Many bipedal investors often chant a word: “buying the dip.”
“I will sell my house and go all in when Bitcoin drops to 80,000!”
“Ethereum drops below 1000? Then I must sell everything to invest!”
“If Nvidia drops below 80 and Circle drops below 60, I will sell my blood to buy the dip!”
This kind of voice is heard endlessly in the market, as if “buying the dip” is the ultimate holy grail of investing, the only key to financial freedom. However, in my view, this obsession with “buying the dip” is not only a cognitive fallacy but also a profound self-deception. It exposes multiple flaws in investors' cognitive frameworks, capital management, and investment philosophy.
Today, I will use my cat paw to peel away this layer of illusion and analyze in-depth why 'buying at the bottom' is a dangerous and erroneous concept.
1. The essence of 'waiting to buy at the bottom': you fundamentally do not believe in its future value.
This is the most core logical paradox; let’s use the fish that feline friends love as an analogy:
If through detailed research (including the species of fish, origin, freshness, market supply and demand) you reach a definitive conclusion: this salmon will be worth 100 cans in the future. Then, when the current market quote is 20 cans, what is your rational decision?
It is to buy it immediately, decisively, and without hesitation! Because this is a ready-made deal with a profit margin of up to 5 times.
But in reality, your behavior is: 'I will wait a little longer; maybe it will drop to 10 cans.'
The subtext behind this behavior is very obvious: you do not really believe it is worth 100 cans. Your 'waiting' itself proves your lack of fundamental confidence in your own judgment. You are just participating in a gamble about luck and timing, betting on a 'better price' that you cannot predict, rather than executing an investment decision based on value judgment.
True investment is buying when the price is below intrinsic value. Since you have concluded that '20 cans are below intrinsic value', yet you choose to wait, this is logically self-contradictory.
2. The delusion of 'precisely buying at the bottom': attempting to outsmart all market participants.
'Buying at the bottom' itself contains a fatal arrogance. Its subtext is: 【you must buy at a better price than anyone else among all market participants.】
Is this possible? Almost impossible.
The market is a complex system formed by the joint efforts of millions of participants. Trying to accurately predict the lowest point of all emotions in this system is like a cat trying to predict which cloud will rain tomorrow. This is not investment at all, but divination. Occasional successes are purely luck, and a strategy relying on luck will inevitably fail in the long run.
Your goal should not be to 'buy cheaper than everyone else', but rather to 'buy cheap enough to make this business worthwhile'. This is the essence of investment — trading with asset value, not competing foolishly with other investors.
3. The fallacy of 'all in/fully invested': liquidity is the essence of investment.
Many investors' biggest excuse is: 'I have already gone all in, I have no money to buy at the bottom.'
This is a static, rigid way of thinking. Remember: you are a living being, a person (or cat) capable of continuously creating value, not a jar that is sealed after being filled with water.
As long as you are still working and generating income, you will always have new cash flow. Today's 'fully invested' will no longer be so when tomorrow's new income arrives. You will always have the opportunity to continue buying at a better price.
Even if you do not have active income, you can allocate part of your funds to 'interest-generating assets' (such as government bonds, stablecoin investments, REITs, etc.), allowing this portion of assets to generate continuous cash flow, and then use this cash flow to invest in risk assets. This is equivalent to letting your money 'work', and then using the money earned from 'working' to seize opportunities. *This way, you will also never fall into the 'fully invested deadlock'.
'No money to buy at the bottom' has never been a problem of the market, but a failure of your own **cash flow management and asset allocation strategy**.
4. The truth of investment: ignore fluctuations, focus on 'worthwhile business'.
Let us return to the simple principles of investment: it is like doing a business deal.
An apple, after your research, you know it is worth about 5 yuan. Now a vendor is willing to sell it to you for 0.5 yuan for various reasons (perhaps they are in a bad mood, or they urgently need money). Is this a good deal? Of course! You should buy it right away.
Later, you find that another vendor is even worse and is willing to sell it for 0.2 yuan. Does this prove that you made a mistake buying it for 0.5 yuan? Absolutely not. It only shows that the market can sometimes be crazily beyond anyone's imagination. Your transaction at 0.5 yuan is still an extremely worthwhile deal, and the appearance of 0.2 yuan just means you encountered an even bigger bargain.
Whether your decision is correct depends solely on whether the transaction you made when you bought was 'worthwhile', that is, whether the price was significantly below your estimated intrinsic value. It has nothing to do with subsequent price fluctuations. If it drops afterward, you can buy more happily; if it rises afterward, it proves your judgment was correct.
Your focus should be on the 'cost-effectiveness of the business', rather than 'whether I bought at the absolute lowest price'.
5. Understanding the practice of coin cats: Why do I still hold Bitcoin?
Some readers may ask: 'Teacher Cat, you’ve said so much, why do you never take profits and always hold Bitcoin, experiencing so many cycles of bull and bear?'
The answer is simple: because within my valuation framework, the price of Bitcoin has never reached the 'final intrinsic value' I estimated for it. Not once.
I have never sold, not because I tried to 'buy at the bottom' or 'sell at the peak', but because 【the selling conditions have never been triggered】 (i.e., the price significantly exceeds intrinsic value). My holding behavior itself is the practice of the concept of 'not taking profits, not buying at the bottom, only focusing on value'. Every time I buy, it is at that moment when I believe 'the price is below value' for a worthwhile business. As for whether it rises or falls afterward, it does not affect the correctness of my initial decision.
Summary: From the 'illusion of buying at the bottom' to the transformation of 'value investors'.
Dear bipedal friends, please put away your obsession with 'buying at the bottom':
1. Give up the fantasy of precisely predicting the bottom; that is the work of deities, not investors.
2. Examine your beliefs; if you are waiting for a lower point, please confront your inner uncertainty.
3. Manage your cash flow well, let it become the living water that ensures you never run out of ammunition.
4. Focus on whether each transaction is 'worthwhile', be friends with the value of assets, not enemies with the emotions of the market.
The ultimate wisdom of investment is 【manage yourself, keep track of your accounts, and run your business well】. The market never sleeps, opportunities are always there, but they are only reserved for those independent, rational, and always prepared minds (and cat paws).
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Focus on understanding coin cats, and together be the clearest 'value cats' in the cryptocurrency circle.
