FreakyThomas on investment baseline for max. anticipated growth

Hey Steemit Community,

first, I'm glad to be able to join this Network, especially being part of this before this goes mainstream. I’m Thomas, 29 years old engineer.

I really appreciate the Idea of that plattform and basically, I did not do any blog writing before that. However, I found this Platform as very interesting to make a starting Point. Please apologize for my -maybe- unusual English skills, it's not my first language since I'm German :-)

I quite did think a lot about investing Money over the past years. I did invest a quite big share in house market and stock exchanges in the past. I always also looked out for private opportunities to invest in. Now, I found myself having the biggest Portion of Money in digital currency’s. This did not come by my Intention, but rather the digital currency value increase made the Situation as it is today. Since this was not really expected to come that fast, I needed to reflect myself and redecide whether I should stay invested the way I'm or maybe Change my strategy and cash out.

So, the Intention of this post should be a Kind of reflection and, don’t get me wrong, I do not think that my thoughts are necessarily the one and only correct thought, but rather I want to share them to get a general Feedback and may be able to assist some People that are right now in front of the same Topic.

So, let’s get in there.

 

Day trading, short term trading vs. Long term investing.

Having raised this question, the answer for me personally is easy. I really prefer to Long term invest rather than try to make some Bugs by day trading or other Kinds of short term trading like News trading etc. Usually the risk for short term trading is bigger, especially if it comes down to digital currency’s which already stand for huge volatility. Topping this by trying to leverage by hopping towards not well studied coins or Tokens that feed a market I have not dealed with is not my ideal procedure. I had to work hard for that Money and I do not risk that amount just by throwing the Money at every big opportunity that turns out to be scam or in one of the better cases just a good idea that does not work out the way it was intended.

If you take Bitcoin as a Long-Term Investment, your Profits could not have been much better as if you would have kept it till today. Same Story for Ethereum and a bunch of other coins. Of cause, you could use marked range to buy and sell a Portion, but I like to stick to my plans and frequently check if my plans are still valid or not by checking News regarding the markets I'm invested in.

 

What possibilities are there to invest in today?

First, you need to find the reason why you basically are investing. Investing „just for money“ is maybe not the best approach, since you maybe would not come along with the required trust in the product that you choose. You are then more in favor of your current balances and it gets ugly if you even keep on bringing your emotions with you, that – based on your purpose of investment – are more in direction of the value in Dollar rather than the value of the products that you are going to buy.

So, if you for example feel, that maybe your employer is not selling you the way he could but rather takes that money for his profits, just buy shares of that company. This applies especially if you are working for a big cooperate organization, but it really comes with a upside, it will even boost your own power at work and by this, it will maybe bring you even in higher ranks within this company as well. So, just jump into that game.

But what if you fear to lose your job because you see some crisis rising soon that just leave the global economy at risk? What if robots are taking your jobs or something like this?

Gold vs. Digital Currency’s

In this case, you just invest regarding this event. In the past, you had to buy physical gold and you would have been on a good track during crisis time. Today this is exactly the role, that digital currencies, especially distributed currencies are good for. No country can shut it down by its own and as better it is in transacting in stealth mode, the better it is for such a kind of event. As of today, its maybe Monaro that gets boosted far, however, every distributed system will grow during this time. That’s my honest opinion.

So, I for example know people, buying gold regardless of the price every couple of weeks to prepare for a certain crash. The down cycles will average the price since these guys buy in steps like every 8 weeks or so, but once a crisis is rising, they are going to invest in different property as stocks or houses. That procedure makes perfectly sense, besides the fact that gold is – somehow – obsolete this days. I would instead buy crypto currencies and crisis will come frequently each couple of yours. That’s proven by history. So, it’s a possible bat that you just need expect, sooner or later.

 

Stocks vs. Digital currencies

Okay, if we considered a market that keeps on growing for a certain time before it bursts, you maybe feel better to put your money towards stocks and you probably are right with it. During the curse of time I expect some regulation issues for digital currencies and the last news regarding SEC announcements are proof of that. But despite these things, we need also to consider the root cause of this regulative issues that just arise. This of course result from greater popularity of digital currencies like bitcoin and other coins/tokens as well. The problem about it is that to many people jump into that but really knowing very little. They just heard that the neighbor at the end of the street made like 200.000 USD with one or the other coin and this is the point where they feel lost and try to recover their back lock by just putting the money in – whatever – shit token. But besides this down phase for digital currencies, this is already part of a growing economical environment and it will maybe have the biggest economical growth ratio in the up and coming years as there are real world applications coming with new technics that are available for the market. I estimate a lot of disruptive potential in the technology itself and it should be not too hard to participate from this development once you try to think the right way.

The only problem about it, is that you need to analyze what coin or token can bring technological advantage over a certain application. There need to be a big advantage and not just another way to execute already available stuff.

So, if a certain token can take out a certain central entity and substitute their profit by a smaller distributed fee, this is most likely considered an advanced system as we do not face technical issues or insecurities by its design as a basic requirement.

If we face a product / coin, that is offering an existing service just realized by blockchain technology, it’s not necessarily an advanced solution. You are using energy from coal, gas, water or nuclear energy and substitute with distributed diesel engine generated electric power and yes – you could. And yes, you do not relay on central system, yes, you do not need to hook yourself up to a central network, but it’s advantages overcome the disadvantages of the distributed solution in this case. Once you change Diesel generators to solar panels, the game may be changes as you need to judge on the entire system.

To cut a long story short, digital currencies and other token based distributed systems are a growing environment and should be seriously taken. Especially since there are too many out there and most of the good ones are undervalued while a lot of the bad ones are overvalued from my perspective right not. So, once we sharpen our views on it, we might be able to allocate our capacity the right ways.

 

Housing market and fiat currency markets

So, to complete my personal view on current global economic condition, we also need to look out towards housing investments and fiat currency interest rates. I may apologize up front, because in this area my view is maybe dominated by German situation and conditions. I also looked out towards Chinese experiences and their point of view, but this was more or less emphasizing the situation that I’ve had in mind but boosted it to a much higher magnitude.

Since interest rates are right now very low, there is a lot of loan for consumer articles. Hosing for own usage is for my understanding also a kind of consumer good rather than any investment. I decided to put it that way, because people are likely to pay more for their own used property than for anything they would rent away for profit. So, due to the interest situation in Germany, there are a bunch of people I know of that invested like 300.000€ for a flat in cities while working for a retail shop as cashier. If you are not too familiar with german incomes, that’s maybe like 3500€ average before tax. Tax and other loads on our income count as ~40%. I personally do not get much more than this while being an engineer but you can consider a cashier as maybe half of this income. Putting this in relation to 300.000€ there is not too much needed to screw the entire landscape of own used housing property up. If the interest rate in Europe just increase a little, it will be a game changer for a lot of people that have been attracted by that lifestyle other have been living before they started to go for their dreams. And it’s basically okay to go for once dreams, but it’s not okay to reject thinking due to others reject thinking (I know, I’m German and there has been some doomed history :D)
Since I thought, that I would just now wait for another view years to unfortunately see some loans bursting a lot of value, I’ve seen my chance there to change my assets slightly towards this market. So, I rejected to buy but rather rent a flat jet and going to even sell my current house to gain some liquidity for this situation to come.

As I told you some lines above, I was speaking to a cooperate colleague from china and we had a chat about German house markets and Chinese house markets. It turned out that he felt like the house market is cheap over here while in china (Shanghai) he felt like more expensive while the rent price is much lower than here in Germany. So, we have been talking to come down to the root cause and it’s just really, really crazy. I never heard something like this before and it really blasted my mind in perspective of what happened in 2008/2008 in US that already put us in global crisis mode.

He has been telling that in china the rental earnings are maybe like half of the Germans earnings or even below that while investment in property is more expensive. His college was adding that its crazy that there are skyscrapers in the suburbs of shanghai and these were just barely rent out to lower than 50% while for the buyers’ market, there are not enough houses available.

To understand this issue, we may need to group Chinese people in rich and poor. While poor cannot afford to much for rental, the rich are going to escape the dropping values from their currencies, the yuan, by buying houses and equity. So, there is a strong demand for buy to escape economic measures to increase growth rates, while others are not able to rent this out. This is not only not very good for the rich share of the population but rather it also creates over capacity in a wide field of the Chinese economics. So, it’s like cancer you cannot beat without hurting yourself at any other point and so the gov. has no real measures. It would be able to escape by stimulating the population growth over decades or by substitute the house building sector by any other growth sector and then just let the overcapacity die, but obviously the Chinese gov. is not yet able to escape from that. If they are not able to survive this, it would be a much bigger impact for my understanding than whatever we have seen in 2008. Considering this, I really think there needs to be a correction and this can easy be a global crisis.

Of cause, there are other areas of the world where somebody could invest in emerging markets, maybe Russia, Ukraine, Syria and maybe soon turkey by the help of forex effects but this is for my understanding not the generic situation that will have global Impact.

Coming back to the global interest rates, there it is very hard to judge. Once it raises significant, there is a high potential of wide spread losses in economic aspects. So, its maybe not very likely to happen or the crisis is going to drill that deep grooves, that we may need to restructure entirely. So, whatever is the result of this thinking, take the available money and put it towards long term attractive investments or maybe leave it where it is and take it later. For me, this question does not matter directly, I take my money I own and I only go for a loan once there is a lucrative investment that goes along with the current economic situation. For everything else, I have my digital currencies and Tokens.

Personal Investment Shares

So, guys, I just like to end with some of my choices that I made and I also will explain on why I did so. I just invested right away like 40% of liquid cash on stock marked. Not only in positive direction, but also short positions using bad devilish derivates at different institutions. I most likely concentrate on situations that are exceptional from historical stand point and my bet is going to normalize this condition over time. British pounds are a example or the current DAX short position on its historical highs.

The other hand, I invested like 60% in digital currencies. The share has been different/lower in the past, but due to the heavy increase, I ended up with that condition and I choose to do not modify a lot because I think we are still on track with digital currency’s and its developments/ roles in our coming future. I started also to put like a couple of USD at every coin, because it took me too much time to investigate all by once, but after a time I reshaped my investment to some heavy weights and left a lot of tiny positions for the others.
Most of my value is shared between BTC, Dash, Sia and Ether (by nature also some steem dollars :D). It would also always be my advice, to do not invest in too many things, as you try to invest into the right things.

For my understanding, Ether is interesting. I do not know where this kind of catastrophes that are going on every day will lead us to, but the technology itself needs to be taken seriously. Looking from that direction, also the IOTA should be considered, but I did not investigate enough on this. For ether, I at bare minimum have written some test contracts to see the system work and understand its potential, while IOTA is a thing I’m going to but didn’t figure out jet enough to make any recommendation.

If it comes to potential and function, Sia seems to be pretty healthy. It has a working product, exceptionally good growths stimulators because of its good design and its quite far developed. There are a lot of bugs and usability needs to improve, but its inherent potential is just great. I put quite the biggest share here, because it seems to be undervalued. Okay, there is right away not too much network load on this system, but once usability is improving, the underlaying technology is great to scale the use cases. Of cause, it still needs some time to resolve mempool issues to be fully able to scale, but it seems to be a vital system by its design. Also, the decision for ASICS is understandable, even if it comes with some risks due to the anticipated development capacities for those devices at Sia.tech.HQ.

If you compare Dash to BTC, its very different. Both seem to have strong points. BTC has a good distribution, has been proven a couple of times, it seems to be robust, but volatile and somehow hostile of its own design. I do not like the Idea, that Dev’s need to depend on miners and users building another party in a decision game. Any currency should serve the people that its meant for, and there is no doubt from my point, this is by design better realized by dash coin, since they keep all the same interest to hold up and distribute the coin. But as I said, it’s hard to compare a not as far distributed alt coin to BTC. So, if not BTC, I Think Dash would be able to come significantly up while it seems to take a breath right now. However, both are deflationary currencies, so I just keep on holding them both while considering the all the other currencies from above as venture capital at higher risk :-D

I did not do detailed technical explanation since I just cannot do so. I just like to review the things from a little above stand point, and at least I stay with my focus on digital currencies, even when maybe the focus of coins can change due to extended knowledge or development in the technical aspects over time. So, since this is what I expect to be the biggest risk for me, you can just feel free to comment on my explicit selection but also on my overall view of the current opportunity’s that are available.

If you like that post, I really look Forward to your Support by upvoting m that article. If not, I really want to understand what different perspective you might have to refocus my view..