Post
Topic
Board Speculation
Re: Buy the DIP, and HODL!
by
JayJuanGee
on 19/02/2024, 00:35:08 UTC
I don't mean to be greedy in taking profits, indeed we have to be realistic but there is no harm in taking big risks for big profits, especially if we only use a small amount of funds to invest.
You are wrong.

There can be great harm from taking profits and continuing to pull out value and failing refusing to continue to invest and/or to let your investment ride, especially something like bitcoin...  and so you think that you are doing great because you keep pulling out your profits, and then when some guys might be receiving 10x to 50x or more in profits after 5-10 years, you might have ended up pulling out relatively low levels of profits and you are still struggling to build up a sufficient nest egg (or investment portfolio).
I understand that all investors have the goal of making a profit and indeed that is their goal of engaging in bitcoin accumulation but seeking or pursuing profits in an unbalanced way is an approach that I think is better avoided, I understand that anyone can get a large amount of profit when they dare to take a large amount of risk, but isn't that the same as completely ruling out the possibility of risk? of course, investing is not that easy and getting the profits they expect will not be as easy as turning the palm of the hand because the possibility of risk cannot always be avoided completely. This is what happens when one only looks at one side of investing, I'm not saying that you shouldn't prioritize profits because after all that's what we're here for but I hope that we don't get too careless when it comes to making decisions unless you've prepared everything thoroughly especially self-acceptance when the situation turns around where losses come your way.

One thing is being in very early BTC accumulation stages, perhaps in the first 1-2 years, but then another thing may well be having had accumulated and having your various other funds in order (that is emergency, reserves and float).

Maybe we could go back to the example of the guy who just started accumulating versus the ones that have been investing a while.

Actually, I just edited my earlier hypotheticals to add hypotheticals 7-15 that go over examples of guys who have shorter investment timelines.  Here is a snip of that post.

For these next Hypos 7-9, we can imagine similar kinds of hypothetical folks with ONLY 2.5 years investing into BTC.

Hypo 7 (2.5-years BTC investor who came into bitcoin already with a decently large investment portfolio)
This person might have invested about a total of $3 million into bitcoin for the last 2.5 years using DCA method, and maybe even lump sum investing at various high price points, so maybe has a $34.9k average cost per BTC, and maybe built up 86 BTC, and so maybe he just plays the waves and feels like he is getting close to having enough BTC, and accomplished most of his DCA , and maybe will still buy some more BTC from time to time when he perceives the BTC price to be low.. such as near or below the 200-week moving average, other than that he might just be maintaining somewhat building his stash.   86 BTC - Around $3 million invested, average cost per BTC $34.9k, valued at around $2.666 million based on 200-WMA and $4.472 million spot price.

Hypo 8.  (2.5-years BTC investor who came into bitcoin already with a medium-sized portfolio)
 Maybe this person was investing $2,000 per week into bitcoin, and invested around 264k into bitcoin and accumulated about 9.1 BTC, and likely this person is not quite feeling as if he has enough BTC.....9.1 BTC - Around $264k invested, average cost per BTC $29k valued at around $282k based on 200-WMA and $473k spot price.

Hypo 9 (2.5-years BTC investor who came into bitcoin without any kind of investment portfolio), and has been investing $100 per week into bitcoin, and maybe invested around $13k into BTC and accumulated nearly 0.5 BTC.  This person still is considering that he is quite far from having enough BTC, even though he feels pretty comfortable about his investment to date including that he has built up his emergency fund, his reserves and his float, yet he is thinking that he might need to DCA into bitcoin for another 5-10 more years before he starts to feel comfortable, and maybe he is going to need to increase the quantity of his weekly DCA by either increasing income and/or cutting expenses... and he is thinking that he might be able to bring his DCA amount up to $200 or $400 per week and maybe get another 2 or 3 BTC in the next 10 to 15 years or so.  0.5 BTC - Around $13k invested, average cost per BTC $26k valued at around $15,500 based on 200-WMA and $26k spot price.

For these next Hypos 10-12, we can imagine similar kinds of hypothetical folks with ONLY 1.25 years investing into BTC.

Hypo 10 (1.25-years BTC investor who came into bitcoin already with a decently large investment portfolio)
This person might have invested about a total of $2 million into bitcoin for the last 1.25 years using DCA method, and maybe even lump sum investing at various high price points, so maybe has a $25.6k average cost per BTC, and maybe built up 78 BTC, and so maybe he just continues to DCA for a while and perhaps considers starting to play the waves and feels like he continues to need to build his BTC stash size through DCA and maybe even some lump summing and buying on dips.. such as near or below the 200-week moving average, other than that he may well just be maintaining and building his stash.   78 BTC - Around $2 million invested, average cost per BTC $25.6k, valued at around $2.418 million based on 200-WMA and $4.056 million spot price.

Hypo 11.  (1.25-years BTC investor who came into bitcoin already with a medium-sized portfolio)
 Maybe this person was investing $2,500 per week into bitcoin, and invested around 165k into bitcoin and accumulated about 6.2 BTC, and likely this person is not quite feeling as if he has enough BTC.....6.2 BTC - Around $165k invested, average cost per BTC $26.6k valued at around $192.2k based on 200-WMA and $322.4k spot price.

Hypo 12 (1.25-years BTC investor who came into bitcoin without any kind of investment portfolio), and has been investing $100 per week into bitcoin, and maybe invested around $6.6k into BTC and accumulated nearly 0.25 BTC.  This person still is considering that he is quite far from having enough BTC, even though he feels pretty comfortable about his investment to date including that he is making progress towards building up a solid emergency fund, reserves and float, yet he is thinking that he might need to DCA into bitcoin for another 5-10 more years before he starts to feel comfortable, and maybe he is going to need to increase the quantity of his weekly DCA by either increasing income and/or cutting expenses... and he is thinking that he might be able to bring his DCA amount up to $200 or $400 per week and maybe get another 2 or 3 BTC in the next 10 to 15 years or so.  0.25 BTC - Around $6.6k invested, average cost per BTC $26.4k valued at around $7,750 based on 200-WMA and $13k spot price.

For these next Hypos 13-15, we can imagine similar kinds of hypothetical folks who are pretty much newbies in their investing into BTC.. so they are trying to figure out their attack plan in order to accumulate BTC in the coming 4 years or so.

Hypo 13 (newbie BTC investor who came into bitcoin already with a decently large investment portfolio)
We would assume this person already has various investments and a somewhat diversified portfolio and of course an emergency fund, reserves and float.  He could be aiming anywhere between 5% and 25% allocation into bitcoin, but he might want to take anywhere between 6 months and 24 months to reach his allocation and to think about these kinds of matters as he is going.  He might have a lump sum that he has already authorized of around $1.6 million and an anticipated income of around $800k for the next 6 months, so therefore his total budget is $2.4 million for the next 6 months.  He may well decide to dedicate 1/3 to lump sum, 1/3 to buying on dips and 1/3 to DCA.

Hypo 14.  (newbie BTC investor who came into bitcoin already with a medium-sized portfolio)
 Maybe this person does not have any lump sum that he is able to invest, but his finances are in pretty good order in terms of his emergency fund, reserves and his float, and he considers that he can invest right around $4k per month or $1k per week into BTC, and if he has time he can try to time his DCA investing so that he can take advantage of the dips... which is around 15% of his discretionary income yet he is thinking that it could take him 10-15 years or more to reach his investment targets.. yet he will keep investing into bitcoin at about $1k per week and maybe from time to time if he gets extra cashflow or he is able to decrease his expenses, he might invest more into BTC, but he is going to play it by ear with a decently aggressive DCA approach and reassess from time to time with the passage of time.

Hypo 15 (newbie BTC investor who came into bitcoin without any kind of investment portfolio), Maybe this person has to assess his budget and to build his cash reserves, his emergency fund and his float.  He may also need to pay off some of his debts so that his cashflow is stronger.  He is considering to start out by investing around $10 per week and working his way up to $100 per week in the next 3-6 months while he gets his finances in order, including assessing various aspects of his finances and psychology... He figures that after about 1 year he should have his more egregious debts paid off, and he might be able to build his emergency fund at the same time as he is investing into BTC.. with an expectation of potentially increasing his weekly investment into BTC beyond $100 per week, but that might take a year or two. and he will reassess at various points along the way.  

On the other hand I agree with your statement @JJG where you are more directing someone's mindset to look at the long term which is actually more profitable than doing something they think is "right" like cashing out quickly, this is an investment where the future is what we see and we make the main goal in planning the accumulation of bitcoin that we do, I don't blame them but certainly with an approach like that it is clear that there will be a slight delay in profits when they withdraw too often while others maintain and they will see a significant difference in the amount of profit in the next 5 - 10 years and you can see which one is more profitable.

I think that my hypotheticals show that it takes a long time to both build up an investment portfolio, and also to be in a position to reap the benefit of time and compounding of value.