Adventures in Capitalism Part 1 of N
I once worked in the marketing department of a large pension fund manager in the City of London. It was a funny place to be at the time - it was the early nineties and we were kind of in recession but not admitting it and interest rates were soaring, we didn't know whether or not we'd be joining the new Euro - all that stuff.
Anyway what I latched onto was wondering what all these people actually did. I knew what we did, but there were many desks on the other side of the office occupied by fund managers. They seemed to sit around looking at screens and chatting about what investments they were making, where the market was going, what things meant. I learned a lot just by eavesdropping on their conversations while I created graphs and visuals to be printed onto acetate and slipped onto an overhead projector in their sales presentations to clients. I could understand when they talked about it a lot better than I understood the slides I was creating!
Anyway, I learned how to read market charts and know when things were likely to go up or down, I learned the difference between a bid and an ask and going long and going short. I heard over and over "Buy low, sell high!" But I never thought I'd actually have enough money to play in any of these markets.
Now it's all changed. I can earn a wee bit of crypto here and put it on an exchange website (we didn't even have the web back then) and buy and sell a range of assets to my heart's content - subject to me not doing anything stupid (well we can hope).
So I did a bit of that over the last 48 hours while bitcoin was falling, falling, falling... I put a little wodge (about $50) into a variety of altcoins at the bottom of the market. To start, I split my pot up equally and then bought coins that had fallen sharply with bitcoin. My reasoning was that the fall wouldn't be about fundamentals just people jumping out of the market altogether or liquidating in order to be able to buy bitcoin low. Then I set sell orders up to cash in a portion of my holding at 5% and 10% increases. After the first 24 hours I was up a few thousand satoshi, but because bitcoin was still falling, I was down dollar-wise. This morning I cleared out having taken some profits and went back in to those that had fallen in the last 24 hours - all new ones because the first lot had mainly recovered as much as looked likely. And now I'm up in satoshi terms and BTC seems to be recovering somewhat so I've made a few $$.
All of which was much more fun than holding bitcoin and feeling your wealth draining away all day :)
Disclaimer: I'm no financial adviser or professional investor of any kind. This post is not advice to do or not do anything in particular, it's just a description of my experience having fun on a cold September day (part of which I spent in my pyjamas).
I'll just say don't gamble anything you can't afford and don't expect to become super rich by doing what I do.
So far as I know, statistics show that day traders have consistently underperformed the market in stocks and bonds over the last 5-6 decades. There are about as many lucky winners as you'd expect in short and medium terms - but by the time you look at any day trader's 30+ year career, they underperformed versus a basic HODL and rebalance strategy.
There are basically two exceptions - Buffet and Peter Lynch - out of tens of thousands of traders. At least that's what William Bernstein says in The Four Pillars of Investing - https://www.goodreads.com/book/show/79351.The_Four_Pillars_of_Investing
I suspect that all of these enthusiastic day traders in crypto are just enjoying massive gains because they're in a market that has gained by thousands of percents in a few years. And then whenever people get lucky, i.e. make a "smart trade", they post about it.
I could be wrong... but IDK. HODL is a great strategy.
Yep, it's a great strategy, but it's not very exciting most of the time. It's all meant to be fun for me.
So this particular game is good for the end of a bear market, when you're pretty sure things are going to go up, just for the short term and you want to milk that movement.
Also HODL doesn't grow the number of bitcoins you have. And that's where the comparisons with Buffett etc fall down. They're seen as successful because they increase the number of dollars they have. I have a HODLers trust that the value of BTC will keep going up and so I'm into increasing my number of bitcoins, knowing that they will be worth more over time.
Anyway, it makes sense to me... and it's enjoyable :)
I did a stint on the dev floor at Reuters at a similar time. Unfortunately did not get the same exposure as you to how it was all used :(
That said, having a Reuters live feed was a revelation about data flow.
That said, I bailed out back into Steem Dollar on the fail and then moved back in just as the market bounced. So managed to spot the bottom perfectly. There is always a bounce on those sorts of move. I don't have much in the market by ETH wise I am up coin wise on what I held before :)
It's just fun, looking out for the top, looking out for the bottom. And always nice to be up :)