With the markets taking a slump today, I’m getting a lot of questions from people asking,
"Should I sell ?!?!"
"Has anything changed about your investment in the past few days" , I ask.
“Well, the price has changed", comes the retort.
Instead of facepalming, I tell them the following story (inspired by legendary Ben Graham )
Mr. Bob Mania
Let’s say you trade items in real life. Specifically – you trade in laptops and cans of Pepsi. (Bare with me...)
You usually trade these items with a guy named Bob – Mr. Bob Mania.
The going rates?
Each laptop: $1000
Each Pepsi Can: $1
However, Bob has occasional bouts of manic syndrome. He either gets really excited or really depressed (or sometimes both).
One day, you go to Bob to sell a laptop and buy some Coca-Cola cans.
Bob, however, is having a manic episode and says to you:
Bob: Yea - I’ll buy the laptop off you for $20. And the Pepsi is going to cost you $500
You: What the hell?? Those weren’t the prices last week.
Bob: Well, that’s what they are today – and if you don’t act fast, the laptop may sell for only $1 tomorrow. And the Pepsi can may cost you $1000”
What do you do?
Option #1 - You quickly sell all your laptops and rush to buy all the Pepsi cans possible.
Option #2 - You hold on to your laptop (perhaps even buy more) and quickly rush to sell all your Pepsi cans.
The obvious answer is Option #2. Why? Because you know the true worth of your laptop. And you know that the Pepsi can is completely overpriced. Yet – so many of us pick the first option when dealing with the crypto market.
Bob – is the market. And we sell our laptops to him for $1. And buy Pepsi-cans from him at $1000 simply because Bob is in one of his moods. Don’t let the market’s occasional state of manic episodes dictate the price of your investments. The smart investor will take advantage of Bob’s bout of mania – and not let Bob’s emotions dictate his financial future
TLDR Moral Of The Story? Don't sell your ETH to Bob. And next time, sell that TRX at the godam top...
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