In fact, both Munger and Duan Yongping have said similar things. Munger said that Chinese people are very shrewd in other matters but foolish in stock trading; they love to gamble too much. Duan Yongping said that stocks are not gambling, but retail investors say it is gambling. Duan, you don't gamble because you have money; we have to gamble because we don't have money. Then Duan Yongping said, no wonder you are broke. (This is not the exact wording, but it conveys the meaning.)
Assuming your account holds hundreds of millions or even billions in cash, you will naturally become a globalist, a world citizen, allocating assets worldwide. The only companies in your home country that you might consider are very few, like Moutai, Tencent, Shenhua, and so on. Would you buy Apple supply chain stocks or Nvidia supply chain stocks? No, you would buy Apple and Nvidia directly.
Assuming you have tens of millions or even hundreds of millions in your account, you are likely to allocate a certain portion of your capital to high-dividend stocks and then track industry opportunities, planning to hold some growth stocks.
Assuming you have a few million in your account, you might pick up penny stocks, bet on some restructuring opportunities, or gamble on high-valuation, high-growth sectors.
Assuming your account has 50,000 or a couple hundred thousand, your thoughts are likely to change to risking it all to turn a bicycle into a motorcycle. Finding the top stocks, the daring team for limit-up stocks. Yesterday it was chips, today AI, tomorrow humanoid robots.
Assuming you have no money at all or are living in debt, your thoughts might be about daring to laugh at Huang Chao after blooming, in Season 3, Pu Dada is still great.
The less money you have, the stronger your gambling nature will be. A large capital can have a stable return of ten to twenty percent and still dominate. But if your capital is small, making 20% on 100,000 in a year is of little use; your expectations are likely to turn into doubling or even several times over.
The poorer you are, the more you love to gamble; the more you gamble, the poorer you become.
In the cryptocurrency market, the basis will eventually converge, and options will inevitably expire. Price fluctuations in the cryptocurrency market are extreme, and the basis may deviate significantly in a short time, but over time, market forces will push the basis back toward a reasonable range. Once an option reaches its agreed expiration time, its value will be determined based on the market situation at that time and will not exist indefinitely.
The implied volatility in the cryptocurrency market is not the actual volatility; it reflects liquidity pricing more. Implied volatility is influenced by various factors such as market sentiment and capital inflows and outflows. When market liquidity is tight, implied volatility tends to soar, and conversely, it may decline. It represents the market's reflection of the supply and demand conditions of liquidity.
The law of large numbers and the central limit theorem do not apply in the cryptocurrency secondary market. The market size is relatively small, making it susceptible to manipulation by large holders and sudden changes in policies, often resulting in non-normal distribution of price trends, making it difficult to accurately describe and predict using these two theorems.
The cryptocurrency market cannot be without volatility because liquidity is limited. The trading depth and breadth in the cryptocurrency market are relatively shallow compared to traditional financial markets, where a large transaction order can trigger significant price fluctuations, and limited liquidity makes price stability almost a luxury.
In cryptocurrency trading, what matters is not how often you predict the market correctly, but the cost of being wrong. The price volatility in the cryptocurrency market is enormous, and if you misjudge the market without proper risk control, it can lead to significant losses. Therefore, controlling the extent of losses when you are wrong is more critical than merely pursuing the number of correct calls.
In cryptocurrency trading, most of the time is spent waiting. What are you waiting for? You are waiting for the law of large numbers to take effect, allowing various possible market conditions to have a chance to emerge, thereby letting your trading strategy show results over the long term; waiting for positive expectations to converge, meaning that as the number of trades increases, profit expectations can gradually be realized; waiting for the moment of liquidity exhaustion, because when liquidity is extremely lacking, extreme price movements often occur, potentially containing trading opportunities.
Trading cryptocurrencies is about repeatedly doing simple things, persisting with one method for a long time, and honing it to perfection. Trading cryptocurrencies can be like other industries; practice makes perfect, allowing you to make every decision instinctively.
The opportunity has come; assets will double! Follow Biao Ge closely and easily make big money.
Continuously pay attention: MAGIC, RARE
