I've gotten sick of this phrase "Don't invest more than what you can afford to loose". I followed the breadcrumbs of this ridiculous statement to Dr. Phil and here is what I consider an appalling video to look at: http://www.oprah.com/oprahs-lifeclass/dr-phil-never-invest-more-than-you-can-afford-to-lose-video
It's actually given as a life advise and I don't know what kind of -excuse my french- cucks and pussies they have in their target audience. But I'm seeing this advise popping up all over the cryptocurrency/blockchain investment scene. I'm seeing many financial newsletter writers from groups like Palm Beach Group, Stansberry-Churchhouse and James Altucher who had lost it all multiple times and one of his much promoted investing techniques (1000% Backdoor) was simply piggybacking on other successful investors using his "Network" he has built up. All these people who have multiple newsletter worth tens of thousands of dollars per year per person promotes Cryptocurrencies and always mentions how you shouldn't invest more than what you can afford to loose.
But they ask you to buy the $3000 newsletter which would save you about 300 hours on steemit and few other sites.
I'll let that sink in and invite you to read my last week's article You are the Elites: Financial Newsletter review and how you are secretly smarter than veterans + My outrageous prediction and Why Bitcoin will never be P2P Electronic Cash
Now let me show you that the title wasn't click bait by convincing you that unless you buy Berkshire Hathaway or something similar, you are better off letting a monkey pick your investments for you. Before jumping right into the monkey, allow me to show you how people never learn by traveling to 1998 and picking up the Wall Street Journal which non-savvy investors read to make them look like they know a thing or two about investing.
Economist Burton Malkiel said “a blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.” Since real investors don't bother with WSJ anyways and for the sake of selling more copies to the mainstream they ran an experiment.
On October 7, 1998 the Journal presented the results of the 100th dartboard contest. So who won the most contests and by how much? The pros won 61 of the 100 contests versus the darts. That’s better than the 50% that would be expected in an efficient market. On the other hand, the pros losing 39% of the time to a bunch of darts certainly could be viewed as somewhat of an embarrassment for the pros. Additionally, the performance of the pros versus the Dow Jones Industrial Average was less impressive. The pros barely edged the DJIA by a margin of 51 to 49 contests. In other words, simply investing passively in the Dow, an investor would have beaten the picks of the pros in roughly half the contests (that is, without even considering transactions costs or taxes for taxable investors).
Despite all the revelations by WSJ, people still count on hedge fund managers to make them money. These banksters and wall street guys can't produce the gains of a 10min bull run of a crypto in an entire year. Being in the market isn't just about being in it for the year. You've got to think long term and use the market to invest to build yourself a better life. So..... here goes some additional age old info about the well educated Keynesian schmucks.
- The Announcement Effect: by announcing the stocks to the entire audience of the WSJ, it will artificially inflate the returns (in fact, abnormal gains for the first 2 days after publication scaled back between 15 and 25 days later).
- Pros picked riskier stocks: Case Western Reserve University professor Bing Liang says that, adjusted for risk, the pros’ would have lost 3.8% on the market over the six-month period.
- The Dartboard stocks continued to do well: After the contest ended, the dart stocks continued to perform, while the pros’ picks fell from their initial highs after publication.
Too bad I was quick to do the standing ovation. I started my trading life on August 1st with a bold contrarian investment that tripled my portfolio. After going through many crashes and drama and massive volatility I really cringe when the mainstream investors talk about risk and balancing portfolios. Lots of people who talk in favor of hedge funds claims that those funds are “managing risk”. The facts say that their "management" is as good as a managed economy of communists who make the land go barren like a grim reaper for all thing good on this Earth.
A few years back a study conducted on behalf of the endowment of Cambridge University’s Clare College found that, historically, the best risk-managed simple portfolio for a long-term investor had usually been a balance of 80% stocks and 20% cash (or equivalent, such as Treasury bills), rebalanced once a year.You can play around with simple portfolios but this will do as well as any. It’s about as simple as you can get.Someone who put 20% of their money in a federally insured bank savings account, and the other 80% in a random collection of stocks from around the world, picked by monkeys, would be up about 6.2% so far this year. (And that’s assuming for the sake of simplicity that you earned 0% interest on the savings. In reality, you could have done slightly better)
In other words, they would still have earned more than twice the returns of the average hedge fund.
I'm exclusively investing in cryptos. I have no first hand experience regarding these PhD ridden hedge funds. I've come to know that the norm is 2% of the assets as a basic fee and 20% of profits (If they managed to actually make a buck) I've heard about worse cases of charging 25% of profits. If the funds are doubling your money each year (which is possible in a week or even few hours with cryptos) I won't object to even a 30% fee.
But these guys are charging you 2% or more plus 20% or more from the profits to employ a bunch of College kids and Wannabe investment legends while 20% money in a bank and 80% invested in a randomly picked stocks will get you upto 4 times better returns.
You read that right. Sometimes monkeys beat the College Graduates by 3 or even almost 4 times when it comes to making money
So why should you go and preach about blockchain, how it's going to change the world as we know it and say Don't invest more than what you can afford to loose as if all cryptos were just BitConnect forks???
I sincerely ask my fellow investors to grow some sensibility and a functioning spinal cord and say things as they actually are. Take a look at the following fellow who got a 150 year sentence for running BitConnect Bernard L. Madoff Investment Securities LLC on top of being the former non-executive chairman of the NASDAQ stock market.
He is going to come out of jail November 14th, 2139 after commiting a $64.8 Billion fraud. General Motors went bankrupt in 2008 along with Lehman Brothers, Chrysler, Fannie Mae, Freddie Mac and Enron which these ono-monkeys had valued at ~65,000,000,000 USD at the time of chapter 11 bankruptcy.
I've tried some stock simulators and one things I've confirmed is that focusing on trends can give you excellent returns (like 50%+ in 6weeks trading stocks). You can pick a small but growing sector that is really important and make a lot of money investing. I see great potential in Miners (both precious metals and copper), solar energy and cyber security. I love cryptos so much and I don't plan to trade stocks. But I know good signs when I see them.
Multi-Billion Dollar Blue chip stocks that has been around for generations can and will go bankrupt. So why does everyone consider S&P 500 safe and go around putting warnings when they talk about or downright recommend a cryptocurrency on a premium newsletter or YouTube or even some Blockchain preaching website as if this is some gamble?
If you have a brain to think, the only gamble is how much % gains you are going to get. That's the uncertain part. You can check market histories over centuries and figure out that even the bad picks have great gains at the right time in the right sector. This is the time where blockchain is getting hot. I've seen 150% gains in 2 days with mining stocks. When yo see those returns and get out of the position, you'll be safe...... and rich.
A non-executive chairman of the NASDAQ turned out be be a scammer. But with transparency of blockchain, frauds mainly happen when investors make stupid decisions. Crytpos give the reruns as good as or even better that OTC stocks while having high liquidity and potential to become very important. You don't have to HODL. You can get out after a quick spike and move onto another thing.
In a world where monkeys can invest better than pros, you'd have to be dumber than a monkey to loose your investment in cryptos (unless it was stolen).
Always do your research and don't act like you are investing in a ponzi while the risk to reward ratio is sky high compared to Blue chip stocks or even OTC. The only way your account is going to zero is from a bad margin call or a theft.
Be proud about what you are engaged in. Be proud that you are a pioneer. Spread the word and tell people to act knowing that the good projects will take over the scam ridden NASDAQ and non-transparent Blue chips that are on bed with the 3 letter agencies. Don't repeat the words of people who can't beat a monkey at trading.
