In fact, both Munger and Duan Yongping have said similar things. Munger said that Chinese people are very astute in other matters but foolish in stock trading; they love to gamble too much. Duan Yongping said that stocks are not gambling, yet retail investors say they are gambling. Duan replied that it's no wonder you don't have money.
If you have cash exceeding tens, hundreds, or even thousands of billions in your account, you would naturally become a globalist, a world citizen, allocating assets around the globe. Domestically, you might only consider a handful of companies like Moutai, Tencent, and Shenhua. Would you buy concept stocks like Guolian or Nvidia? No, you would buy Apple and Nvidia directly.
Assuming you have tens of millions or even billions in your account, you would likely allocate some of your positions to high-dividend stocks and track industry opportunities, planning to hold some growth stocks.
If you have a few million in your account, you might be picking up penny stocks, betting on some restructuring opportunities, or gambling in high-valuation, high-growth industries.
If you have 50,000 yuan or a few hundred thousand, your mindset would likely shift to taking risks to turn a bike into a motorcycle. Seeking out leading stocks and the 'limit-up' death squad. Yesterday it was chips, today AI, and tomorrow humanoid robots.
If you have no money at all, or even live in debt, you might think 'I will take risks and fight for every opportunity; dare to laugh at Huang Chao as not a real man; even in the S3 season, Pu Dad is still a big player.'
The less money you have, the more you tend to gamble. Large capital can achieve a stable return of 10-20%, standing out in the market. But if you have little capital, making 20% on 100,000 yuan in a year is of little use; your expectations can easily turn into doubling or even several times that amount.
The poorer you are, the more you love to gamble; the more you gamble, the poorer you become.
In the crypto market, the basis will eventually converge, and options will inevitably expire. The price volatility in the crypto market is severe; the basis may deviate significantly in a short time, but over time, market forces will push the basis towards a reasonable range; once options reach their agreed expiration time, their value will be determined based on the market situation at that time and will not exist indefinitely.
The implied volatility in the crypto market is not the actual volatility; it reflects the price of liquidity more. Implied volatility is influenced by various factors such as market sentiment and capital inflows/outflows. When market liquidity tightens, implied volatility often spikes, while it may decrease when liquidity is ample; it reflects the market's supply and demand for liquidity.
The law of large numbers and the central limit theorem do not apply in the secondary market of cryptocurrencies. The market size is relatively small, easily influenced by large players, policy changes, and other sudden factors, leading to price movements that often exhibit non-normal distributions, 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 crypto market are relatively shallow compared to traditional financial markets; a large trading order can trigger significant price fluctuations, making 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 fluctuations in the crypto market are immense; if you make a wrong prediction and do not have risk control in place, it could lead to significant losses. Therefore, controlling the extent of losses when you are wrong is more crucial than simply aiming for the frequency of correct predictions.
In cryptocurrency trading, most of the time is spent waiting. Waiting for what? Waiting for the principle of thoroughness to take effect, allowing various possible market scenarios to emerge so that your trading strategy can show results over the long term; waiting for positive expected returns to converge, as the number of trades increases, the expectation of profit can gradually be realized; waiting for the moment when liquidity is exhausted, as extreme price movements often occur when liquidity is severely lacking, potentially presenting trading opportunities.
Trading cryptocurrencies is about repeatedly doing simple things. If you persistently use one method over a long time, you can master it. Trading can be like other industries where practice makes perfect, allowing you to make decisions quickly and effortlessly.
Follow me @加密大师兄888 to keep up with the trends and become wealthy together! Bulls and bears coexist.
