https://i.imgur.com/Z0aa0jh.jpgCurrent Weightings:
LTC 29.55%
SYS 27.72%
STEEM 19.12%
BTS 14.97%
NLG 5.83%
PIVX 2.78%
BTC .03%
As you can readily appreciate, to the detriment of diversification, I’ve concentrated my holdings quite a bit into 4 main holdings. This is mainly due to my on balance negative expectations for the intermediate term future for crypto in general and my desire to protect the portfolio’s gains as much as possible while also maintaining what I see as A+ investment exposure. I’m only willing to own projects that I consider long term winners and that I would not be troubled to hold should they fall further in price. Likewise, in the current environment that we find ourselves, I don’t want anything to do with anything that has the possibility of being a long term zero. And we just might see some big surprises over the coming months with regards to those long term zero candidates, and others that are currently flying high, that may well too start their long term downtrend towards the lower right of the charts. All in all, I think this is going to be a very dangerous period for Alts in general, very dangerous, and BTC – while not heading towards zero by any means – will probably make mincemeat of many a “trader”. Put more succinctly, I think the highest probability scenario for the coming months (into autumn of 2018) is for a very volatile and choppy market in BTC within a huge range, something like what I’ve outlined in the chart below.
https://i.imgur.com/pyAk7FY.jpgAlts will be doing their thing within that context, and although I expect them to do quite poorly as an aggregate, I also expect a few of the “stars” to do relatively well, hence my four horsemen core position. I will be doing much less portfolio adjustments, with 50% of total portfolio and/or any sudden revaluation of 500% or more being reason for mandatory rebalancing of any of the big 4. PIVX will continue to be traded, and NLG will be a long term hold for the time being and only sold on a 5x or more.
Now, for the mistakes I’ve made these last few months.#1 – The big blunder: not being prepared for this last sell-off.
I’ll let the chart below serve as an introduction:
https://i.imgur.com/daAWdom.jpgIn short, I should have had at least a 15% USDT (or equivalent) position already established on the reaction rally prior to the second break of the trendline, and then another 15% prepared and ready to go. If I had correctly read the situation, I would have sold some SYS at its recent top too. An adequate hedge for this kind of rollover is 30%-45%, and 15% just doesn’t get the job done, but, since I was unprepared and got caught with my pants down, that’s all I had that was ready to go, SYS had already got pounded by 30%, etc., etc., and I was up shit creek without a paddle. Things done right, what was a crappy hedge good for $2,000 should have been something better worth $10,000, and that would have helped to offset losses in a meaningful way, and not just a token trade as it were.
#2 – Overestimating LTC and more than a couple of others.
Should have traded out of LTC first at the .02000000 BTC double top, and second when it was hitting $90 on the cash market. I did neither. $200 is my minimum target before I start selling, and LTC is my “bank”
(the selling to buy other Alts, and buying back when taking other Alts profits did help to give me some price improvement on the overall investment though, but that was luck more than anything). Did the same thing with STEEM: completely overestimated its short term strength and started buying way too high. To a lesser degree I also overestimated BTS, but now I’m nitpicking, as you’ll see below.
#3 – The big gaffe – so big it’s a category all by itself: Never sold any SYS through 2 huge pumps!
This is very similar to #2, but so stark that it needs to be singled out. How can something like this happen? Normal swing trading would have yielded at least a couple of BTC of profits. This kind of thing is unacceptable for a swing trader . . . but SYS is just too good of a long term investment in my opinion to be playing around with shorter term scalps . . . My best example of a short term overestimation.
Okay, it’s not good to just beat up on yourself. You’ve got to be fair and balanced, and that means looking at the other side of the coin and asking what I did right. Obviously, by looking at the chart, I did something right.
Since I ended the negative with SYS, let’s start there with the positive. #3 - My entries with SYS were all impeccable. Out of all of my investments, I got some of the best entries with SYS with a total average cost basis of .00004104 on around 100,000 shares accumulated. The dollar cost averaging of STEEM with fairly good entries as well has given the portfolio around 11,000 STEEM with an average price of .00038036. NLG is also in this category – I have high hopes for NLG – with an average price of .00003294.
#2 – Good overall trading of the general market and very good trading of BTS (where I took out handsome profits at highs) has left me with an average price .00002035 on around 125,000 shares accumulated. Less than average trading of LTC has led to an average price of .01228595 for 375 Litecoins.
#1 Achievement – Excellent trading on equally impressive speculative picks: NXT, XMG, GRS and MCO accounted for more than 75% of all portfolio profits in BTC terms. PIVX trading also contributed positively to global profits with the entire remaining PIVX position having a cost basis of zero. When factoring these profits into the cost basis structure for the portfolio’s current positions (percentages equal to current weightings), their real cost basis now looks like this:
LTC .00447287
SYS .00001824
STEEM .00026881
BTS .00001114
NLG .00001758
PIVX zero in its own right, as mentioned before.
In conclusion, I could have done better (with 20/20 hindsight it’s always easy to say that), but I can’t complain. And hopefully I’ll learn from my mistakes (and also find other like minded people with similar goals to work with since it’s always much more difficult for things to get overlooked the more there are of you who are working together on the project).
No I can’t complain at all. Calculating cost basis is a nice way to prepare yourself for major drawdowns as well as getting an idea for how well you’re doing, but there’s still no better way than simply tracking the bottom line to really see how you’re doing. The weekly update chart just below these lines with BTC and Total Alt Market Cap overlays is a great example: if you’d simply invested $10,000 into either BTC or a basket of all Alts, either one, you’d basically be back to something close to a double. The portfolio is a 6x. Could have been better, it will get better, and I won’t complain.
https://i.imgur.com/StDbgT2.jpgSo as you can see, where there was no attachment, i.e. only speculative trading, there were some very nice gains, but where there were higher longer term expectations for core investments, the story is much more lethargic. I expect that to change, sooner or later, and since I don’t know when, the best I can do is to just hold, treat them as long term investments, and ignore the day to day price fluctuations. The second best thing I can do is to stay away from any kind of speculation in the coming months – it’s better to be out wishing you were in, than in wishing you were out. I think that the easy money has been made this year, that it’s time to protect what we’ve got by staying with our core investments we're ready to marry, and then basically take some time off too (never give in to the urge to try and quickly make up for lost opportunities - that's the fast track to financial ruin).
Just wish I could have said that with 10 grand more in the portfolio, but that brings me back to blunder number one, and we don’t need to rehash that again.
Best wishes to everyone, and let’s keep this moving forward in the positive, with a special focus on reasonable expectations!
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