There's also opportunity cost. While something that'll make you profit is not bad, it won't be best if there are better investments (not just pure yield, but also considering the risks).
Yeah definitely the case.
If we consider someone who planned to invest (NOT speculate) in MINING or SELLING then what they should be doing roughly is :
1. Work out a range within which they believe the correct valuation for each lies. That means taking best and worse-scenarios that you believe likely for difficulty and from those calculating a range. How wide that range is depends on the extent to which you prefer EV to variance - if you're risk-averse then the range will be wide. If you don't mind risk at all - provided the EV is good - then a very narrow range can be generated.
2. You then need to consider what alternative investments exist that offer returns you can rely on - as even if it's profitable to invest in MINING or SELLING there may be more profitable alternatives.
3. You can then work out the zones above and below which investment makes sense. The entire range of possible prices for MINING (0 to PURCHASE) would then be split into 5 zones :
1 : 2 : 3 : 4 : 5
Where:
1. Means investing in MINING is your best bet (of the options you considered).
2. Is where investing in MINING is likely profitable - but you have better alternative options.
3. Is where the market is at what you believe is a fair value - meaning no profit or loss and no point holding either of MINING/SELLING as an investment.
4. Is where investing in SELLING is likely profitable (you don't want to touch MINING) - but you have alternative better options.
5. Is where investing in SELLING is your best bet.
TF's point is that a lot of people forget zones 2 and 4 exist. It MAY still be worth investing if the price falls in them - if you already have exposure to the more profitable alternatives and need to diversify.
If you calculate zones 2 and 4 you need to be calculating the return on MINING/SELLING - which isn't quite as simple, unfortunately, as dividing expected profit by amount paid. You need to factor in that a lot of that capital will be returned early on in the investment - so effective capital tied up is a lot less than the nominal initial capital. The precise math depends on your own prediction of future difficulties - as those determine which (of SELLING/MINING) get back what capital and how quickly.
The above only really applies to investment. Speculation/trading is different - and comparisons are generally NOT worth making with investments as speculating, when profitable, generates profit orders of magnitude higher (over time).
In investment you (mainly) make profit from the performance of the securities.
In speculation/trading you (mainly) make profit from the other people in the market.
So when you have idiots investing in crap it's pretty obvious that speculating is the way to go - and that's the bulk of the BTC 'securities' market. I like to think that DMS supports both speculation AND investing - unless the market gets the price exactly right ONE of MINING/SELLING will be a profitable investment.
Remember Profit isn't some binary thing which either exists or doesn't - it has a wide range of potential values, some of which aren't worth touching even when in theory you end up with more than you started with.