BUFFETT: Jumping Ship Sometimes More Cost-Effective Than Patching Leaks

This is the third in a series of seven posts discussing famous quotes by investor, Warren Buffett. In today’s post, Buffett talks about not being afraid to accept when you’ve made a bad buy.

SHOULD YOU FIND YOURSELF IN A CHRONICALLY LEAKING BOAT, ENERGY DEVOTED TO CHANGING VESSELS IS LIKELY TO BE MORE PRODUCTIVE THAN ENERGY DEVOTED TO PATCHING LEAKS.

Omgoodness! This is pure truth; and so, transferrable to everyday life, even if you are a non-trader. For example, if you’re in a relationship where you are chronically plugging leaks, for one reason or other, and you’re not married to this person, it might be wise to move on and find a less volatile ‘vessel’.

In essence, that’s what we humans are…mere vessels. We are not indispensable beings. We can be, and most likely will be, traded at some juncture in life, whether personal or in business.

But, since this post is about treasured quotes of a star investor, the same is especially true for crypto trading.

As a newbie, I’m learning that one of the biggest mistakes one can make is developing a fondness for a crypto that’s not loving you back. In simple terms, being a diehard fan isn’t a smart stance to take when investing. It’s a bit like that old 80s tune by Kenny Rogers: Know when to hold ‘em, know when to fold ‘em, know when to walk away; and, in some cases, know when to run!

There’s a common trading rule which is to diversify; don’t put all of your eggs in one basket. Once we HODL to a crypto that’s tanking, or as Buffett alludes, constantly leaking, needing a patch up, it soon makes more sense to cash out a percentage, and put this amount into something more productive.

With Steem, the power down really is a healthy deterrent for newbs. The reason I say this is because the powering down is a 13-week process. For example, if I power down $130., I will receive a mere $10 weekly for the next 13 weeks.

In my case, the deterrent for doing this would be the cost of buying crypto being eaten up in fees. So, until I do a bit more research and set up a spread sheet showing these taxable funds being deposited into my bank account, I will endure when Steem turns into a ‘leaking boat’. I’d rather patch a few leaks for a while, than draw down the minimal amounts, and even worse than fees, just let it set in a low-interest bearing account, when it could otherwise, possibly be bouncing in an uptrend in my Wallet.

So, while I agree with Buffett’s suggestion to jump ship on a buy that’s causing more work than productiveness, I’m glad he said that it is LIKELY a good move to bail. I’m glad he didn’t put it in the definitive; because, some, in fact, all cryptos that I’ve researched have had their highs and lows, ebbs and flows.

Those who jumped ship on the likes of BTC and DASH, because they deemed these as sinking ships, have a few stories of lament to share. So, it’s important to have a keen inner awareness in conjunction with researching a crypto, and, listening to the commentaries of serious investors, whose opinions you value,.

If you believe the crypto is just too futuristic for your purposes, meaning decades before being of any real value, you have to ask yourself, first and foremost, why you made the buy in the first place. This goes back to the first post in the series, where Buffett says he doesn’t buy anything he can’t s envision being of value for the long-term.

This tip is valuable when getting energized to buy into something because everyone else is buying in. That’s risky business; and, oftentimes far more risky than doing your own research, and making your own choices. This is why most people who vlog crypto emphasize doing your own research, as a minimal protection against liability. But, more importantly, it is a call to action to take responsibility for your trading decisions.

I’m currently invested in a share that I went against my inner compass to buy; and, against what most research would recommend. This share has all the characteristics of a leaky boat. It drains my energy when I think about it.
I won’t name it; because, I believe it has long-term value…key phrase…long-term value.

Yes, I bought it for pennies of what it might be worth two decades from now; but, I’m not willing to wait. I knew this when I bought in; and, only until I made myself focus on the numbers, and the volatile charts, that I’ve made peace with the fact, that I will write a date and time on my calendar to just count the loss and sell. It’s low enough that if/when it starts trending upward with consistency, I can still buy in. But, as noted in the last post, numbers matter.

One last comment by Buffett sums it up:

If you got into a bad deal, it's better to count your loss and move on, than to try to force your way into making something from nothing by dropping more resources into a lost cause.

Just as in your personal life; and in business matters, it may not be the easiest of decisions to make; but necessary just the same.

That’s it.

Btw, here’s the link to the full article:

http://www.businessinsider.com/warren-buffett-quotes-investing-advice-2017-9#risk-comes-from-not-knowing-what-youre-doing-1

If you’d like to read more, here are links to the first two posts in the series:

https://steemit.com/blog/@spiritualmatters/fool-ish-investing-tons-of-your-money-when-you-don-t-know-what-you-re-doing

https://steemit.com/life/@spiritualmatters/buffett-the-best-time-to-invest-has-passed

Peace.