This is the insight I gained from my nine years of speculative career:
An ordinary person
If there is no one to lead the way, to guide you, you have to rely on yourself to understand
Basically, you have to go through three bull and bear cycles to make big money.
And it takes some talent and a little luck
1/First cycle
Ordinary people lack information, resources, background, and guidance.
Therefore, only when the media reports extensively will people pay attention to the market.
When you first enter the market, you have no idea what fear and cruelty are.
Although your investment is not large, you are ambitious and have made great achievements. You have never felt that making money is so easy.
After a small taste of success, various myths of getting rich quickly gradually emerged in the market.
You start to regret why you didn't play all in and lost the opportunity
You start increasing your position and even adding leverage
You make money faster and you sigh, why did you work if you had known it was so easy to make money?
So when you want to do something big, you get done big.
As everyone knows, the time when you go all-in is the tail of the bull market. It is the easiest time to make money, but also the time when the bubble is the biggest and the risk is the highest.
At this time, you only have ambition but no patience, and the result is basically a miserable loss.
As long as they are ordinary people, everyone behaves similarly
2/Second cycle
Most people can’t survive the first cycle of the bear market
After experiencing the bull market, you quit your job, but you have already denied the value of labor in your heart.
What is worse than losing off-site cash flow is that you are in debt after leveraging and have to pay back the principal and interest every month. Time becomes your enemy.
In a bear market, various extremely narrow fluctuations + false breakthroughs + rapid declines slowly make people despair
You find it's really hard to make money in the market at this time
Hot spots appear frequently, but they are always "a few days tour" until your ambitions are worn down.
Once you "chase the rise", you will lose money. Once you stop being greedy and do "swings", you can occasionally make money.
The market has been punishing those who "boldly chase the rise" and rewarding those who "trade in waves"
The long bear market makes everyone form the "inertial thinking" of doing swing trading
The bull market approach is no longer applicable
The biggest blow to you is not losing money + being in debt, but suddenly finding yourself "useless"
I used to make money by luck, but now I have lost it by my own strength in the bear market.
This is in stark contrast to you who are full of vigor and vitality in the bull market.
You are desperate, and you suddenly feel that your ordinary working days were pretty good.
You look at the coins that have dropped 90% and 90% again, and think they are all scams
At this time, the rich have no courage, and the courageous have no money.
You uninstalled the market software and returned to real life.
Gradually the bear market stopped fluctuating and no one in the group was talking anymore.
The market then quietly advanced three times and retreated one time and continued to rise until one day it suddenly reached a new high.
You see that the coin you have invested in for several years has finally paid off.
At this time, no one in the group spoke, only occasionally someone asked: Is the cow coming?
As an old investor, you have experienced a bear market and finally made it through. You breathe a sigh of relief and sell everything out of habit.
After recovering the cost, I no longer paid much attention to the market.
You don't believe that the bull market is coming. Without incremental funds, how can the bull market come so easily? Do you think the market will fall back 100%?
Unexpectedly, the market after you sold out became more and more violent. When it fell sharply, you were very happy, but after a few days it actually went back up and kept setting new highs.
The hot topic is also continuing and fermenting. People outside the circle are beginning to enter the market, and occasionally there will be news that a few newcomers have made a lot of money.
More and more brothers in the group are asking: Is the bull really coming?
You find that many of the old investors who entered the market at the same time as you have either disappeared or stopped talking.
Some of them lost all their money and were eliminated by the market; some of them suffered a lot in the bear market and were afraid of losing.
Most of the old leeks are like the old man who quit gambling. After charging the money from working every day into the platform, they even tremble when they place bets and light a cigarette.
After becoming a frightened bird, I am afraid of losing, and my confidence and spirit are gone, and my ambition is naturally gone.
This kind of thing is basically useless even if it still stays in the market
Chase the rise? At this time, most old investors have lost their courage and dare not participate in hot spots.
But you are very disdainful and unconvinced, thinking that this is a bubble that will burst sooner or later and that it is all a scam.
But you can’t just watch the market rise. You can only buy the old targets you are familiar with in the last round.
It was not until the market continued to reach new highs and the second half of the bull market began that the old investors in the group began to become active.
The cow is really coming.
Old investors are starting to participate in new narratives to make some money
At this time, the old target in your hand starts to rise.
You know the market is about to end, because you went all-in at this point in the last round and lost money for three years.
Although you didn't make much money, the three years of the bear market taught you what risk and cruelty are. You quietly liquidated your positions.
After four or five years of ups and downs in the market, you didn’t gain wealth, but you gained experience
I am still upset this time, but I am beginning to face myself
So although you won’t lose money in the second cycle, you still won’t make a lot of money if you have no ambition and only patience left.
3/Third cycle
Only those with endurance and good understanding can get here. Going through a bear market + a complete bull-bear cycle is like a 5-year-old child who has experienced two springs, summers, autumns and winters.
You begin to realize that the capital market has four seasons.
In summer, everyone will be so hot that they can't resist the temptation to swim naked in the sea; but in winter, those who don't go ashore and don't put on clothes in time will freeze to death.
You also know that the sun can shine in winter and hail can fall in summer, but over time, extreme weather cannot escape the cycle of seasons.
You slowly discover the certainty of the market: seasons come and go, but human nature never changes
The rules are surprisingly consistent. There is nothing new in the capital market.
At this time, only a few people have stayed in the market.
People who can be honest with themselves and are good at reviewing are rare.
They will summarize an investment system that suits them
At the very least, you have some experience with market sentiment.
Munger once said:
“Successful people in the capital market often need a rare combination of contradictory attributes: ambition and patience.”
At this point, you have a balance between ambition and patience, and you have experience + self-determination
Therefore, in the third round of bull market, if you can basically grasp the rhythm, making big money will be a natural outcome.
If you are lucky, your ancestors have accumulated good deeds and you can achieve financial freedom.
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Rui Xiaodan said in "The Way of Heaven":
As long as it is not something I realize or enlightened, you cannot give it to me. Even if you give it to me, I cannot hold on to it. Only what I realize and enlighten myself can I achieve. Only what I can achieve is mine.
How much you can realize depends on your current state and experience; how much you can achieve depends on how much you can realize.
