What is my overall investment strategy?
It's simply to get the most value per dollar spent. Represented as the ratio between value (V) over E. In other words E is expense which is how much cost you put into something and V is the amount of value you can potentially get out of it.
How does this apply to the stock market? There are many formulas which can give us the fair value of a stock such as Ben Graham's below:
V = E A R N I N G S × ( 8.5 + 2 g )
V = Value.
Earnings = Trailing Twelve Months Earnings
8.5 = P/E base for a no-growth company
g = reasonably expected 7 to 10 year growth rate
I may choose one, or none, or I may choose all but I do my best to apply known methods to quantify the value of an investment.
The trick to investing so far is simply to discover value prior to other people and put as much money into undervalued investment opportunities as one can afford to lose. If one knows the formulas to use to discover the value of a stock (alternative to Ben Graham's formula is Acquirer’s Multiple) then one can create a spread sheet which automatically screens your stocks by that formula.
And then one can simply filter opportunities using these value estimation formulas until the opportunities are narrowed down. It is not gambling and it works for cryptocurrency like Bitcoin, it works for stocks, it works for anything which one must to put money in and expect something of value in return.
The better the ratio I have of value/dollar the better I can feel about my investment decisions. Speculation is a different ballgame entirely and is more like gambling while investing is more about discovering value. How could this apply to cryptocurrency? If one can figure out which projects have the most value to offer and invest in those then the value to dollar number is higher and that is winning the value game. The difficult thing about crypto is unless one can read code, unless one understands cryptography, unless one really understands the psychology of people (the masses) and trends then one will have a difficult time assessing the value of a crypto token.
This is what I call an economist survival instinct. I’ve always tried to adopt this system and it’s been quite tasking but in the real sense it isn’t. Value for every penny spent must be equivalent to the expense and with this one will definitely add more value to oneself
For an aspired successful business personnel, making most value outta every investment defines success. I totally agree with the conclusion about crypto investment is all about finding the right value to invest in. Thanks for the enlightenment, great investment plan I must say
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Sounds like you should be looking into low market cap cryptos, many of which are ridiculously cheap right now.
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Important is potential for growth. Can it go mainstream? Can it scale? It may provide value but if it can't grow it cannot be sustainable. You also have to analyze the business model but this is hard to do in crypto. In stocks you can determine if a company has good management but in crypto often a project is stacked with people who have impressive titles (in other industries) but who have limited experience in cryptocurrency.
So what you really have to look at is the community and brain power behind different projects. That is hard to do unless you communicate with the developers directly and the thought leaders of that community directly. If you know that a project is surrounded by very smart motivated determined people who know how to change their minds to promote the success of the project then you can have some evidence to think they'll make whatever changes they have to in order to protect the project and community it supports.
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Much of it can be determined indirectly. Look at how they market themselves. Look at the whitepaper - not what they say, but rather at the level of detail, the amount of bullshit vs real info, the grammar and spelling, the level of technical knowledge and business knowledge. The token economics is vital as is the necessity for blockchain tech (and various other things). Adoption chances have to be an educated guess. I'm in a ton of them, some obviously better than others, but all selected along the lines of such criteria.
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This is not a criticism of your strategy, in the slightest.
Any investment into an outcome that is unknown, is gambling , by definition.
I'm not being critical of gambling either, btw! lol - Just pointing it out.
Some people are unaware that they are gambling, ( no matter the odds in your favor)...which is not good...People do need to understand the difference, is all.
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If that is the thresh hold (risk taking) then everything has some level of risk and could be considered gambling. The point I make is there are methods to minimize and even calculate the level of risk in an investment. From that you can differentiate and amplify.
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