ScaredyCatGuide Says - Oh Man, Not This Stuff Again!?
You know, there is a term in the investing world that says don't chase good money after bad. Sometimes, we just can't help ourselves though :-)
Like many others - I bought a little more steem today, roughly 1k.
Oh Man, Not This Again
I still do believe in the long term potential of steem and the returns I can see on my steem dollars. However, if I was to just look at my data history since buying my first bitcoin in early August 2016 there is a clear pattern smacking me in the face.
Bitcoin $$$s rising
Luckily I bought my first bitcoin around the $550 level and some more around $600. That investment has worked out quite well as my bitcoin investment has been positive since day 1 and profitable. Obviously I wish I'd of held all of it but that's not the point here.
Steem $$$s sinking
My Steem investment has been negative since my first purchase (of several) and thus unprofitable.
Do I want to buy more bitcoin at $1100, no not really. The opportunity to add was closer to $800 on the previous pullback. I decided to did not want to add anymore fiat $ to do so. However, I did just buy more steem today using bitcoin as the price sunk even lower.
Add to your winners, cut your losers
This is one of the most mentioned maxims in the trading world and it is for a reason.
So yeah, I'm doing the opposite. Adding to a losing and rather than adding to a winner. In fact I sold some of the winner to buy more of the loser.
Lesson
It doesn't matter whether I'm talking about apple and oranges or steem and bitcoin. The point above is the important part, take the emotion out and look at the facts.
My belief is steem will be worth much more as the platform grows and attains more users, but.....
** That was my last steem purchase until I see a trend reversal and some positive action on the trading tape**
In the meantime I will continue to post, curate and steem on!
Regards,
Thanks for the pic pixabay
These things take time. More and more will find their way to steemit and new features will be added as it goes. I am sure you will be right in this purchase.
Thanks for the kind words my friend. I'm not really worried about it. I would not be a good investor and teacher without sharing lessons when they come about. I am waiting for a change in trend though. My buying program is complete and then some.
You are not alone. They call it trying to catch a falling knife. I did it last week on USDTRY (Turkish Lira). I wrote about that yesterday http://mymark.mx/TIB33 . I just did it too on STEEM. The difference is I sold BTC that I had gained from mining Ethereum (that has been a bit of a falling knife too) and from a Bitcoin faucet I frequent.
Why did I buy STEEM and sell ETH? I believe in the Steemit application (and I see more potential once the community works out how to integrate writing/curating and things like Steemsports) because it is "touch and see" working. For Ethereum, I understand the promise but still looking for the concrete. That is why I mine it and sell it - in due course I can just hold onto what I have mined.
Now for some parallels. One of the things I do actively is averaging down. Provided my fundamental view does not change, I will keep buying something on the way down. In resource stocks (esp exploration) one is facing this all the time. Some of my best winners have come this way. Now the textbook investors tend to disagree - but they also tell us to "buy low and sell high". Averaging down is a way to "buy low"
Yes - generally when I have a buy "program" for an investment I am averaging down as I will layer in to the position.
Feel like I should look into mining coin, seems like I'm leaving money on the table. Faucets look like a way for the average crypto joe to mine, I think.
I think now the psychological round number barrier of 0.1 has been breached that the mood will change to 'bargain bargain' pretty soon. By the calculations that did the other day, the 21 witnesses cannot cover their costs if the price drops under, I think it is 3 cents, maybe it was 5. It's not a price level that can be sustained so if it dips like that it is going to spring off as people race to get the cheap steem.
Solid information. I should have waited a bit longer then :-)
I remember buying bitcoin at $11.xx in mid to late 2012 after a 500%+ rise off of the previous lows in November 2011 and 183x the price I had originally discovered it at. Best move I ever made.