, but also in building wealth into the future. If you are a patron of mine, you know I harp about capital preservation all the time, and this is the reason why, of the dozens of investment assets I’ve discussed over the past couple years on my platform, the vast majority of them have returned double digit to triple digit returns, and I believe, if memory is serving me correct, not one, of the few investment opportunities I discussed that was closed for a loss based on my selling guidance, was closed at a loss of 15% or greater. Even here on this substack platform, if you’re a new subscriber, review every single investment opportunity I’ve discussed here and you will not find one, for which I’ve given buying and selling opinions, that has lost 15% or more. Analysts that sling hope all the time as their primary investment strategy are complete failures in understanding how to properly assess risk to ensure capital preservation.
Just some other points on which to marinate that were in my notes but I did not discuss in the podcast. Happy marinating, everyone.
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