Investing: The Long Term Perspective and Finding the Core of Projects
Here in the Cryptosphere, everything seems to move at lightning speed!
We get fired up because Hive goes up 60% in a day, and we talk about people making 500% in a week by investing in some new project that then moons.
Of course, these are all very short term events.
Hand-in-hand with such short term perspectives come a load of frantic buying and selling... what we used to call "churning," back when I was more actively involved in the stock market.
Let's Look at the LONG term!
Personally, I'm a long term investor and things like "day trading" and "timing the market" looks more like Russian Roulette than actual investing, at least to me!
My investment strategy has long been to carefully evaluate a company/project and if it fits my criteria for "worthy project with solid long-term outlook" I will buy in and then slowly accumulate over the long term... as long as that keeps making sense.
It's not particularly "sexy" nor very exciting, but it tends to yield pretty good results.
Consider, for example, that McDonald's stock has averaged about a 15.5% annual return (appreciation + dividends) over the past fifty years.
Now, here in the cryptosphere, we almost scoff at making "just" 15.5% in a year. Wen Moon, anyone?
Turning $1,000 into $2,300,000!
But then consider this, for a moment: If you had put just $1,000 into McDonald's stock in 1971 and never done anything more than re-invest the dividends... you would have about $2,300,000 today!
Of course, that represents the ultimate in HODLing.
Of course, it's not always that simple. Decisions still have to be made along the way.
Part of having a long-term investment strategy does include periodically reviewing and evaluating your investment to consider when/if there actually is a "point of selling" somewhere.
These days, the world changes rapidly, so "long term" may increasingly need to be revisited. I used the example of McDonalds because their product is extremely basic: they serve food and everybody eats. Last I checked, eating isn't about to go out of style, and "a burger and fries" is still a pretty staple kind of thing.
McDonalds on Mars?
It's a pretty good bet that McDonalds will be one of the first food franchises on Mars, once Elon Musk gets his colony going...
I'm only half kidding...
The same can't be said for a lot of other industries and projects. Even just ten years ago, blockchain was mostly an esoteric and deeply nerdy novelty. Heck, 50 years ago we barely had computers outside universities and large companies, and there was no Internet and no smartphones.
That said, you can still look at the fundamentals and determine whether or not you think "something" is well positioned within the niche it serves, has the potential to be popular/needed and whether it's scalable if it truly becomes popular.
"New," by Itself, is NOT Enough!
New technologies are inherently risky, and it's always possible to find examples of innovations that utterly bombed. Remember movies on Laser Discs? Remember Digital Audio Tape? Remember the Beta vs VHS battles?
It's easy enough to pick on the individual losers in the equation, but let's back out and consider the broader story arc: Each of the preceding are expressions of portable home entertainment," a meta industry that continues going strong, with yet new technologies.
For me, the question first asked must be whether the underlying industries are healthy and growing.
Closer to Home...
To become a bit more "local" with this line of thinking, those were some of the questions I asked myself with respect to being involved in both HIVE and LEOFINANCE.
Social media as a meta industry is not about to go away. Financial services and education is also not about to go away. Blockchain technology as a new vehicle for a great many things is not about to go away. That means "solid bones," to me.
I'm not willing to "play the lottery" with something that's all promises but offers no documented follow-through or evidence of longevity. Maybe that means I'm just not the "early adopter type," and so be it!
Now, Why Hive and Why LeoFinance?
In Hive, I see something far more than just a social platform, but the social platform is an additional bonus because the community here tends to be very dedicated and vocal... which is worth a dozen celebrity or "influencer" endorsements, in my estimation!
In marketing, you need differentiation, and the social aspects of Hive sets it apart in an ocean of blockchain projects.
In LeoFinance I see a sense of long term building and development that seems remarkably absent in many blockchain projects. There's more here than just "Let's write a white paper, start a project and see if we get rich!" It was one of the very first tokens I owned on the old Steem-Engine... because there seemed to be "something there."
Point of Sale?
Originally, I was going to use this article to focus on ways for long term investors to determine when it's time to cash out, but it seemed less important, as I went along.
The short answer — meaning my personal metric — is to watch for signs that a project is "going to sleep" and enthusiasm is giving way to apathy.
There's nothing wrong with stability, but that's very different from stagnation. Even McDonalds keeps reinventing itself, surrounding its core ideas with a cloud of new ideas.
With projects like Hive and LeoFinance, as long as new ideas and dApps keep being brought to the table, I believe we're golden. If it starts looking too much like "nothing new ever happens," then it may be time to take a second look...
Thanks for reading, and have a great remainder of your week!
How about YOU? Are you a long term investor? Do you consider your investments in the 5 or 10 or more year time frame? Do you have a long time plan? How do you see the LONG TERM prospects for projects like Hive and LeoFinance? Comments, feedback and other interaction is invited and welcomed! Because — after all — SOCIAL content is about interacting, right? Leave a comment — share your experiences — be part of the conversation!
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Created at 20210929 18:26 PDT
Posted Using LeoFinance Beta