I am sure that there were plenty of peeps selling more BTC than they should because they thought that they could outsmart the situation and failing/refusing to adequately prepare for UP.
We have seen it many times in bitcoinlandia, including guys refusing to cooperate with
my hypothetical and to presume for the sake of attempting to work through my hypothetical that the bottom is in.... guys do not want to do it, sometimes.. they just think more bottom is coming blah blah blah.. which sure may or may not end up happening.
Lots of guys believe that there is more bottom coming so either they fail/refuse to buy BTC ongoingly or they sell a little and considering decent odds of buying back, and hopefully they are not playing with margin when they do some of this betting on down when we had already had a decent amount of down, but we know that frequently they get so much confidence that they do that betting with margin too... even though probably the vast majority of us here, we do not tend to play with margin.. at least not too many of us. Gotta be careful with that shit.. even though there are probably smart ways to play it.. but is it worth it, really.. we have such an asymmetrical bet.. why screw it up by fucking around with it and playing with margin?
How do you lose money in a bull market?
I suppose another way to lose money in a bull market is that you cannot believe it is a bull market.. and you fuck around too much trying to take advantage of how much smarter you are - even after the BTC price had already dipped 50%-ish.. rather than continuously stacking and not fucking around too much with taking chances.
Hey don't get me wrong. I am not going to be blaming any guys for having money in reserve for the purpose of buying various potential BTC price drops along the way.. it does not hurt to have some dry powder at all times for such purposes, but they cannot just do one thing.. especially if they have cash ongoingly coming in.. they should be DCA'ing.. ... they should also be buying on a regular basis, especially during dips.. and maybe there are some exemptions for guys who have already reached fuck you status or multiples of fuck you status.... but any guys who are still accumulating BTC or far from fuck you status should be buying fairly regularly.. at a minimum.. especially during such dippening times and without waiting for more dip that may or may not happen.
I guess it all comes down to having a solid bitcoin accumulation plan and executing it.
But if part of that plan is to try and time/game the market then you are guaranteed to go backwards.
Ultimately guys have to figure out their own comfort levels with the BTC accumulation strategies that they deploy, but over the years, I have had so many guys trying to pigeonhole me into their framework in which they want to be right about the preferred strategy is to attempt to time the market and buy on dips, even if you are DCA'ing you should not be doing it on an ongoing basis, and I just have difficulties appreciating those kinds of strategies, especially for newbies. Of course, the longer that you have been in bitcoin, then presumably you have been able to accumulate a bit of a stash, so then in those cases there could be some advantages in trying to be more strategic with your buys, but part of the problem is presuming that the BTC price is going to go down - and actually if we look at bitcoin's historical price charts, we will likely be able to identify that on a daily basis bitcoin has tendencies to go down more than it goes up, but when it ends up going up, there are like less than 20 days in any particular year that you had better have had been in bitcoin on those days because you get punished for not being in....so for me, part of the lesson remains always having a decent amount of stake in BTC that prepares you for UP, even if you might well want to attempt to be strategic regarding buying on dips... So in that regard, for me, on a general basis the primary strategy should be DCA and the secondary strategy of buying on dips can be there to supplement such DCA strategy.
For every 1 person that times it right, i can bet you there is hundreds more than has fallen flat on their face, and how long could they keep this going, before being part of the group that has fallen flat on their face!
That's even more important for newbies to bitcoin... yet even people who have been in bitcoin a long time end up committing the same mistakes of trying to be too strategic in holding off with too much of their fiat stash that they allow to accumulate rather than buying BTC regularly with it.
Instead of taking the newbie as our hypothetical, let's take the person who has already been in bitcoin for a couple of years. Surely there is going to be quite a bit of discretion regarding how to manage the bitcoin portfolio after already being in bitcoin for a couple of years, but a couple of years still might not have been enough time to really get very close to fuck you status, even if coming into bitcoin with an already existing portfolio of investments and a decent amount of cashflow to be able to dedicate towards investing into BTC.
In early 2020, this hypothetical person already decided to get into bitcoin, but was not exactly 100% gungho about bitcoin, so initially when getting into bitcoin, this person was considering just putting 1% of his/her investment portfolio into bitcoin and to establish a proportional DCA'ing into bitcoin that allowed for continued investment into traditional investments and BTC at the same time.
So let's say this hypothetical person had $200k in investments, and also this person had a cashflow that allowed for the setting aside of an additional $1k per month into investments and on average 2 per year comes across an additional $2k per year that can be put into investments.
A really conservative BTC approach causes such person to reallocate 1% into bitcoin, and thereafter maybe DCA with 5% of new cashflow into bitcoin... not totally whimpy.. but not overly aggressive either.
Start of reallocation in January 2020
$198k traditional investments $2k Bitcoin (0.25 BTC at $8k)
Investment over 1st year = $14k ($1k x 12 & $2k x 2)
Invested amount after 1st year (between January 2020 and January 2021)
Traditional investments BTC
$13.3k (95% * $14k) $700 (0.07777 BTC at $9k)
After first year
Traditional investment 10% appreciation
$198k + $13.3k = $211.3k + $21.13 = $232.43k
BTC at about ($30k, so around 3.5x appreciation)
0.25 BTC + 0.07777 BTC = 0.32777 BTC = $9,833
Invested amount = $2,700
Our problem here does end up being a lack of aggressiveness in allocation towards bitcoin rather than the actual approach, and of course, we likely see that either front-loading the BTC investment likely pays off better or there may well need to be a passages of several cycles before really seeing the BTC investment payoff - which of course, I could go through various formulas to even show that someone who has been in bitcoin for less than one cycle (less than 4 years) likely will still need be stacking sats on a regular basis, and perhaps even more aggressively in the 10% to 25% arena rather than in the 1% to 5% arena and not getting so much caught up in terms of trying to time the market... even though there could be some dedication of just buying at various regular points and also saving some of the budget for buying on dips, too.
Should just be focusing on DCA and Ladder buys during these larger dips. 10 years from now, you be kicking yourself because you were trying skimp a few points.
Exactly... and when we get to 8-10 years down the road there might not be really BIG differences in how much stress that you have created for yourself in terms of trying to time the market if you end up missing out.. and it might not matter very much whether in 2015/2016 you were able to buy 10 bitcoins with your $5k budget at an average of $500 each or you were able to actually get lucky (presuming that you could actually figure it out) and get 20 BTC at $250 with that same $5k.... And that is presuming that you could have even come up with $5k rather than DCA investing over several years, so in that regard, you may end up being way better off to have invested $30k over three or four years (let's say between 2015 and 2017) and got 30 BTC, even if those BTC ended up averaging you $1k each.
BTW Jay, i really wish your "Fuck You" status factored in a lambo and lifetime of maintenance/insurance! but then again, that would be a "Fuck You x 4" Status
I supposed if you barely reached fuck you status, that is presuming that you are using a formula that more or less projects you to maintaining your current standards of living.. and maybe even you could have some upgrades just to be at entry level fuck you status. So I am not sure how much higher than entry level fuck you status you would need to be in order to include the cost of keeping a Lambo in there.
I will go along with the seeming presumption that a Lambo is completely new to your lifestyle, and also go along with our presumption of a $2 million BTC accumulation level (using our 208-week moving average - presuming that either BTC is your only investment or that you are reaching $2 million by combining your various investments while still using the 208-week moving average for calculating the value of the BTC portion of your investment portfolio).
Do you really need very much more if you add a lifetime Lambo into your budget? On average, a Lambo could cost anywhere
between $300k and $600k - and maybe average annual maintenance/storage/insurance might cost you less than 10%... so maybe $30k to $40k for maintenance?... Ok... maybe you would need to add an additional $500k to $1 million onto your overall budget.. just to have the cushion.. You cannot just be going around buying Lambos and expecting to maintain them without being able to afford them and make sure that such expense is not eating into your overall principle... so instead of needing 4x fuck you status, I believe you could still add a Lambo by merely amending your fuck you status up by 1.25x to 1.5x... of course, depending on some of the particulars.
We could vary on our assessment of this kind of expense, and surely I am ball-parking the idea. Several times, I have criticized some consumption practices of folks who buy goods/services that they really cannot afford...so surely a lambo is likely one of those things that you have to make sure that you have your various bases covered before entering into such contract... and at the same time, I surely would not want the perfect to become the enemy of the good. We have seen some guys in this here thread asserting that they need like 10x - 20x higher levels of fuck you status just to maintain their standard of living because they are expecting to need to continue to increase their standard of living.. and it just seems a bit ridiculous to me to suggest that you are pricing yourself out of getting into fuck you status because of those kinds of considerations.. because surely if you are able to live within your means.. even when you are already in some level of fuck you status, you are going to be quite likely able to continue to increase your wealth (through passive means - and even the way that you manage your BTC investment and your other investments) - even while it might seem that you are or not engaging in other kinds of active forms of productive work to generate cashflow or to pay for your expenses (health insurance remains a pretty BIG one for peeps - especially in the USA)...
How to lose money in a bull market? By not being in it!
For sure.
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