The markets in recent years have been crazy enough that I’m seeing a lot of people feel sorry for themselves for missing out on 1000x+ on Bitcoin, Ethereum, ICOs, Gamestop, some DeFi yield farming trend, etc etc.
Sometimes, I get sucked up into the vortex myself and I start to doubt whether I’ve lost my edge in investing.
The latest trend is NFTs – Non-Fungible Tokens. I have no success story to share with NFTs as I think it’s still very early and I don’t understand the long-term play well enough to take a stake. I do think that they’re a very exciting innovation though and am studying the topic deeply.
However, I’m here to say that it’s totally OK to miss out on investing very early in any of these things. The truth of the matter is that the risks of buying into the initial stages of all these projects or trends were extremely high. For every story of riches, there are a thousand others of total ruin.
Don’t get me wrong, I’m not the type of person to dismiss a trend just because I don’t understand it or because it’s the newest thing. But I do like to understand things, and I know by now that I’m pretty good at going over lots of different sources of information and coming up with sensible conclusions about pretty much any topic. So when I feel that I don’t really know why I would invest in something other than the thing in question going up like a hockey stick or people on Twitter boasting about their massive returns, I tend to sit out. Instead of throwing money into the game, I double down on my efforts to understand the subject in order to come to a sensible conclusion.
Usually, this results in entering with an investment position at around the “Series A” or even “Series B” mark. That doesn’t give you 1000 baggers or overnight riches, but it does result in a number of long-term 10x or even 100x results.
Leaving money on the table during the early stages takes away a lot of anxiety and helps me focus on what I’m good at – understanding stuff. And when I do, taking calculated but significant bets on things that might change the world within the next 5-10 years.
And that’s pretty damn fine.
Don’t dismiss the next exciting market without doing your homework, but don’t go all-in on things that are trending but you have no idea about, either.
As in many other areas in life, doing proper research and thinking long-term provides the best holistic results.