Teach Yourself To Be A Contrarian

Hey Jessinvestors

The Bitcoin price continues to surge, taking up headlines and people who held it for ages are celebrating, and they rightly should, take your profits if you'd like to, or hold on for better pricing, it doesn't matter. The only thing that matters to me is the psychological behaviour of people in their masses.

When you become overzealous about one thing, you tend to learn just enough to remain zealous, and it makes you sound like a dumbass. The reason the most educated people don't tend to argue with those zealots is that they know they don't know enough; they have a better understanding of their understanding.

So the uneducated minority will continue to voice their opinions. If you take a look at social media, for example, the people praising Bitcoin at the moment are either.

Influencers who naturally have something to gain in the from the turn in positivity. They gain followers, more views as its a trendy topic, donations and income opportunities, their content becomes more "relevant for the time being"
Small-time hodlers tend to be pretty vocal against as an incentive, the higher the price for them, the more their small investment multiples so naturally they will be vocal.
Mainstream media outlets, why? Because they are click-whores, they need the clicks to generate revenue.

There are more subsets, but I am too lazy to deep dive into those smaller fragments, but you get my point. These media tailwinds, combined with the price narrative, can quickly pull unsophisticated investors into the frenzy.

A section of investors who will most likely be hurt by any drawdown as they try to buy high and sell higher.

Looking for the unloved

Bitcoin has been unloved in my opinion for some time, since the 2017 reversal down to $3000 I've been buying all the way up. I saw the long term trend, plus my motivation to reduce my cost to capital by dollar-cost averaging was motivation enough for me to keep buying.

Now that it has become "loved" I've started to reduce my buying frequency and value, all I am doing now would be ruining the hard work of averaging down by averaging up.

Going against the grain or instead of the gains

Whenever I see people who have no business talking about Bitcoin, speaking about it, whenever I see mainstream news outlets who have no business talking about Bitcoin, talk about it, I get the sense of peak Bitcoin.

If it tends to roll out as a mainstream narrative, I feel it's already too late for me to capture enough upside in it, that would make it worth my while to continue investing.

It's my sign to go and look for something else to purchase, what are people selling to buy into Bitcoin and start to pick that up instead.

The struggle of the bubble

Being a contrarian is extremely hard, having these viewpoints is lonely, which makes it difficult, since you have no one to back you up, so doubt can set in. It brings with it conflict since you're going against what the crowd is doing, or even what you were doing previously, so you face both internal and external battle.

It also means you have to come up with your own conclusions which are tough when we're so used to having our opinions formulated for us by our source of information and then parroting it off like it's our own.

In my mind, trying to be contrarian is all but an impossibility for many, it's not something you can pick up with and run with but something you have to train yourself to do over years.

The benefits of being a contrarian

A contrarian mindset is that of risk management, when you're going against the overarching narrative what you're telling yourself is, either one of two things.

Yes, prices could go higher, but I am not willing to wait for the top so let's get out
Yes prices could go far lower, but I am never going to catch the bottom so let's get in.

So for me, what I've begun to do is heavily reduce my purchasing of Bitcoin, and I've started to take a position in a variety of altcoins. I don't know if it will pay off, but I am relying on market sentiment, unit bias, rumours and news that aren't a front-page story but could possibly be in the future.

Ideally, all I am doing is looking for places to front-run with small amounts of capital, as the initial bag holder once others come in someone needs to make the market for those users, so why not let it be me.

Have your say

What do you good people of HIVE think?

So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."

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