Babbitt Column | Should the long-term investment in the blockchain sector continue under the slump?

Editor's Note: The original title was "Rethinking Long-Term Investment in the Blockchain Field Under the Collapse"

First, the beautiful idea of ​​long-term investment, and the cruel reality of falling prices

In the current situation of sharp fluctuations in the digital currency market, the "belief" of many people has been severely tested, especially those who are optimistic about the blockchain industry for a long time and adhere to the long-term investment philosophy in this industry.

Generally speaking, when an investor's investment style begins to shift to long-term, the investor is already relatively mature, and may even be a state that professional investors can only reach. After all, as opposed to chasing gains and losses, insisting on long-term investment means that you already have the most important thing in investment-patience, which is a natural advantage.

Many people are affected by Buffett. Father Barbara once said, "If you don't plan to own a stock for 10 years, it is better not to hold it for 10 minutes." So when they invest in the blockchain field, It also directly transplants the long-term investment concept of traditional investment-choose a good Token and hold it for a long time.

There are many Bitcoin hoarding parties that make a fortune like this. Basically, people who have held Bitcoin for more than 5 years have made a lot of money. However, for those who are new to the market, those who have not caught up with the best time to invest, and those who have bought at a high point, while adhering to the long-term investment philosophy, they are also facing the rapid decline in the number on their accounts, When the shrinkage is more than 80%, everyone cannot help but wonder, is the concept of long-term investment wrong? In other words, the long-term investment concept is correct, but it is not appropriate to use it in the blockchain field?

Second, rethink long-term investment

My personal investment style is long-term investment. I don't like too much short-term behavior. I also basically insist on long-term investment in blockchain investment. My personal wealth was considerable in the last bull market, but after a round of bull and bear conversion, my wealth has shrunk a lot. The numbers on your account are not deceiving, this is the best time to rethink long-term investment.

1. Long-term, originally because compound interest took a long time to take effect.

For the blockchain industry, the long-term is because the entire blockchain industry is still very early, and its development and maturity will take a long time; for the investment itself, the long-term is because compound interest requires extremely long time to take effect .

I have a more quantitative and operational definition of compound interest myself:

When your principal and profit together, the newly generated profit starts to exceed the initial principal each year, which means that the compounding effect really starts.

For example, when you initially invest 100 yuan of principal and a 10% profit margin per year, then the first year is 10 yuan of profit, and the second year of 100 yuan of principal and 10 yuan of profit together will produce 11 yuan of profit. When you make a new profit every year that exceeds the initial principal, the compounding effect will be called a real start. It is conceivable that this process will be very long at the beginning, but once the day when the compound interest effect starts, the more the principal will accumulate and the faster, the more the profits will accumulate.

To achieve compound interest, it is important to have a long-term stable profit margin. Obviously, digital currencies do not meet this point, and the fluctuations of digital currencies are too great. For example, recently, Bitcoin could drop by 40% a day. At this time, it is unrealistic to talk about a stable profit rate. The long-term profit of digital currency comes from its huge increase in the future. Because there is a huge increase in the future, short-term fluctuations do not matter, so even if a loss is made in a certain year or years, the huge increase will spread the profits to each year, and finally calculate the profit rate. Still high.

This is a very important difference between digital currency and traditional investment in the concept of "long-term". After realizing the importance of "a huge increase in the future", let's talk about long-term investment in digital currencies. The perspective will be different. At this time, our attention naturally shifted from "complex interest" to the question "Does this coin really have a huge increase in the future?" To answer this question, you need to think deeply enough, and then develop "Trusted" for decades.

2. Qualification is required for long-term investment. Do you have this qualification?

At some point, I suddenly realized one thing:

Qualification is required for long-term investment, and ordinary people do not have this qualification at all!

If you compare the short-term investment to a 100-meter race and the long-term investment to a marathon, you must know that running 100 meters is relatively easy, and you can run with the legs raised, but running a marathon generally requires half a year of preparation time. You need to buy a professional Equipment, make a targeted training plan, you have to run from 1,000 meters, then 5,000 meters, then 10,000 meters, and slowly add, and finally you can challenge the whole marathon.

The same is true for investment. If you just follow the trend of the rally and sell, buy high and sell low, then it is very simple. Just like running 100 meters, you can just "lift your trouser legs" to play. However, if you want to make a long-term investment, you need a lot of conditions: you need a lot of "equipment", you need a very detailed "plan", you need a lot of "supply stations" along the way, and the energy source constantly replenishes your energy.

Therefore, from this perspective, many people are simply not qualified to make long-term investments, just as many people cannot run a marathon directly.

To make a long-term investment, you must ensure that you have no short-term "troubles" and no medium-term "stress". If you still have a lot of debts that you have n’t paid off in the short term, and you still have a lot of leverage, you have n’t paid off your credit card this month, or even lunch at noon tomorrow, then you are not eligible for long-term investment and you ca n’t. Good long-term investment; if your mid-term layout is not completed, your career path is not smooth enough, your cash flow is not sufficient, and your family relationship is not harmonious, then you may not be qualified for long-term investment and it is difficult to do well Long-term investment.

Do you think long-term as long as you can endure loneliness, and then you can wait for wealth in bed? No, for a long time, the entire investment ecosystem tests you in turn, allowing you to step on all possible pits, allowing you to encounter all unimaginable extreme situations, and then repeatedly toss After decades, if you haven't hung up, then OK, you are a qualified long-term investor.

Long-term investment means a long-term test!

As long as your investment system has a trace of loopholes, as long as your investment philosophy has a trace of immatureness, then sooner or later you will have to pay the price, and sooner or later you will get a ruthless blow of time in all directions, and it will be difficult for you to get there. Long-term arrival.

Only those who pass these tests are the real long-term investors, the real "friends of time", and they can fully enjoy the dividends of the entire trend.

The process in the middle will be very, very slow, very, very tormenting. If you spend it with an attitude of "persistence," "endurance," and "tolerance," then you are basically overwhelmed. It must be that after you have cleared up most of the problems around you, when you have cleared up the short-term problems and financial pressure, take care of your family and career in the mid-term, when your career starts to stabilize, when you start to feel that your life has become easier and easier. When there is no pressure, when your cash flow starts to flow continuously, and when the snowball you are investing in starts to slowly roll forward, at this time your investment is on the right track, and at this time the huge gains will be in that The so-called "long-term" is waiting for you there.

3. Trends are important, but more important than trends is the "company" itself.

The trend is important. Many people know this. After all, "Standing at the air outlet, pigs can also go to the sky." After all, choosing an "elevator" is more important than what you do in the elevator. After all, according to the "dotted line The "face" theory, a good point, needs to be on a good line; a good face needs to be on a good body to play the biggest role.

However, megatrends do not change arbitrarily. Although it is difficult to see the megatrends, once a trend is selected, it is not a thing that can be changed at will. We have all selected the blockchain industry, and the problem of megatrends has been resolved. At this time, the most important thing is to believe in this megatrend in the heart. Note: not believe, it is believe, it is 120% believe! And you ca n’t just believe in imagination. Instead, you have to be rational. You must list all your objections and then refute them one by one. If you think you can convince yourself of the reasons for your refutation, then you can barely pass.

After the megatrend is selected, we should focus our efforts on selecting a good "company". In the end, we rely on a specific "company" to make a profit, rather than rely on the "trend" abstract thing. Take digital currency as an example. There are thousands of tokens in the entire digital currency market. In the end, long-term holding can be profitable, and it is rich. It is worthy of the time, capital cost, and risk you take for long-term holding. More than 1%.

If you choose the wrong investment target, the situation is completely different. Maybe when the big bull market comes, you can still make a profit, but when the bear market comes, can you move ahead? Is your profit going to spit out? Do you still have faith in it during the huge fluctuations during the long time? These are all things to think about.

A good "company" is a friend of time, and a bad "company" is the enemy of time. It can truly accompany the trend to the end. Only good companies can fully enjoy the trend dividend, and it is one of the few best and best in the industry. the company.

Third, the conclusion

Only those with the strongest strength, the clearest ideas, and the most believable of the future may make long-term investments, and not everyone has this qualification.

Only by selecting the best companies in the industry can long-term investment be made, and not everyone can choose.