(Teddy) Bear Markets as Reality Checks

Did you wake up this morning, like me, to see the value of your crypto portfolio has dropped 10's of %'s? How did it feel?

Selloffs are inevitable in any bull market, and I expect more going forward. You can generally spot the veterans in this space, as they're looking at this as an opportunity to "buy the dip". The newer investors, unfortunately, are often at a negative return on their invested money, and that can be difficult to process if they lack a thorough understanding of what they're buying and why.

Of course, many of the veterans are still holding massive gains, making short term pullbacks a reduction in profits more than a loss of capital. For the ETH hodler who bought in at $35, the difference between $800 and $650 is minute.

Here's the thing: if you're following a long term vision of a particular technology, short term price moves don't matter. Knowing why you own something helps calm you when the bears are bringing the market down, down, down.

On the other hand, those purchases you made on a whim, from a hot tip you heard or because you saw it's price jump yesterday, are very hard to hold onto. Were you making a momentum play that was interrupted? Are you on the wrong side of a crappy technology?

Here's why I don't play momentum: veteran market traders are much, much better at it. I'm going to get creamed. You're going to get creamed. This is a game in which we have no edge.

Hot tips on a new coin's imminent "moon" will impoverish the fool and enrich the clever.

Spotted on r/bitcoin the other day: I bought BTC at $19500, AMA

When it comes to buying a token, spend the time reading and researching it. Find out what the market cap is! Some tokens look "cheap" because their USD value per is very low, but the number of outstanding coins is incredibly high.

If you can't describe to somebody why you're holding a token, it's going to be incredibly difficult to continue holding it in a bear market. It's incredibly easy, on the other hand, to hold when you know a token is a good long term investment because you've studied up and you trust your research.

2017 was an easy year to make money in crypto. 2018 may not be. Can you hodl your tokens if they hover at the same price for 6-12 months without moving?

I have an edge in information about technology that will bring enormous benefits to the population at large. Very few people know about ethereum yet, or steemit, but it seems like these platforms are going to continue to grow and bring value to people's lives. There is a tremendous upside possible, and my knowledge of this gives me an edge that has so far paid very well. I don't have an edge in reading charts, and I don't know anything about a ton of coins like Vertcoin, Iota, or Cardano. That's ok, but then I also don't buy them, because my lack of knowledge is a liability there.

If I haven't made the point clear enough, here it is: only put meaningful money into coins you understand, because when a market pullback comes, you can be secure in your knowledge of why you've bought them, and maybe even buy more. I bought a few coins today that I had been waiting to buy for a while-they had pulled back around 20-25%, which gave me a good opportunity to open up some positions.

The teddy bear doesn't scare me. Don't let it scare you.