If you think they are the same, please correct this perception, otherwise you will suffer heavy losses in the future!
Here's what happened. Yesterday in a group, I saw a friend who had lost a lot of money in a contract, and he made a plan for the next stage with great ambition.
He probably said this:
“Don’t mess around anymore. Don’t touch contracts or leverage, and don’t mess around with spot transactions. You will definitely lose money if you mess around!
So I decided that from now on, I will no longer do short-term trading and only do value investing!
From now on, I will buy coins and hold them for the long term! I will never sell them unless the price goes up! This way, every investment I make will be profitable!"
To be honest, when I saw that he had such an understanding, I knew that this guy was going to be in trouble again. Isn't this just walking into the tiger's den and then the wolf's lair?
So I asked him in the group what the relationship is between value investing and long-term investing, and whether he should think about this issue carefully.
As I expected, there are quite a few people who think that holding long-term is value investing!
Especially those who have just escaped from the clutches of "short-term operations". In their eyes, the so-called value investment is long-term holding!
But in fact, there is a gap of ten thousand years between long-term holding and value investing. If you think so, please upgrade your cognition, otherwise you may suffer heavy losses in the future!
Long-term investment emphasizes the dimension of time, while value investment emphasizes growth and safety margin.
Look! These two things are totally unrelated.
If you hold coins for a long time, it can be called long-term. For example, if you have held EOS since 2018, you are a long-term investor, but it has nothing to do with value investing, and you are unlikely to get your money back.
So the beautiful dream of the guy above has been shattered, hasn’t it?
Here are some practical tips from my buddy’s experience of more than a decade:
When investing in value, only two issues should be considered when buying:
1. What is the future growth potential? Is it possible for this round of trend to explode?
2. Is the current price cheap enough?
Consider three questions when selling:
1. Has the trend of this bull market changed?
2. Is the current price overvalued? Does the overvaluation cover future growth potential?
3. Is there any better target with good value for money?
That’s all, it’s not that complicated. There is no reference dimension of “investment time” here at all!
If you still don't believe it, let me give you an example:
If you buy a token and are lucky enough to see its price rise by 300% in one breath, value investors, once they find that the stock price is overvalued, will avoid it as much as possible and sell it without any hesitation.
You said value investing is long-term, right? Well, if you buy a coin and you are lucky, it goes up 300% in one go. Do you sell it? If you don’t sell it, you are a fool! If you sell it, you are embarrassed!
Therefore, for value investing, there is no reference dimension of "investment time" at all!
Then why do many people think that value investing is long-term investment?
This is because the process of value return takes time. Most of the time, the return period is a little long. Buffett has only made value investments a few times in his life, and they were all relatively long. Naturally, people habitually think that value investment is to hold on to it and wait for it to rise.
On the surface, there is no difference between value investing and long-term investing. They both involve holding on and waiting for the price to rise.
However, the internal difference is huge.
One has its own valuation and trading basis, and there is a basis for buying and selling. The other is just hurt by "short-term trading" and goes to the other extreme, or is deeply trapped and can only play dead, and is forced to make a long-term investment. The result in the currency circle is lying down and dying, the longer you wait, the more you die, and finally it returns to zero;
So brothers!
No matter what the reason is for you to make a long-term investment in a coin, you have to admit that swearing not to sell until the price goes up is just wishful thinking on your part.
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