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Buying crypto in 2023 despite big losses! Barbers jialat.

Tuesday, December 6, 2022

I am just talking to myself about some things an article in The Straits Times has mentioned.


How to help young people who are still enamored with cryptocurrencies despite the horrific crash?

OCBC says about 1 in 5 Singaporeans are invested in crytocurrencies.

On average, Gen Z and millenials who made losses lost 40 per cent from crypto investments.

Surprising thing is 39 per cent of those in their 20s are still likely to invest more in cryptocurrencies in the next 12 months despite their losses.




I will say 2 things here:

1. Buying cryptocurrencies in the hope that prices will go up so that they can make money by selling to someone else is not investing but it is speculating.

2. Buying more of any asset when Mr. Market offers a lower price is only a good investing idea if that asset is a bona fide income generating asset.

Anyway, how to help these young people?

World Economic Forum suggests that financial literacy education is key and suggests that people can use trusted blogs to learn about investing fundamentals.

AK wonders how can we tell which blogs are trustworthy and which are not?




Article went on to say that regulators should require companies selling or promoting financial products to have a "fiduciary standard of care."

Alamak.

Then, what happens to all the bloggers and Youtubers telling people to put money here and put money there for higher returns?

Some are also promoting get rich quick schemes in various forms?

Many if not most are sponsored to do promotions.

All will kena like that?

Remember not to ask barbers if we need a haircut?

Now, the barbers will tell you what haircut is better for you because they need to provide "fiduciary standard of hair."

Am I right to say that?

Barbers jin jialat like that if I am right.




The article says setting higher standards for financial services firms could protect young people better.

Operative word here is "better."

It won't protect anyone who is stubborn and who still wants to follow "evil" investment gurus.

Ignorance is bliss?

Blissfully ignorant?

Very headache but what to do?




References:
Recently published:



11 comments:

AK71 said...

Update on exposure in Hang Seng Tech ETF in the blog's comments section:
Hang Seng Tech ETF.
Sold again.

keng said...

This blog is trustworthy :P

https://singaporeanstocksinvestor.blogspot.com/

AK71 said...

Hi keng,

Aiyoh, so paiseh you like that say.

Kamsiah you plenty plenty for the vote of confidence.

I am glad you think so. :)

Rellangis said...

I feel crypto currencies are like collecting trading card games... Some cards are maybe worth more than other cards. Also depending on which card you are collecting. This is in the hope that one day in the future, the card will rise up in value and one may then sell the card for a nice profit... But yes I agree it is pure speculation and not really investing per se

FYY said...

Hi AK,

"Buying cryptocurrencies in the hope that prices will go up so that they can make money by selling to someone else is not investing but it is speculating." - Are you intending to sell your bitcoin if prices go back up in 1-2 years' time at a higher price? If so, part of your game plan is to speculate as well, no? Unless you plan to hold 100% 'forever'? Or do you mean that young people do not have a fundamental thesis to believe that number go up?

Also, young ppl are saying they'd still buy despite losing 40%. What about you? I remember you prudently allocated a tiny portion into bitcoin around 30k :)

Daniel Yip said...

No body will care about your money than you do, period.

AK71 said...

Hi Rellangis,

That is a unique perspective.

Hmm.

I think I understand.

I was suckered into collecting comics when I was in Junior College.

Easy to buy but very hard to sell.

A pricey lesson for an 18 year old. (TmT)

AK71 said...

Hi FYY,

You say:
Are you intending to sell your bitcoin if prices go back up in 1-2 years' time at a higher price? If so, part of your game plan is to speculate as well, no? Unless you plan to hold 100% 'forever'? Or do you mean that young people do not have a fundamental thesis to believe that number go up?

Also, young ppl are saying they'd still buy despite losing 40%. What about you? I remember you prudently allocated a tiny portion into bitcoin around 30k :)

I say:
Eh, I made it very clear why I bought Bitcoin.

It is the same reason why I bought gold and silver.

In the blog, I provided the link to the blog on this too:
Gold, silver and Bitcoin as insurance.

Insurance against fiat currencies and nothing else.

Having said this, I have nothing against speculation as long as we know we are speculating and not investing.

Problem is when people think they are investing when they are speculating which could lead to disastrous consequences due to improper position sizing.

I do a bit of speculating myself. ;)

You might want to read this blog from 2013 where I shared my methods:
Motivatios and methods in investing.

Gambatte! :D

AK71 said...

Hi Daniel,

Yes, it is the hard truth.

All of us must learn to take better care of ourselves in more ways than one.

FYY said...

Insurance against fiat currencies and nothing else -- Okay! Got it :) My question is, do you sell it in a few years if the value goes up? Or no exit strategy (yet) because it's a long-term insurance?

My question was also, would you buy more at 18k? Since your first foray was around 30k+, would you average down to increase your insurance pile?

AK71 said...

Hi FYY,

Just like regular insurance policies, I hope I never have to make a claim.

I have not sold any of my physical gold and silver, for example, which I have held for many years.

As for buying more, I did so when the price fell to what was regarded as the long term support.

That was the 200 days moving average which was still rising which suggested that it had a good chance of holding.

You might be interested in the YouTube video I produced more than half a year ago on this in which I also mentioned I had no interest in the buy crypto to get rich quick idea:
AK's YT video on buying Bitcoin at long term support.

Unfortunately, that long term support, even though it was rising, broke.

That was a very bearish sign and I held off further purchase of Bitcoin as the low could get lower.

Now, Bitcoin is still very much in a downtrend and the MACD indicates that momentum is still negative.

Bitcoin even broke a key support which I identified at $18.8K.

The next major support is at $11.9K which is a long way to fall, if it happens.

I would like to double my current exposure to Bitcoin which would still make it a very small part of my portfolio but good enough as insurance together with gold and silver.

The eventual target is still to have gold, silver and Bitcoin form around 5% of my portfolio.

However, until I see a positive divergence, I won't be buying more Bitcoin.


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