Hacker News Reader

Comment by Waterluvian | Hacker News Reader

I bought $100 of BTC a while ago for fun. I watched it go up and down and mostly up. I got bored, and sold it for cash to donate... literally an hour before the big spike just earlier.

I know about the fallacies of predicting the market. I understand 20/20 hindsight. But to actually experience it is such a strong lesson. To be flooded with, "ohhh I'm such an idiot!" and then think about how there's just no way I could have predicted this.

View on HN

The thing I've learned investing so far: never sell anything. It really only ever makes sense to sell if doing so will positively change your lifestyle, or you have no alternative.

Examples of when selling might be a good idea are buying a house, retiring, going through hard times, loss of a job etc. Rebalancing is fine too, but I'd personally only bother to do that if your portfolio is massively distorted (like it goes from 5% to 50% bitcoin in dollar terms).

Like you, I've sold Bitcoin before this year for no real reason other than I got bored. I've also partially sold shares in a company that went up 10x in value and reduced by TR to about 3x... again, no real reason.

If you want to speculate on the future just change where your new investments/contributions go.

Noo, you should not hodl something forever just because you bought it and it's precious to you. The thing about investing and stock market in general is, that people are constantly seeking the _best_ returns. If you have invested in something and it goes up by 10% in a year while a similar asset goes up 50%, you should probably re-evaluate your investment.

I have noticed that companies and investments do roughly divide into winners and losers. Meaning a currently well-performing asset will do well in the future. And a badly performing asset will probably suck still years to come.

One of the best things in investing i have done is selling my badly performing assets and buying some over-priced but well-performing assets. Sometimes the price is worth the hype.

You're subscribing to trend-following strategy, which is your prerogative, but if your 50% return "similar asset" is really similar to something you already hold, then why didn't you hold it already as part of a diversified portfolio? If you had you would have shared some of the gain, whereas jumping ship you may find you missed the boat.

If you are buying individual stocks, you can't really diversify your investments too much. I myself also enjoy the feeling of "getting it right" and only invest in companies that I absolutely believe in (and when that stops, I sell them). I don't hedge my bets by buying their competitors in the case they might do well too.

Just have to be careful that you aren't thrashing around and exchanging investments to quickly. For one thing, the tax drag, and secondly, I've put money into a variety of things and then taken it out, only to see the stock triple in value (various EV, certain companies after IPO)

I've noticed the same, and I find it kind of amusing because it is basically the opposite of the common advice of periodically "rebalancing" your portfolio

Normally people talk about rebalancing in terms of asset classes, not individual stocks.

> It really only ever makes sense to sell if doing so will positively change your lifestyle, or you have no alternative.

Hmm, but what about opportunity cost? I think the challenge is that it's impossible to know a priori what the "alternatives" even are.

> The thing I've learned investing so far: never sell anything.

I once believed this to be a truth that I had learned.

Then time moved forward, and I learned that it was not a truth. :)

Please enlighten us.

If you have been an investor (or startup employee) for less than 13 years, you may not have witnessed large paper losses that make a good argument against never selling.

More directly: We are in the longest bull market in history. It is not always like this.

I've learned that it makes sense to miss out on some upside to protect against the downside. This was a reversal of my previous beliefs, which matched the GGP's.

I make no predictions about the future here -- short term, or long term. Somehow we (the investor class) survived a year of enormous social disruption which should have decimated the market, at least. The popular wisdom says that the next year will bring (social) recovery and economic expansion. This might be true.

But I would argue against a blanket policy of never selling. I have ridden that train all the way to $0 (literally) more than once, and while I was not harmed by these decisions, they were objectively poor ones.

Everything you say is true, but right now there is no obvious way to protect against the downside except to sit in cash. If the market rallies for another 10 years we will all look rather foolish doing that.

Yields are falling across all asset classes, and correlations between them are growing.

The overriding feeling no matter how much analysis you do is that nobody has a bloody clue what is going on.

You're right. And the real takeaway is "it depends".

My "smartest" investment decisions have been never following through on plans to sell, after thinking "This can't go on forever".

(The same can be said for my dumbest decisions though!)

I remember reading here on HN, back in May or so, someone saying that they pulled everything out of the market in March, and avoided huge losses.

Sounded smart at the time. Luckily, I was not that smart!

I guess it is wise to sell when the market is greedy and buy when it is fearful, as long as you have the foundations in check.

I am more of a holder usually as well, unless I truly believe the price is so overvalued that it would take a lot of time before another full dip-rally cycle.

You make a very good point. Having your investment money separate from operating funds is a key to having continually growing investments.

Money from the sale of an asset should only be used to buy other assets until you reach your personal wealth target.

I sold because it's an open tab in my life I don't care about anymore. I don't like having open tabs I forget about everywhere.

I am very familiar with this concept, and feel similarly to you - but never thought of it as "tabs" (I assume you intend browser tabs, like I do?). It's a brilliant metaphore.

I mined some bitcoins when they were worth around 5€ and sold them when they were around 300€. I still made a profit. Don’t try to hang on the things that could have been, but concentrate on the good things that happened. I bought some nice headphones from that money I still use and which make me happy.

Which is why you should always separate a transaction into smaller chunks - you could liquidate 20% of a position once per week.

Now would be a great time to cash out

You do illustrate exactly why no one should ever buy a Tesla in bitcoin, because it isn't currency, it is more of an asset like Gold. So why does Elon say that people will buy Tesla's in BTC then?

Because there are massive tax benefits to purchasing something with bitcoin. What other asset can be turned into a hard good without realizing a tax on appreciation?

Huh? Every time I spend bitcoins I pay capital gains on the amount I spend.

If you don’t, you are committing tax fraud.

Not sure about other places, but the UK and US treat this situation as equivalent to a sale of the cryptocurrency. Capital gains tax may become due.

One should not ever sell Bitcoin, because it's a deflationary coin. Circulating Bitcoin is just lowering its value.

Only if you assume that demand cannot go down.

Except of course that if you never sell it, its value has magically dropped all the way to zero, which is even lower than the value you would have gotten from selling it.

Well either you sell it someday or it doesn't have any useful value.

Also this logic only applies if you assume there's no crash down the line.

Reply on news.ycombinator.com