Thanks everybody. A lot of good posts, which was the point of the thread.
I agree these are all Vapor Assets and most crash back down but again the formula is for investments not trades. So your looking
for some kind of run similar to BTC from 2009-2014. Obviously selecting the right coin is essential and I dont have a formula for that
just asset allocation.
Topic: A Rational Way to Invest in Alt Coin (Read 1407 times)
Appreciate the time you put into your post, but this isn't the stock market where companies grow over time. These are vaporassets with very little difference between them other than their names. You don't see a coin go up, buy some then buy more if it goes up more - chances are excellent the coin will crash back down a day or 2 later (or hours). You need to take profit quick usually or crash below your entry. This is more like gambling at the racetrack or casino than the stock market, but please let us know how your strategies work.
In Crypto coins world very often price of coin is determined by max coins, difficulty and so on and on.
Also market liquidity - if many people want to sell at the same time how many can sell at new wonderful price?
Imo price increases are nice.
And what is even better that you can put your money in variety of crypto coins and rise above any extra taxes levied by governments - like current import tax in Argentine http://www.bbc.com/news/world-latin-america-25836208
Also market liquidity - if many people want to sell at the same time how many can sell at new wonderful price?
Imo price increases are nice.
And what is even better that you can put your money in variety of crypto coins and rise above any extra taxes levied by governments - like current import tax in Argentine http://www.bbc.com/news/world-latin-america-25836208
If FTC every get to the price i want them sold for i will sure give this method a try!
always good to have a picture over the whole thing and plan ahead
always good to have a picture over the whole thing and plan ahead
Like the insight but the price/coin should really have nothing to do with how you invest. Coins that mint 750 Million will probably never reach $0.10 / each, some of the "rare" coins go for >$100 the day they're launched. Invest instead based on small or large market cap, not the price of the coin.
Well Put thank you for the insight.
Wow...
This is the most sensible thing I have ever seen posted here.
Thanks for the fresh air.
Thanks for the fresh air.
really cool asset allocation idea . thanks
. thanks
As many of you know, or dont know...I am new to the Magic Internet Money game. But I like it. However, after trolling these forums I am sad because I have seen way to many post along the lines of "Hey gonna invest all my money in Battlecoin, expect it to go to 200/Coin by May 1st" or something to that effect. While such a think is fun to dream of its not a rational way to invest. I have worked in finance for 10 years and one thing I hate is to keep seeing the average Joe get his head taken off while the institutions make bank. As far as I can tell 99% of the people here are not: bankers, oligarchs, fat cats, or large financial institutions. So in theory I am actaully pulling for everyone here to make it big. But as adults we all know that will not happen and perhaps 10% of the people here will every make substantial monies in Crypto Currency. To help us all along I thought I would post my thoughts on how to rationally invest. Feel free to use this as you wish, and keep in mind this is a guide for INVESTORS not miners or traders. None of this is a recommendation or solicitation, all Crypto transactions are taken at your own risk (duh).
The Problem and the Potential
Everyone can see the potential of Alt Coins. Obviously being able to buy something at .01 cents and watch it go to even $1 is a very good thing. However, with hundreds of Altcoins out their its kind of hard. We known that every altcoin wont go to the moon but some might. We also know that Altcoin increases will by definition increase or stabilize the value of Bitcoin, since most Altcoins are pegged to Bitcoin as a medium of exchange. If you have enough money you could just buy all altcoins and hope to hit the moon on one. But this is expensive and an inefficient use of your trading power. So instead of a random approach investors might use a formula.
Rise of the Turtles
The most successful investors of all time were the Black Turtles, a shadowy group of investors in teh 1980s who made billions in teh commodity markets. They were so good that in the 1980s they took 25 random poor people off the street, taught them the turtle way and 23 became millionares within 4 years (Trading Places is based on this). How the turtles picked stocks is still secret but their overall strategy is not. Black Turtles would invest in a number of equities on a scaled basis. Funds were devided up amongst asset classes based on potential return, with the most speculative investments being given the least money. At all time 40% of a person money was kept on hot standby to invest in an equity that was doing good. If say Oil went from 5 to say 7 turtles would use their standby cash to buy more oil, if it went to 10 they would buy more and so forth 5 times. I beleive a similar approach may be useful here.
]
Strategy
Everyone who reads this will have a certain amount of money they want to invest in Crypto. Users need to divide this up into regiments.
A sample division is given below, the % can be altered according to your own situation and risk toelerance, but the whole point of this
is avoid investing to much of your money and just hoping the thing will go up.
Cash-----20%
No one knows the future, a popular altcoin could disappear overnight or simply never get going. Another coin might suddenly get tracktion and move up. This is why you have cash reserves. If we see a coin steadily go up over several months jump on it.
Bitcoin/LTC 30%
Bitcoin is right now the market maker. So many altcoins can only be exchanged for these. Moreover, if Altcoins do take off BTC will gain
stability or tracktion. This will be easy as most people who play altcoins have BTC anyway.
Substantial Coins (.50/Coin +) 35%
Many coins currently sell for over a doller. They offer some degree of security but would have to move massive in REAL price. A coin selling for $1 would obviously have to go to 100 for a 100x gain, where as a coin at .01 would only have to move for a dollar. Due to the limited cash flow into Crypto, real price moves will be difficult. But if a Substantial Coin moves it will still go up. Once a Substial Coin is selected buyers should hope for longer term gains of 80%, anything more is great but since you have more invested say 1000 you will still get meaningful gains.
Speculative Coins 10% (.01-.50)
Coins in this range are less "stable" but have more potential. A coin move from .04 to .40 would return 10x to buyers, but the REal price move would be managable for the small market. Once a coin in this tier is selected buyers should look for 800%-1000% gains due to teh fractional nature of the tier. Again anything more is great. You will have less money invested here but the multiplier will catch you up aka $300x10=3K but does not expose you to the same 1000 risked in the above tier.
Magic Happy Elf, Midas Magic Internet Money Coins 5% (Less than a Penny)
We all want to beleive we can buy 200,000 coins for .001 cents and magic dancing elves from Skyrim will take that coin to $60 and make use hyper-wealthy. But we really are not that lucky. Still we can make the money...honey. Most coins in this tier will die. Some may replicate massively so we should take advantage of this. Buyers should look for a %10,000 gain if a coin in this tier takes off. Our $150 could replicate to 15K but if it does not we still have only lost 5% of ur profile.
Anyway thats my thought. I have dedicated some money to coins which of course is factored into my wider plan taht invovle Cash, Stocks, Gold, Bonds, Propety and other worthless fiat money. Use as you wish, or not at all, its your world and its your life.
Reality-Blog.com.........Its Not Random
Book Orders/Tips Use BTC: 13jv8LpiYjY2oAxRbUvVD4havyZt5rQUjJ
The Problem and the Potential
Everyone can see the potential of Alt Coins. Obviously being able to buy something at .01 cents and watch it go to even $1 is a very good thing. However, with hundreds of Altcoins out their its kind of hard. We known that every altcoin wont go to the moon but some might. We also know that Altcoin increases will by definition increase or stabilize the value of Bitcoin, since most Altcoins are pegged to Bitcoin as a medium of exchange. If you have enough money you could just buy all altcoins and hope to hit the moon on one. But this is expensive and an inefficient use of your trading power. So instead of a random approach investors might use a formula.
Rise of the Turtles
The most successful investors of all time were the Black Turtles, a shadowy group of investors in teh 1980s who made billions in teh commodity markets. They were so good that in the 1980s they took 25 random poor people off the street, taught them the turtle way and 23 became millionares within 4 years (Trading Places is based on this). How the turtles picked stocks is still secret but their overall strategy is not. Black Turtles would invest in a number of equities on a scaled basis. Funds were devided up amongst asset classes based on potential return, with the most speculative investments being given the least money. At all time 40% of a person money was kept on hot standby to invest in an equity that was doing good. If say Oil went from 5 to say 7 turtles would use their standby cash to buy more oil, if it went to 10 they would buy more and so forth 5 times. I beleive a similar approach may be useful here.
]
Strategy
Everyone who reads this will have a certain amount of money they want to invest in Crypto. Users need to divide this up into regiments.
A sample division is given below, the % can be altered according to your own situation and risk toelerance, but the whole point of this
is avoid investing to much of your money and just hoping the thing will go up.
Cash-----20%
No one knows the future, a popular altcoin could disappear overnight or simply never get going. Another coin might suddenly get tracktion and move up. This is why you have cash reserves. If we see a coin steadily go up over several months jump on it.
Bitcoin/LTC 30%
Bitcoin is right now the market maker. So many altcoins can only be exchanged for these. Moreover, if Altcoins do take off BTC will gain
stability or tracktion. This will be easy as most people who play altcoins have BTC anyway.
Substantial Coins (.50/Coin +) 35%
Many coins currently sell for over a doller. They offer some degree of security but would have to move massive in REAL price. A coin selling for $1 would obviously have to go to 100 for a 100x gain, where as a coin at .01 would only have to move for a dollar. Due to the limited cash flow into Crypto, real price moves will be difficult. But if a Substantial Coin moves it will still go up. Once a Substial Coin is selected buyers should hope for longer term gains of 80%, anything more is great but since you have more invested say 1000 you will still get meaningful gains.
Speculative Coins 10% (.01-.50)
Coins in this range are less "stable" but have more potential. A coin move from .04 to .40 would return 10x to buyers, but the REal price move would be managable for the small market. Once a coin in this tier is selected buyers should look for 800%-1000% gains due to teh fractional nature of the tier. Again anything more is great. You will have less money invested here but the multiplier will catch you up aka $300x10=3K but does not expose you to the same 1000 risked in the above tier.
Magic Happy Elf, Midas Magic Internet Money Coins 5% (Less than a Penny)
We all want to beleive we can buy 200,000 coins for .001 cents and magic dancing elves from Skyrim will take that coin to $60 and make use hyper-wealthy. But we really are not that lucky. Still we can make the money...honey. Most coins in this tier will die. Some may replicate massively so we should take advantage of this. Buyers should look for a %10,000 gain if a coin in this tier takes off. Our $150 could replicate to 15K but if it does not we still have only lost 5% of ur profile.
Anyway thats my thought. I have dedicated some money to coins which of course is factored into my wider plan taht invovle Cash, Stocks, Gold, Bonds, Propety and other worthless fiat money. Use as you wish, or not at all, its your world and its your life.
Reality-Blog.com.........Its Not Random
Book Orders/Tips Use BTC: 13jv8LpiYjY2oAxRbUvVD4havyZt5rQUjJ
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