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Here are my three keys to speculative investing.
I have amassed a small fortune on the side of working using these three concepts. (I previously lost 4 small fortunes learning to apply them). https://twitter.com/baldridgecpa/status/1341743259203334146
I have amassed a small fortune on the side of working using these three concepts. (I previously lost 4 small fortunes learning to apply them). https://twitter.com/baldridgecpa/status/1341743259203334146
1. Durability
Speculative investments have massive up and down moves. The only way you'll realize massive return is to sit through them.
To do this, you MUST KNOW THE SPACE.
You cant fake it.
Speculative investments have massive up and down moves. The only way you'll realize massive return is to sit through them.
To do this, you MUST KNOW THE SPACE.
You cant fake it.
Before any of the speculative investments I made, that I was able to sit through, I had a min of 6 months reading technical literature, and doing first-person analysis.
Currently doing this for the physc medical space.
Currently doing this for the physc medical space.
2. Optionality
IMO, the best time to buy these, initially, is when they drop massively.
Speculators will be afraid and sell, this is your time to buy. I was cash for 1-2 years in each case, just waiting. I did not mind missing out on 10-50% moves. I was waiting for a 30%+
IMO, the best time to buy these, initially, is when they drop massively.
Speculators will be afraid and sell, this is your time to buy. I was cash for 1-2 years in each case, just waiting. I did not mind missing out on 10-50% moves. I was waiting for a 30%+
You feel like you'll miss it, but the big moves are years in the making, not weeks.
So be ok sitting in cash, waiting.
Better to catch the 1 or 2 big moves every 2-3 years, not ride every growth stock or asset class.
So be ok sitting in cash, waiting.
Better to catch the 1 or 2 big moves every 2-3 years, not ride every growth stock or asset class.
3. Asymmetry
The best moves will be asymmetric. If you invest a small amount, your downside will be small compared to the opportunity.
dont risk, initially, large amounts. Here is my playbook for a large move:
The best moves will be asymmetric. If you invest a small amount, your downside will be small compared to the opportunity.
dont risk, initially, large amounts. Here is my playbook for a large move:
1. Shoot for 5-10 years hold time
2. Wait in cash for a massive drop as you study and become knowledgeable and convinced.
3. Deply when price moves down, and public favor is removed
4. Dollar-cost avg after that to slowly accumulate more as the price bottoms (months to years)
2. Wait in cash for a massive drop as you study and become knowledgeable and convinced.
3. Deply when price moves down, and public favor is removed
4. Dollar-cost avg after that to slowly accumulate more as the price bottoms (months to years)
5. When everyone is super excited and feels like a genius sell half. Be ok with missing massive 50-100% moves to the upside after you sell
6. If there is a massive crash, redeploy
7. Continue until the market you identified in step 2 is approx 80% reached.
6. If there is a massive crash, redeploy
7. Continue until the market you identified in step 2 is approx 80% reached.
examples:
My IRA moved to cash due to a job change in early 2019. I deployed March of 2020
Bought $500 of BTC in 2015 and DCA. Sold at 12k, missed major move. redeployed on crash 2017, more 3/20, DCA ever since.
Chinese SaaS in 2015, rode until 2019, sold 1/2 then all.
etc.
My IRA moved to cash due to a job change in early 2019. I deployed March of 2020
Bought $500 of BTC in 2015 and DCA. Sold at 12k, missed major move. redeployed on crash 2017, more 3/20, DCA ever since.
Chinese SaaS in 2015, rode until 2019, sold 1/2 then all.
etc.
Its all about setting yourself up financially and mentally to hold.
1. Know your market
2. Dont risk too much, you can add later and still do well.
3. Realize when its doing better than it should, and get out. be ok with going back if thesis still holds
1. Know your market
2. Dont risk too much, you can add later and still do well.
3. Realize when its doing better than it should, and get out. be ok with going back if thesis still holds
Caveat to this
I was in finance for 5 years, traded for a number of firms, and read over 200 finance books.
I lost 20k multiple times developing the mental fortitude, intellectual curiosity, and risk management muscle.
I am NOT a financial professional and havent been for yrs.
I was in finance for 5 years, traded for a number of firms, and read over 200 finance books.
I lost 20k multiple times developing the mental fortitude, intellectual curiosity, and risk management muscle.
I am NOT a financial professional and havent been for yrs.
Fortune is a term relative to the amount invested. 25k from 500-1000 invested is a small fortune in my book.
