[Cryptography] Cryptocurrency: CME Approved, Coin Paychecks, FED, OpenBazaar ZEC BCH

[Patrick]

Ray Dillinger wrote on 12/04/2017 05:17 PM:

> The evidence supports the notion that most investors make up reasons
> for their decisions long after the decisions are made, thinking backward
> instead of forward.

That's why I deploy a nearly automatic asset-allocation strategy, where
I target X% of my liquid NAV to be held in BTC.  Some hard-core
believers people choose 100%, or even higher than 100% by using
leverage.  Good luck with that.  Hard-core doubters choose 0%.  I happen
to choose 10%.

When my actual allocation gets 20% out of line from my target, I buy or
sell to get it back to the target.  For example if I reach 12%, I sell
some, or if I reach about 8.3%, I buy some.  However, each time I
rebalance, I only close one third of the difference.  That slows the
rate of buying into a bear market or selling into a bull market.

I do make one allowance for emotional speculation:  if I think the price
is raging upward, I allow my actual allocation to reach 15% before
selling, instead of just 12%.  That is my one "mad money" exception, to
cater to my inner speculative animal.

At any point in time, I stand to lose only the entirety of my current
allocation, for example if the BTC price plummets to 0.01 very quickly.
But if I'm suddenly down 10% like that, I'll chalk it up to a learning
experience and take solace in only losing some of the "house's money."

Asset allocation is by no means a sure thing, because I could lose even
more than 10% if I keep buying into a slowly sagging market.  That's why
I only close one third of the difference each time, so I'm not
incessantly trying to catch the falling knife.  However, I could still
lose more than 10% of my NAV if I doggedly buy all the way down.
Perhaps I could refine the strategy to dampen buying even further as
losses accumulate.  I might be able to limit total losses to a fixed
percentage by viewing it as the sum of an infinite series.


-- Patrick