Cryptocurrency Investment Principle: Holding "Slow Assets"

Sharing a video I recently watched with everyone.

A private equity fund manager recently discussed a case in an interview:

He researched Moutai in 2012, and for the next three years, Moutai had almost zero growth. However, during the same period (from 2012 to 2015), LeEco surged nearly 30 times.

At that time, people who bought Moutai and those who bought LeEco sat together for meals, and the Moutai buyers were mocked by the LeEco buyers.

This situation easily gives people the impression that:

Why look at fundamentals or the flow of funds? You can buy a junk stock and still see it rise several times; holding onto a performance stock for years might not yield as much as a few months with a junk stock.

However, this manager believes that in such a market, one should pay more attention to risks. Because when a junk stock skyrockets, common sense should tell you whether this is an opportunity or a risk.

The long-term result of such a market is bound to be a zero-sum game. Interestingly, most active participants in such a market believe they are smarter than others, but the final outcome is almost always a mess, with no one escaping unscathed.

This fund manager later investigated those around him who had bought LeEco and had once been pleased with its skyrocketing price, and found that not a single one of them made money from that stock.

The lesson reflected by this example is quite simple:

That is, the market is often very irrational, especially during times of massive bubbles, and this is even more pronounced. Moreover, the unfortunate thing is that whenever such a bubble inflates, many participants believe they are adept at exploiting it and recklessly dive in. At this time, understanding and adhering to the value of investment targets becomes incredibly important and precious. It is not only the last line of defense for protecting investors but also the only way to avoid falling into traps.

Such stories are repeated time and again in various investment markets across different periods. Although many investors have learned and even repented for these lessons repeatedly, whenever history repeats itself, human greed immediately causes most participants to forget history, forget the lessons, and dive back in with enthusiasm.

Comparing this to the crypto ecosystem, I reflected on my past experiences. At least so far, the assets I have invested in significantly (Bitcoin and Ethereum) have not shown an example like Moutai: where the price remains completely stagnant for three years from the time of purchase (starting dollar-cost averaging).

I wonder, if one day the Bitcoin and Ethereum I bought continue to have strong fundamentals like Moutai in the previous example, but their prices do not rise for three years, will I still believe that Bitcoin and Ethereum have value?

Moreover, if at the same time, another potential junk coin skyrockets dozens of times during these three years, even though I know deep down and can conclude that it has no real value, will I waver in my judgment and values due to the extreme irrationality of the market, changing my behavior to go with the flow?

At this moment, I cannot confidently provide a definitive answer.

From this perspective, it is truly remarkable that seasoned investors like Buffett, Munger, and Duan Yongping, who have experienced decades in the investment market, seen countless cases of Moutai and LeEco, and endured numerous instances of market irrationality, can remain so calm and steadfast in their methods, principles, and beliefs. This is not something that just anyone can achieve.

If viewed through the lens of today's correct standards, faith, belief, and values have truly become ingrained in their minds, hearts, and souls.