Do you ever find yourself second-guessing your investment decisions?
Over the years, I’ve sure had my fair share of mistakes. One of the reasons I started this program, is to share my hard-won lessons with others in hopes that people can learn from the various scenarios that I’ve encountered.
Let’s look at a few coins I gave price targets early on, and when the time came, I adjusted them due to excitement. One of them was MATIC, where I gave a $1.80 (roughly $10B market cap) price target, and when that hit, I was so caught up with the momentum, community, progress, that I readjusted to $4.
Another was Kusama (KSM), I gave a price target of $600, with the objective of parachain auctions, scarcity of supply, and excitement of crowd loans. It hit $600, and the next stop was $1000 right? I was wrong as both these coins hit my price targets and quickly sold off.
Why did the excitement get the better of me?
The answer was because those initial price targets had already “priced in” all reasonable assumptions. That is always how it goes in crypto, you make some assumptions on delivery and milestones, and you monitor the progress in getting there. Valuations are actually fairly simple to determine. You just compare similar projects at similar milestones, and examine the community, technology, and other factors to confirm the analysis. In Kusama’s case, I had already mentioned everything that was going to happen to hit $600, the parachain auctions happened, the supply got crunched, people got excited about crowd loans…so that’s why it hit $600! I also mentioned that Kusama should have gone up to match Polka Dot’s price momentum to $200, and that happened as well. So the adjustment to $600 was based on the addition of more factors. MATIC was also the same, I had predicted that it was an amazing layer 2 technology, and had potential to bring new apps over. When all the apps did come over, it jumped up from the $0.30 to the $2, all the assumptions came true.
But then what?
That’s why you set price targets, so that you can know when things are “at value”. When things become “at value” and no more progression happens, money moves on to other investments, that’s the nature of increasing your return on investment while you look at different options each month. By the way, this is an extremely important point, it also means that long term holding doesn’t always work in crypto. Educating yourself, understanding the potential for each technology, and placing your investments accordingly is the way to go.
In summary: Don’t allow emotions to cloud your judgement. Your price targets should be based on real analysis. The price targets should factor in a multitude of assumptions, and when those assumptions become reality, they should not be additive to the price. The overall market conditions make a huge difference (of course), but when you have a stabilized market this is how you should evaluate projects and set buy and sell limits.