Think long term
Build long term positions, don’t worry about short term details or fluctuations. A stock may fall 10% on day 1 after buying but if it’s a good investment it can 3-10x or more long term.
Stocks vs Bonds/Loans
Stocks are riskier than bonds/loans. Downside: can become worthless. Upside: can no limits to growth – a world changing company like Apple or Microsoft held long term can bring 10-100x returns.
Bonds/loans on the other hand are predictable but with limited upside (and still come with risk, in case the issuer defaults).
Money generally tends to migrate to where it is safest. For example during the 2020-2021 inflation period, money flowed to big tech companies such as Google and Apple, who were not only growing but secure.
Government involvement helps when it comes to externalised costs that aren’t accounted for by private company activity – such as creation of pollution.
The more government gets involved, the less free society become, as incentives for competitive performance are reduced, reducing overall product/service quality, making the country poorer, so it should only happen where absolutely necessary.
The reason capitalism works is because it allows price discovery. Other systems don’t, and they fail to the degree they inhibit price discovery.
Cryptocurrency and DeFi are scams
- Bitcoin and ETH are not being used in the real world in a way integral to economic activity, even 10 years on.
- An issued token cannot be decentralised without the source code being frozen and subject to no further modification ever.
- Centralised authorities control the source code for each project, and most tokens are on centralised exchanges, yet proponents promote decentralisation – lies and hypocrisy.
- All cryptocurrencies mirror Bitcoin and meme stocks in behaviour with regard to market dynamics, which is evidence that it’s not the technology itself but only herd behaviour and hype that is driving the price.
- Unlike stock in a company, there are no fundamentals – the tokens are backed by nothing other than ephemeral “trust” that can disappear within seconds into nothing.
- The “decentralised” nature of cryptocurrencies means no ultimate accountability. This would work if the tokens had inherent, intrinsic, non-ephemeral worth, like metals or commodities, but they don’t.
- Currencies like USD and GBP are guaranteed by their issuing, elected governments. Cryptocurrencies like BTC and ETH are not guaranteed by any issuers, despite being issued currencies.