Once, I came across an online video of a motivational speech wherein the speaker tells the story about his high-school sweetheart and the Romeo &. Juliet sort of romance—that they relished—until one night she was introduced to boys and alcohol at the same event. As one may note, this introduction naturally drains every bit of suspense and intrigue that could possibly arise from the ending, for the attentive listener. Obviously, she ended up having more of both than was wise for her; and, there was our speaker’s heartbreak.
A great many millennials—namely in third world countries, or coming from such countries—alongside ‘lay-investors’ (i.e. those with no educational background, training, or practical acumen pertaining to investment) have been introduced to cryptocurrencies and Elon Musk in a very similar manner to that of the girlfriend’s introduction to boys and alcohol in the above-recited story. Having that said, it would be safe to presume that they’re probably headed towards a similar eventuality—in a word, disaster. That follows the line of reasoning: identical factors, catalysts, and actions would most definitely yield identical results.
They so childishly, mounting to an innocent naïveté, act upon the premise that by tailing a notorious multi-billionaire trading moves, they themselves would become rich—if not multi-millionaires—in no time!
A word of advice: if you are to tail someone’s investment cherrypicks, that ought to be Warren Buffett’s. Notwithstanding, even he would vehemently implore [emphasis added] you to do your homework before doing such a thing.
The mere mimicking of someone’s investment portfolio, in itself, does not ensure that spoils would be shared across the table. At the end of the day, they make those transactions on the basis of a well-informed judgment and for a specific, meticulously calculated, and impeccably timed purpose. As such, for those in possession of identical data, analysis, and purposiveness, it is reasonably safe to follow suit. Whereas, for the rest: you better do your goddamn homework! lest the only thing you would be able to do is bracing yourselves for an inevitable and imminent coup de main, known as ‘financial ruin’.
Still have some doubts? Allow me to explain; and, hopefully, I shall succeed to disperse these for you…
This is for those who don’t know know what they are doing, as well as those who erroneously ‘think’ that they know what they are doing. God’s honest truth, the second group is the worse of the two—i.e. egotistical know-it-all halfwits.
Very well.
Now, your number could be correctly split and classified under two fundamentally similar, yet distinct, classes: free-riders and bandwagoners.
To start with the egotistical know-it-all halfwits, the free-riders amongst you are prisoners to this beautiful reverie: “I’m going to follow Elon Musk on Twitter, and when he tweets or shares something bullish about some cryptocurrency I’ll take a long position on that; conversely, when he sends out bearish signals, I shall take a short position. Eventually, I am going to be rich… and, who knows, I might be the next Elon Musk.”
The idea of ‘becoming the next Elon Musk’ elicits within this group’s subconsciousness the illusory notion of being Elon Musk at the present moment. Subsequently, the illusion protrudes onto the conscious mind enticing the person to think that ‘they’ know what Elon Musk knows; because, subconsciously, they are ‘Elon Musk in the making’; hence, the science of Elon’s private cerebral knowledge (information and thoughts) is an implied per se plug-in to this psychical impersonation of the man. They somehow, overnight, turned Elon Musk, in their minds, from a genius innovative entrepreneur into a financial investment deity—who just CAN’T GET IT WRONG.
Furthermore, you cling onto a totally wrong impression of the nature of Musk’s genius. You do know that he’s an entrepreneur who pursues the development of cutting-edge terrestrial and celestial applied technology for the betterment of the human condition—and, not an investment oracle by trade.
Next time, at least get the object of your psychical impersonation right, would you? I’ll give you a hint: when it comes to investment, fancy becoming the next Warren Buffett—for God’s sake!
One more thing, if you follow Elon’s tweets, you’re not getting everything you need to know in order to make an informed decision as to which position to take on the crypto markets. And, looking at few candlestick or line charts doesn’t do the trick either.
A person needs to read, learn, and analyze before taking an investment position. Technical and fundamental analyses are requisite. Rest assured, Musk has had definitely read every article, piece of literature, and analysis on cryptocurrencies prior to his investing in them. The wager is that more than half of you are still unaware of the energy or money-wise cost of a Bitcoin transaction [Note: that has to be incorporated into the fundamental analysis in terms of sustainability and future growth thereof].
To be fair, it is almost impossible to conduct reliable fundamental analysis for cryptos, given their exclusion from the real economy. [see my earlier article, “Bitcoin Replacing the US Dollar as the Leading Global Currency…MMM…Well…”]
The second class, bandwagoners, is almost identical to the first, free-riders, but remains distinct in that they do what they do because ‘everyone else’—everyone they know, that is—is doing it; and, the latter, ‘everyone else’, can’t be all wrong. This class simply jumps on the wagon of the hottest trend.
Being earnest to make money is all very fine—really—so long it is done properly. What these two classes are in fact doing is turning themselves into dumb puppets played by the strings in the hands of the ventriloquist—in this case, Elon Musk; whether he means to assume such a role or not.
It is an incontrovertible truth that Musk’s trades are driven, first and foremost, by Tesla/SpaceX-bespoke needs, rather than toward the end of making money for its own sake. This guy does not care about money beyond the parameters of it being a means for manifesting technological advancement within Tesla and SpaceX.
In fine, should one seek to follow Elon Musk, they should invest in either Tesla or SpaceX, even in both—not in cryptocurrencies—unless one’s realtime ability to copy his trades is instantaneous (which is a practical impossibility), and his bank account is as large, which is highly unlikely. Otherwise, one better sticks to the Oracle of Omaha, i.e. Warren Buffett—who, in turn, has extensively emphasized the fact that trading literacy and prudence comes from books and analysis, rather than Twitter and the imitation of a single man’s whims.
[Note: with all due respect to Elon Musk, for I know that he’s no accidental genius and that he has a clear compass and sense of purpose]
Question: When was the last time you, free-riders and bandwagoners, read a piece of literature on cryptocurrencies, or held a book on investment in your hands, for that matter?
Food for thought…
