3 Rules I Follow to Win as a Retail Investor
- Be Skeptical
- Play the Long-Game
- Research Research Research
Be Skeptical
Being skeptical means questioning things. When someone tells you that you should buy into crypto before the FOMC meeting, I would question that.
What could you possibly know about this FOMC meeting that isn't already priced in?
If people like you are already buying pre-FOMC meeting, then doesn't that mean prices are already juiced?
Oh, but it will go up after the meeting.
Bull. You don't know that. You don't know that it will go up after the meeting. If you did, you would've taken your entire net worth and bet that it was going up since you seem so certain.
Always look at where people's money is. It tells you more than what their mouth does.
This is but one example. I can't tell you how many times I've heard stories of people I know buying some random stock or some random crypto because "someone told them that it was a good one".
Omg if I had 1 satoshi for every time I heard "someone told me it was a good one" you might as well call me satoshi nakamoto.
Always question. Always seek your own truth. Be a contrarian.
Play the Long-Game
As a retail investor, I believe that day-to-day trading is for hedge funds and high-frequency traders. I believe that long-term investing - finding things that are valuable today and will be more valuable in the long-run - is a far more practical way to invest in the markets.
Look to someone like Warren Buffett as a great example. He has gone down in history as one of the best capital allocators of our lifetime.
He looks for companies that are already the best in the world at what they do. He looks for companies that are generating massive stacks of cash and then he looks for companies that he believes will continue to earn that cash and pay him (dividends) over long timeframes.
He doesn't care about day-to-day movements.
In fact, he spends 99% of his time reading. Then maybe once a year, he says "we're buying XYZ company".
Buffett is a master of the long-game. He's looking at timeframes that are so far out. He's looking to reliably generate cash flow and value growth by owning successful companies that will continue to be successful in the future.
Now that is a game that I'd love to play.
Research Research Research
I can't tell you how important it is to be an avid researcher. Research means being aware of things. It means reading a lot. It means listening a lot.
If you're investing in stocks, there is endless amounts of information to research. I'm not talking about looking at charts and trying to draw some lines that might tell you where some stock/crypto is going to trade tomorrow.
No.
I'm talking about reading prospectus sheets. Looking at balance sheets. Wondering what companies are doing with their assets.
I'm talking about reading crypto whitepapers. I'm talking about jumping into discord servers for crypto projects. Checking Twitter accounts and github contributions.
I'm talking about "the boring stuff".
This is not the high-flying technical analysis that you see so many people trying to perform. This is fundamental, common sense analysis.
If it's stocks, then you wonder if a company is growing and will grow in the future.
If it's crypto, then you wonder if a project is building and will gain adoption in the future.
The world is simpler than you think, but you need the right tools and the right mindset if you want to start investing in it.
Bio: Hey there! I'm a former Seeking Alpha contributor, turned Web3 fanatic. I used to write about stocks and Bitcoin on SA and have recently re-discovered Hive. Feel free to give me a follow and track along as I work day and night to achieve one of my childhood dreams of owning a V10 Audi R8! and some other, more "important" financial goals!
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