March 20th, 2020
Things seem to have calmed down a bit in the past couple of days, at least in the market. The global death rate for the novel coronavirus continues to grow exponentially daily, which seems kind of shallow to have such a focus on the markets.
I’ve been further compounding the perception that the only thing I can control is not the outcome of the event, but my reaction to it. So, this is why I’m so focused on the markets.
I may have some more meaningful thoughts about the virus on another day, but today I’ll let the medical professionals focus on covid-19, and I’ll keep to my office/home.
The markets have stabilized in the past couple of days, and Bitcoin has gone up a little bit. Currently, I am sitting on a 24.57% reduction in net worth since all time highs just one month ago.
I am still not tempted to sell anything at all. Iron hands. It does seem like the giant losses I took in the crypto market in 2017 and 2018 have helped prepare me for this black swan event.
So far, the most difficult decisions I’ve faced are that I’m sitting on dry powder that I will eventually put to work in the market. This market timing approach feels like the exact antithesis of what I should be doing, which is lump-sum investing any spare capital, and dollar-cost averaging every month. Or at least, that’s what I’ve been doing for the past five years.
I will continue to sit on cash and keep dollar-cost averaging with each paycheck.
Another signal is becoming more and more aware for me, buy when I’m scared. When I woke up on March 16th, Bitcoin was at $4,600. My initial reaction was an aversion to losses in my current holdings. What I should’ve done was bought more. I was on the fence but didn’t pull the trigger.
Note for crypto trading: sell when you feel like you’re going to be rich, and buy when you feel like you’re going to zero.
Someone smarter (or dumber) than me.
The country is finishing its first week of relative quarantine measures. Here in Colorado, restaurants, bars, and ski resorts have been shut down. Retail stores and banks are announcing temporary store closures.
The massive lines and abnormal amount of shoppers at grocery stores are beginning to subside, but there is a visible reduction in the supply of food on shelves. Two days ago, eggs were completely sold out – the day before that, chicken. My roommate said he couldn’t find canned beans until the second grocery store.
I wonder if the makings of a depression are in order. Mnuchin said the Feds think up to 20% of the country could be unemployed. The conservatives are putting together a universal basic income plan.. I still think things will get worse before they get better.
Until then, I’m extremely lucky to have a remote job that it is an industry that just survived one of its most volatile bear markets. I hope it is resilient through this global crisis.