Right now, a lot of people are suffering…
Since the beginning of the year, the S&P 500 is down 21%. Over the same time, bitcoin is down 56%.
Portfolios are bleeding red. And many people are throwing their hands and selling great companies and world-class emerging assets like bitcoin and Ether into this weakness.
I know from experience: Selling your blue-chip stocks or world-class cryptos into weakness is the biggest mistake of your financial life.
Look, I get it.
Paper losses or not… it hurts to see positions down 60–80%.
I want you to know I put my money where my mouth is.
My bitcoin and bitcoin-related investments are down millions upon millions of dollars. And my stock portfolio has taken a dive, too.
I haven’t sold into this weakness. Nor will I sell.
Not because I’m a stubborn zealot… Far from it. I’m a pragmatic capitalist.
I’m not selling because I’ve seen this movie before. And I don’t want you to make the same mistake I did.
Bigger Mistake Than Bankruptcy
In 1994, I watched the Fed vaporize my tech investments when it raised interest rates five times from a low of 3% to a high of 6%.
I was young and inexperienced. And so I did what young and inexperienced investors do: I panicked and sold amazing emerging tech names like Microsoft and Oracle at the lows.
That decision haunted me for 25 years. Had I just held on, I would have made well over $20 million before I turned 30.
That failure crushed my mind for years. I then made another mistake that cost me over $720 million.
In 2003, I went long on Apple, betting on the widespread adoption of the iPod.
After I bought Apple, Steve Jobs came out and canceled 55 million stock options, sparking fears the company’s founder was dumping shares.
Apple shares tanked. But this time, I held on and rode out the storm. The mistake I made this time was selling far, far too early after they rebounded.
On a split-adjusted basis, Apple was trading at just 25 cents per share in 2003. At its recent peak, I would have made $720 million for every $1 million I had invested in the stock.
This financial mistake has caused me more heartache, regret, and self-flagellation than any other financial decision I have ever made. That includes the bad decisions I made in 1998 that compelled me to file for personal bankruptcy.
The bankruptcy was less traumatic than leaving $720 million on the table.
But it’s critically important you understand why you want to stay in these assets and ride them out to their “terminal” value.
The terminal value is the price point I believe the asset is ultimately heading toward.
For instance, focusing on the terminal value of bitcoin (BTC) and Ethereum (ETH) has been my guiding star since I began recommending them in April 2016.
It’s why I didn’t sell when BTC dropped 85% and ETH dropped 95% during the last Crypto Winter.
It’s also why I told you not to sell blue-chip stocks during the pandemic crash in March 2020. As I’ve written here, we’ll see the bull market in stocks resume in early 2023.
Regular Daily readers know that I believe bitcoin will hit $500,000 by 2025. And Ethereum will hit $10,000 over the same period.
And based on my research, we’re currently in a short-term “cyclical” bear market within a long-term “secular” bull market. I believe the bull market will resume in 2023… and reach new highs again until at least 2028.
So there’s plenty of upside ahead in world-class assets like bitcoin, Ethereum, and blue-chip stocks.
I know that’s an outrageous prediction to make… especially given all the volatility we’ve seen this year.
And I realize this isn’t the message you might want to hear.
So I get it if my message makes you uncomfortable…
I got a similar reaction in 2014 when I said we’d be in a long-term bull market in stocks. Very few people believed me then. But those who followed my research made a ton of money.
Like then, I promise to tell you what you need to hear… Not what you want to hear.
How to Emotionally Handle Bad Markets
From personal experience, I know that selling great assets into market weakness is a huge mistake.
So I strongly urge you not to sell your blue chips and top-tier crypto investments at today’s prices.
Does that mean never selling anything?
No. It doesn’t.
One thing I do in bear markets is review my positions for “dogs.” Just going down in price doesn’t make an investment a dog.
When I’m sniffing out the dogs in the portfolio, I’m looking for names that have failed to execute their stated plans meaningfully.
For instance, when it comes to crypto, I look for names where adoption of the project is waning, and product development is failing to track with their stated roadmap.
If a project can’t get meaningful traction in a raging bull market, the project will not survive the bear market.
I will rarely dump a blue-chip unless the business fundamentals have been permanently impaired, or it looks like the dividend might be in danger.
Long story short: Selling at today’s depressed prices will have you kicking yourself when the markets turn around… And they will turn around.
Between now and then, we’ll see more volatility. Yes, we’re rallying right now, but this is almost certainly a bear market rally.
The key here is to use recent market strength to dump the dogs, raise cash, and get ready to deploy it on the next dive down.
The key here is patience. There is no rush. This is a bear market. That means we let prices come to us… We do not chase.
Remember, these cyclical bear markets are like an “in-game reset” to buy world-class assets.
If you missed the beginning of this bull market, these in-game resets give you a rare chance to start over and capture all the upside as the secular bull market resumes.
You must tune out the negative news and focus on acquiring great names at bargain prices.
Let the Game Come to You!