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Topic: Are You The INTELLIGENT Cryptocurrency Investor? - page 7. (Read 1019 times)

full member
Activity: 952
Merit: 104
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No crypto currency investor is intelligent, we are crazy people, doesn't mean we are idiots, there are a lot of smart people among us and there are a lot of idiots as well but when it comes to intelligence and being a crazy person the line is thin. You can call nikola tesla smartest person we know but he was off his brain man, he was a crazy guy who was in love with a pidgeon from his loneliness.

We are kinda like that but not all of us are that smart. Investing into crypto currency is not something an intelligent person would do, intelligent person would invest into something common and obvious like getting stocks of a stable company or something, yeah you can have down moments in that but in the long run 40+ years time you will be rich. Bitcoin and all others are what we do for weird stuff that goes 2000% in a year and drop 90% the next year, we are not in the right set of mind for sure Cheesy.

I like your thoughts about cryptocurrency investors. Yes we are cazy in a way that we are investing our money for a none existent investment. No medium, no real money to circulate but still we are able to grow our money. That's the way we are crazy and not intelligent (lol).
legendary
Activity: 1596
Merit: 1034
Smart people will not invest in cryptocurrency, they may prefer to invest in goods that have been commonly invested such as property, gold, stocks, etc. However, not everyone who invests in cryptocurrency is an idiot because there are many smart people who have started investing in cryptocurrency.
member
Activity: 770
Merit: 12
Trphy.io
the market happens purely from requests and offers here, so there is no intelligence crypto here. prices rise, meaning many investors are willing to buy them, and vice versa
legendary
Activity: 2688
Merit: 1106
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No one in this crypto market is intelligent or brave, because what happens is completely upon the supply to the demand. Even the intelligent trading moves get us into major losses. More we observe the market more will be the opportunity to profit, because it is not like the forex or the shares trading where intelligence give hands.
hero member
Activity: 2842
Merit: 772
I like the term "INTELLIGENT Cryptocurrency Investor", lol.

But I don't know if you find that kind of investors here,  Grin, most of them are noobs who really wanted to get a quick buck, so shall we say, be a millionaire and buy lambo.

I don't know but I guess people gaining experience from Bullish -> Bear market is enough for them to be "smart" and learn a lot of valuable lessons, isn't it?

Anyways, you are offering something for free, so I guess everyone should take part of it and see how you became a noob to a smart investor.  Grin
jr. member
Activity: 36
Merit: 3
Amen mate, amen!
legendary
Activity: 1554
Merit: 1054
No crypto currency investor is intelligent, we are crazy people, doesn't mean we are idiots, there are a lot of smart people among us and there are a lot of idiots as well but when it comes to intelligence and being a crazy person the line is thin. You can call nikola tesla smartest person we know but he was off his brain man, he was a crazy guy who was in love with a pidgeon from his loneliness.

We are kinda like that but not all of us are that smart. Investing into crypto currency is not something an intelligent person would do, intelligent person would invest into something common and obvious like getting stocks of a stable company or something, yeah you can have down moments in that but in the long run 40+ years time you will be rich. Bitcoin and all others are what we do for weird stuff that goes 2000% in a year and drop 90% the next year, we are not in the right set of mind for sure Cheesy.
jr. member
Activity: 36
Merit: 3
If you wish to be an intelligent investor in the cryptocurrency markets, you are about to get your chance. The speculators have gone home, the optimists have packed their bags and the pessimists are running the show.

While we may be lacking in the financial data required to obtain true intrinsic value estimations we now have the opportunity to look for real companies, building the future, expanding their size and generating revenues and profits.

If we assume to know that the current sentiment is negative and that we are likely sitting in the depression stage of the market cycle, we can then compare this list of high-quality companies to the current pricing, stage in the cycle and their past market values to arrive at a value approximation.

If you are enjoying this, you will love the Boss Crypto Trading Academy — I promise. Try it out for free, and see for yourself.

The Intelligent Cryptocurrency Investor

Recently I have been reading “The Intelligent Investor” By Benjamin Graham. I have read a lot of trading and investing books, so it was interesting that I had not read this iconic piece already. There is a wealth of old knowledge in this book that still rings true today. In fact, I have found recently that reading old books, or “classics” often gives you a better summary of the core principles around a topic than the new editions.

Let me set the scene with a quote from the book.

The whole point of investing is not purely to earn more money than average, but to earn enough money to meet your own needs. The best way to measure your investing success is not by whether you are beating the market right now, but whether you have put in a financial plan and a behavioural discipline that are likely to get you to where you want to go. In the end what matters isn’t crossing the finish line before anybody else but making sure that you do cross it.
It’s easy for us to lose focus on this, with the constant feed of price data and news headlines our brains can become completely overwhelmed. Cryptocurrency investing is unique. It involves a much larger degree of speculation than stock market investing because there is a distinct lack of hard, factual and financial data.

This means you need new frameworks for valuation and trading, which is why for cryptocurrency I have leaned towards focussing on the technical analysis of long term trends and market psychology. I believe this is the approach I will be using for a long time yet, as I cannot see a wealth of new data flooding the scene any time soon.

The Intrinsic Value Of A Cryptocurrency
While we cannot accurately speculate on the intrinsic value of a cryptocurrency without insider knowledge of assets, revenues and profits we can evaluate the opinion and beliefs of the market participants. In value investing the first step is to run the numbers and decide what the overall value of the business is by looking at its current net assets, it’s past performance and conservative future revenue earning potential. Yet in cryptocurrency, we do not have this data. What we are left to make our judgments from is past market values and market psychology at that time. Doing this will give us an approximation to the “true market value” (different to the intrinsic value).

For example, if a cryptocurrency has been falling into an area that it held previously on a number of occasions, you can assume that this level was a fair market value for that cryptocurrency. However, what you need to add into this technical calculation, is the emotional state of the market at previous times, and at this current time.

Let’s say that as price approached this specific level, and it then broke down. Did the price break down because of the overall negative market sentiment? Or was it due to more negative market opinions of the individual asset in question? If it was caused by an overall shift in the market sentiment, there is a chance this asset dropped below its true market value due to the manipulation in overall emotions. However, if the price dropped in a time of overall positive market sentiment, it is more likely that there is something specific and different about the asset in question.

Determining The Top Of An Asset Bubble
Now, all of this information is useful to determine the potential bottoms, and the true market value of cryptocurrencies, however, it is most helpful when judging and profiting from the overvaluation of assets.

As we talked about earlier individual cryptocurrencies are highly speculative in nature. Combine this with the fact that the majority of the investors are non-institutional or “average” people we can begin to create a clearer picture. The result is a market environment much like the early years of the stock market. A plethora of new valuation methods are being created, and the market is still dominated by emotion.

To use the terminology of Howard Marks, we see the pendulum of investor psychology swing back and forth, at an incredibly fast speed. What would usually take weeks, months or years, happens in hours and days. This is due to a lack of sophistication, liquidity, and players in the market. One of the main lessons I have learned in cryptocurrency is that what goes up, will almost always come back down.

We can use our framework of fair market value to observe assets that have been pushed up above this level and are likely headed for a retracement. We can also use this framework to inform potential buying opportunities as prices approach fair market valuations.

The Psychology Of An Intelligent Investor
Back in the spring of 1720, Sir Isaac Newton owned shares in the South Sea Company, the hottest stock in England. Sensing that the market was getting out of hand, the great physicist muttered that he “could calculate the motions of the heavenly bodies, but not the madness of the people.” Newton dumped his South Sea shares, pocketing a 100% profit totaling £7,000. But just months later, swept up in the wild enthusiasm of the market, Newton jumped back in at a much higher price — and lost £20,000 (or more than $3 million in today’s money). For the rest of his life, he forbade anyone to speak the words “South Sea” in his presence.
Why is this relevant?

The problem illustrated above is that nobody can predict the top of such bubbles or price increases. In the case of cryptocurrency, prices often take time to return to their fair market value, but they usually do. There are miniature bubbles confined to a handful of assets expanding and popping constantly because nobody believes, or can accurately assess the “intrinsic value” of these cryptocurrencies. There always becomes a price so high, that nobody wants to pay it anymore. Then the news turns negative, sentiment shifts, and the crowd moves from that “hot” asset to the next “hot asset”.

“The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap). The Intelligent Investor is a realist who sells to optimists and buys from pessimists.” — Benjamin Graham
In cryptocurrency, our main role is to assess the cycle of emotions, and how that cycle is correlated to price, and I believe the above quote serves that purpose. In cryptocurrency, the optimists are usually proved wrong, and when the last pessimist falls, those optimists will take control yet again.

If you wish to be an intelligent investor in the cryptocurrency markets, you are about to get your chance. The speculators have gone home, the optimists have packed their bags and the pessimists are running the show. While we may be lacking in the financial data required to obtain true intrinsic value estimations we now have the opportunity to look for real companies, building the future, expanding their size and generating revenues and profits. If we assume to know that the current sentiment is negative and that we are likely sitting in the depression stage of the market cycle, we can then compare this list of high-quality companies to the current pricing, stage in the cycle and their past market values to arrive at a value approximation.

“Investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”


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If you liked this, you will love the Boss Crypto Trading Academy — I promise. Try it out for free, and see for yourself.

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