Over the past month, I’ve talked a lot about how to deal with volatility in the markets.
With the Russian invasion of Ukraine showing no signs of stopping soon… and the inflation rate reaching 40-year highs… this volatility could be around for a while.
As I’ve written multiple times, we’ve seen these types of global shocks before. And historically, the market has rebounded to new highs after each one. That’s true for crypto as well.
So it makes no sense to panic and sell your assets at the bottom.
Putting the current crisis aside for a moment, over the long term there’s a much more dangerous threat to your wealth…
Within these volatile times, some of your assets will go nowhere. They’ll trade sideways for months. You’ll get incredibly frustrated… And then finally give up and sell them.
I call this “boredom.” It’s an aspect of investing that other newsletter editors rarely discuss.
But selling when you’re bored is just as dangerous as selling when you’re panicked. It’s a surefire way to destroy capital.
Now, I’ve always told you volatility is the price you pay for life-changing gains in crypto. If you’re not prepared for it, it can shake you out of your position too early.
On the flip side, you don’t want to fall victim to boredom, either.
Today, I’ll show you an asset that’s seen a lot of “boring” action during its history. But those who looked at the big picture and stuck with it saw gains as high as 175x.
It’s Never a Straight Line to the Top
Imagine it’s 2010. Someone recommends you buy a certain asset at $7. And they tell you this:
Look, sometime within the next 10 years or so, you’ll make 175 times your money on this asset… And turn $1,000 into $175,000. Now, I can’t tell you exactly when it’ll happen.
But what I can tell you is… During this process of owning this asset, you’ll lose 50% of your investment on paper multiple times. I can’t tell you how many times it will happen… But I guarantee it will happen.
Oh, and you’ll go through periods in which this asset does nothing for three years. It’s going to look like it’s asleep at the wheel. But if you hold it over that period, you’ll make 175 times your money.
You’re probably thinking I’m talking about bitcoin. But I’m actually talking about electric vehicle maker Tesla (TSLA).
When Tesla first went public in 2010, the market greeted the company with an enormous amount of skepticism.
Even after years of success, the skepticism persisted. Until one day, everybody woke up and realized, “These guys are going to dominate the electric vehicle (EV) business.”
Tesla went public with a market cap of $2.2 billion, Since then, its market cap has risen to as high as $1.2 trillion. And its stock price has been as high as a split-adjusted $1,229.
If you bought on IPO day, that’s a gain of 32,242%… enough to turn every $1,000 into $323,421.
That’s a staggering run. But it wasn’t easy getting there.
Take a look at this chart of Tesla from 2010–2012.
Imagine you bought Tesla at $7 in November 2010 (the first red arrow in the chart above). It’s now November 2012, and it’s still $7 (the second red arrow). You’ve moved nowhere in two years. That’s incredibly frustrating.
Tesla basically traded between $3 and $8 for three years. For that period, it was just a boring stock.
I’m willing to bet a lot of investors who got into Tesla’s IPO called it quits during that span. They just got too bored with the stock.
But even if you held the stock through those boring times, you wouldn’t be out of the woods yet.
Look at this Tesla chart from 2013–2016. We see a huge move higher. But then it goes through years of sideways action.
The stock ran as high as $58 and dropped as low as $28. You’d have had to deal with those ups and downs for years before Tesla finally broke out.
In 2019, I actually recommended Tesla to a group of high-net worth individuals at a conference in Carlsbad, California. It was trading around a split-adjusted $40 per share.
It promptly collapsed right after I recommended it… before going up 30x over the following two years.
It eventually hit an all-time high of $1,229 in November 2021.
All that sideways action… All the volatility… All those massive drops… When you pull back the camera, they’re now just blips on the radar.
Here’s my takeaway…
You can’t judge the quality of an idea by its daily price action. Because if the market were truly efficient, Tesla wouldn’t have gone through all that choppiness for years.
The reality is the market is highly inefficient… especially when it comes to disruptive ideas like electric vehicles and crypto.
That’s because many people in the newsletter business – and on Wall Street – are mentally lazy. They don’t dig deep enough to fully grasp the investment implications of new technologies.
Many of them will say, “Why do I need to look at EVs? We’re making all this money in these other areas of the market. That’s too hard. I’ll deal with it another day.”
But that lazy thinking creates opportunity for us…
This Is Your Biggest Enemy
If you’re a longtime follower, you know I believe bitcoin will eventually hit $500,000 in the next four years. That’s a more than 10x move from today.
Now, can I tell you the exact date that will happen? No.
But I do know you will be tempted to give into the siren song of boredom. Especially when you start seeing other market sectors start ripping higher.
You start thinking, “Maybe I’m wrong here. I better move my money into this hot sector.”
And BANG!
You end up selling what could’ve been the most life-changing investment you have ever owned.
I personally made this mistake all through the 1990s tech boom.
This is why ever since then… I’ve always warned my subscribers to watch out for boredom. For instance, back in the middle of Crypto Winter, when bitcoin traded between $6,000 and $7,000 for four months, I wrote…
Right now, your biggest enemy is boredom. And it’s the biggest enemy of every crypto investor. We just need to sit tight and not try to force anything.
Some people are letting the boredom get to them. They’re trading their cryptos to try and make money on short-term price swings. But that’s not what we’re doing.
We’re holding for the long run. All long-term holdings go through cycles. And bitcoin cycles like no other.
Bitcoin goes up and down… and when it goes down, everyone declares it dead. And right about then, it starts to rebound to new highs.
And I told you the same thing again in July 2020, when bitcoin was chopping back and forth between $6,000 and $10,000 for 13 months. I said this:
In 2016, people made the mistake of selling out of bitcoin too early. They let boredom get the best of them.
Friends, I don’t want you to make the same mistake. It could end up costing you millions of dollars in lost profits.
Since I recommended it in 2016, we’ve seen as much as a 160x increase in the price of bitcoin.
Now, that’s ancient history. But the future is still bright for bitcoin.
So my job now is to not let you succumb to boredom. I know when you’re trading sideways for years, that’s a big ask. I get it. But it also can result in a big payoff.
That’s what you need to focus on.
If I’m right – and I believe I am – bitcoin will be worth half-a-million dollars over the next four years.
That’s a 90% compound annual growth rate between now and then.
There’s no other asset in the world that’s going to compound for you at that rate with as much certainty (in my opinion) as bitcoin.
That’s why you need to let time do the heavy lifting… and don’t let volatility (or boredom) shake you out of the chance to take control of your financial future.
Let the Game Come to You!
Teeka Tiwari
Editor, Palm Beach Daily
P.S. If you’re worried about volatility in the markets, I also encourage you to diversify your portfolio… especially to add some exposure to private markets.
Studies show that private companies have lower volatility than publicly traded companies… and perform better during challenging times.
So, with all the “boredom” we’re seeing in the public markets, now’s a great time to get some exposure to the best private companies.
And recently, my team came across a pre-IPO company that’s made an incredible breakthrough. It’s found a way to produce oil at a cheaper cost than anywhere else in the world.
More importantly, we believe it could help the U.S. replace oil imports from Russia. After vetting this private company… JPMorgan recently wrote a check to become the largest shareholder.
Understand: This firm’s deals are some of the most profitable opportunities of the past 150 years… including returns of 47x, 100x, and 159x.
This time, the difference is that you can get a seat at the table, too. I’ve uncovered a way for regular investors to get involved… and the shares are trading for just $1.25.
I recently held a special briefing going over the details. You can click here to learn more… but be sure to act soon.
Shares in private deals are strictly limited. Once mainstream finance catches wind of this opportunity, I don’t expect it to be open for long.