Given my above average understanding of what bitcoin and cryptocurrency is and what trading characteristic they have and what blockchain do for the future, I am fairly confidence in the development of this digital asset market.
Ever since I started trading traditional securities, I always go for long term due to the influence of “deep value” investing by benjamin graham and warren buffet. Therefore, I have a set of internal rules, restriction and discipline that i follow for my investment strategy.
Investment Rules
short selling cryptocurrency is like a VC decided to short sell a startup right after they pitched them. Cryptocurrency is extremely risky, statistically speaking, and it is definitely should not be traded like a fiat currency. I will expand my view of this subject later.
In may 2017, the cryptocurrency market is in a crazy bull market. All speculators, short-term profit driven, no trading experience individuals, kitchen chief, farmers, cleaners got into the market to catch the waves. Start to see themselves as a “pro”, because they are making money. (only retard would lost money during May 2017 boom). People start taking on more risk by margin trading. Given cryptocurrency is already inherently risky, addition to margin trade, it is now riskier than playing russian roulette with fully loaded pistol. On 21 of june 2017, GDAX ethereum flash crash, trading eth at 3 cents, causing many liquidation on overly leveraged trader. Here thats for margin trading.
Afterall, margin trade goes against my long term investment strategy as it will accumulate interest.
My portfolio would never consider any ICO, unless they have matured for a certain period of time and have proved themselve worthiness and their technology is well developed.
ICO is just getting more and more ridiculous. Some ICO are not even build on blockchain technology and some ICO dont even bother writing white paper. To summarize, Warren buffet dont make money by trading penny stock.
Some ICO i would consider are, Golem, EOS, IOTA etc. because they are well backed by significant developers, very active community and good fundamentals. I will expand how I research cryptocurrency and look at their fundamentals in the future.
Investment Strategy: Global Macro
Global Macro is a strategy used by hedge fund to hold various securities by long position or short position, primarily based on the overall economic or political views of the securities.
My strategy does not hold short position, but it is primarily trading on the macro economy of the cryptocurrency market as well as the fundamentals.
Investors cannot control the market or the volatility, but we can control the cost of investment and the allocation and horizon. Long term passive investment have consistently beat active managed hedge fund due to its cost advantage and lack of fund manager stock selection risk.(vanguard did a study on that).
My strategy will keep cost low by minimizing buying and selling and optimize asset allocation based on fundamentals and modern portfolio theory (MPT).
My strategy is very simple “Invest in really good cryptocurrencies for a really long time”
My next topic will go into details on how i construct my portfolio.
Disclaimer: i am not a professional investor. all information are not investment advise. please seek professional investment adviser for your investment decision.
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