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Tribalism in investing - Blinded by the light

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@silverstackeruk
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Good day everyone, today we are going to look at tribalism and how when mixed with investing, nasty results can follow but not always. Humans are tribal by nature, its build into us on instinct we feel better in larger groups. We see tribalism in everyday life with sports, political parties, food movements like being vegan and who our friends our. You dont see billionaires hanging around with crack heads, in the same way, someone that is from a gang would not be seen dead with a rival gang member. They would kill that person just for being part of the rival gang without knowing anything else about that person. Tribalism is everywhere and it's in investing as well.

Being from Northern Ireland it is very normal for me that every town/city in the country is split into 2 halves, 1 half for Protestant and 1 half for Catholics. Each half will have its own School at all levels, recreational areas, food takeaway, etc. Like in the town I have lived in all my life, I have seen maybe 60% of it because there are parts I will/can not go. Fighting takes place where each side meets but we dont know the people we are fighting, we only know they come from the other side of town and it's not personal. The same thing can happen in investing with people blindly investing into things just to be part of something. Sometimes it can go good, BTC for example but mostly it'll lose alot of people money.

We are all aware of the recent Reddit wallstreets group that helped to inflate the price of GameStop by over 3000%. This was tribalistic investing at it's worst. We had people that had never bought a share before paying $200-300 for a useless stock because they felt they were fighting the man. The news spreads like wildfire and the revolution grew in numbers. People felt everyone was going to hold they were part of something that was going to destroy wall street and funds but they never questioned, who is selling them the shares they are buying.

A few people made money from this but mostly the ones that started the pump and dump in the first place. GameStop higher-ups and big shareholders never sold any shares due to the fear of being accessed from being part of a pump and dump by regulators. All the shares being sold were by the Reddit group members that started it all. They went after silver next but had little impact on the price, they did help FOMO people to wipe out bullion website stocks for a few weeks and as a silver stacker, I see nothing wrong with this attempted pump and dump. Oh yes, I am subjectively offended. If that offends you, im offended and we can circle all day.

With investing, tribalism can be very dangerous. When tribalism impacts your thinking, you lose the ability to think independently and you'll blindly let others manipulate you into thinking you're on the winning side and everyone else is wrong are missing out.

A great example of tribal investing is Tesla. There is currently a verbal war taking place over the internet between Tesla bulls and market bears. This will happen in other stocks but not like Tesla that has subreddits, YouTubers and editors from news articles all fighting their side of the war. Each side will only engage with others that agree with their opinions. If you are a Telsa bull you will only read positive content about Telsa. You will join groups that are full of people that confirm being a bull is right. They blow up the smallest piece of news and put a positive spin on bad news. "Oh, Telsa is down 20% this week. Great news, buy the dip". The same will apply to Tesla bears.

The same news will be interpreted by both bulls and bears differently to work as a positive for there cases. As an example, Telsa releases news that Model 3 production has doubled but model X models production is down 50%. Bulls will talk about Telsa putting out twice as many Model 3's and bears will attach to Model X production numbers being cut in half resulting in less revenue. Same news but depending on which tribe you are part of, you only focus, see content and talk about half of the information. You only focus on the positive for your tribe and this were lots of people get lost.

Not saying Telsa is not a great company. When Bitcoin moons proper, it's no Lambo for me, I'll join the Tesla gang and go green. But it's earnings dont justify its current stock price. The same goes for a lot of the biggest companies, just used Telsa as an example because it's been running hot, hot, hot. Elon Musk and his millions of fans have been pushing the price of his stock up after they watch some youtube video and get pumped for it, read some news article are speaking with some friends that or making a killing on their holdings. You know, when a group of investors heard Elon was sleeping on a sofa in the factory, they clubbed together and bought the billionaire a fold-down sofa. That's loyalty and basically an offering to their god. I love Elon Musk personally, he looks to be a fascinating person. I'd love to share a joint are 2 while asking him super deep questions to pick his brain.

The same will happen in all investment classes and crypto is no different. We are all aware of the Bitcoin Cash hard fork that took place in 2017. This was the result of the Bitcoin community being split into 2 groups. 1 group remained with BTC core (BTC) and the other group forked BTC cash (BCH). Both BTC and BCH have ultra-loyal communities that to this day still fight and belittle the other side. No matter who is right and wrong, BTC is up 250% from its 2017 peak and BCH is -85% it's 2017 peak yet the BCH community will never call it quits, they feel they are stronger than ever and BCH will moon any day. They will continue to promote and think BCH is better and when Bitcoin cash is completely irrelevant and falls out of the top 200 they will lose all their money and blame someone else for not seeing they were on a sinking ship from day 1. You cant change someone believes sadly with reasonable thinking and sound evidence.

We've all since tribalism closer to home with HIVE being hard forked from STEEM. When JS first took over the top 20 witnesses and started to play with the blockchain, how quick did the STEEM community get all our witness's voted to stop him? That was an attack on our community because up until JS bought STEEM, it was our community and we all joined t by powering down and sold all their STEEM to buy HIVE? Together to protect that. HIVE was hard forked and now STEEM which once we all loved and worked so hard to obtain has become the enemy.

How many blindly showed support by powering downing all their STEEM and converting it to HIVE to show their loyalty? How has that worked out for those people as STEEM is worth more and SP is paying out an ROI of around 40%. I understand some will say its not about money but then you're defending it and we all know HIVE/STEEM would not work if people were not rewarded for producing content so it kinda is all about the money. If it's not about the money set all your post rewards to @null. The point is many people picked a side and because they did they lost money never mind the ethics of the whole thing.

All im saying is when your investing and interacting with people, make sure to look at both sides of the story. Dont invest are FOMO into projects based on others actions are weak information. Take a step back and look at from an outsiders point of view. I spoke about the BCH community above, inside that community they are strong, they see BCH is the better coin without a question while the rest of the world outside that bubble see them as a small niche community that will have no impact. Hundreds of crypto tokens exist we dont even know about with thousands of die-hard fans and groups/investors in each one. It is easy to get excited and sucked into the idea's when you only see the positive. Just remember, if someone is telling you something is a good investment or things are happening with this are that project/crypto, there is a very high chance that person has invested into that project/crypto themselves and even if they think they are giving you sound advice, they have an unconscious incentive.

So, stay safe out there folks. It's a bullrun year and lots of people will be trying to get you to convert your precious BTC, ETH & HIVE into shitcoins that promise the world. Do not get sucked into picking sides and if you ever find yourself defending an investment, chances are it's too late for you and you're already gone. lol.

Thank you for reading my post, I dont post often but I have been thinking about this as I see it happening a lot in the crypto space. It's sad to see people pinning so much hope into pipedreams, I see communities with tens of thousands of members in telegram groups shilling failed projects from 2016 and think they are missing out.

Remember, you dont need to be smart to not be stupid

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