I’ve kept several journals to help debug my mind. The goal is to fix leaks in my game.
writing allowed me to create concepts too large to fit all-at-once in my mental
lack of patience sitting in my positions
inexperience with high volatility
inconsistencies between long-term view and short-term positioning
failure to identify and articulate my edge
trading based on the 15m chart
I wrote most of my iPhone Diary while experimenting with scalping and swing trading: a search for low timeframe, low conviction, poker-like, repeatable setups. It allowed me some insight into how CT chart-readers view prices.
This sort of approach to the markets doesn’t suit my personality; I disliked being glued to the price chart, forced to babysit for entries or exits. My positions would get blown up if fundamental news came in which I failed to monitor. I prefer thesis-driven, long timeframe investing; it frees up my time and allows me to exercise my hobbies of (1) pondering the manner of things and (2) forecasting individuals. This becomes a virtuous cycle.
The crypto markets are maturing rapidly. For now, I cannot hope to compete with quantitative traders in whale games. My sole edge lies in:
fringe, unknown opportunities
low-liquidity environments
having a long-term outlook
Finding a fringe asset is always a boon — the possible change is skewed towards more attention rather than less. Greater attention tends to mean higher valuation. If something is low-liquidity, sophisticated actors can’t enter, so competition is softer. With a long-term outlook, which requires an ability to stomach common emotional pitfalls, the competitive pool shrinks once more.
My main heuristic is: “Would I join this opportunity? Would I lead this project?”
To take a page from Howard Marks, I’ve given up on directly timing the market. My only goal is to allocate into quality projects and teams when I feel like the price is cheap. To align with my personality and attain focus, I’m long-term long-only, with a strong bias towards opportunities which have the potential to return multiples — in short, I’m positioning myself to be an angel investor.
betting is committing money, getting more back when you correctly predict an uncertain outcome, and less back when you are incorrect
trading is betting on how prices will change
investing is
betting that an entity will somehow improve, and that its market valuation will therefore increase
aligning our payoff function with that of someone or something
surfing a wave
planting trees for their fruit
sacrificing now in the hope of receiving more later
like a poker game where entities compete to accumulate relatively more wealth
understanding that the underlying is different from the price
human life is moral-mental-physical
we have a limited decision bankroll
make sure we’re always vibing with our positions
what would you do if you absolutely believed in yourself?
it’s okay for a man to be wrong; it’s not okay for a man to stay wrong
play some NLHE/OTC every night to train risk-taking under uncertainty
It takes years to get feedback when angel investing; how can I battle-test my ideas, iterate my mental toolkit, train myself?