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Comment by gwbas1c | Hacker News Reader

> why did this guy put his life savings in a crypto

Good point, (which was my first reaction.)

But consider this: If, when you were young, you bought a few $1000 of Microsoft stock, Apple stock, Google stock, ect, when they went public, that investment could have grown to be the majority of your life savings.

Perhaps dawidkabani13 just happened to buy some tokens at the right time? A lot of people don't save.

Otherwise, this is a good example of why dumping all of your life savings into cryptocurrency is irresponsible.

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Part of managing an investment portfolio is making sure it remains suitably balanced.

If you bought $100 of crypto back in 2008, then when the price swung rapidly and it became a substantial proportion of your net worth, you probably should have thought "I only invested a token amount as a joke. Has anything changed since then? If not, I should sell all except the token amount I actually intend to own".

> If you bought $100 of crypto back in 2008

That might prove more difficult than you'd think.

> But consider this: If, when you were young, you bought a few $1000 of Microsoft stock, Apple stock, Google stock, ect, when they went public, that investment could have grown to be the majority of your life savings.

And if you did it in lots of other promising stocks at the same time, it would have been a major error.

If you have reliable information from the future, sure, it makes sense to dump your life's savings into one basket that is going to pay off. Or if you are young and your “life’s savings” is a trivial fraction of even your annual surplus income, it might make some sense to take an all-in risk speculatively. But, generally, it's a bad idea.

Yep. To give a specific example, a lot of people (many of them employees) had a significant portion of their savings in Enron stock.

Well, putting all your eggs in one basket is never a good idea.

But when it comes to investing, a little knowledge of economics and a good sense of smell goes a long way.

I suppose that would be an example of "easy come, easy go" similar to if someone rode a stock way up and then it crashed. It does make sense to lock in profits at some point but, of course, you may not maximize your profits that way. Certainly there are stocks I've made modest gains of that would have been big wins had I held.

All you need to do is sell enough to recoup your initial investment and expected profit, and then treat the rest like gambling.

Let's put aside the comparison of cryptos and stocks for now.

It is absolutely valid to do risky investments. Just as others have written you don't do them with your live savings. I really thought people would know that by now.

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