US stocks plunged tonight, and the crypto market was even more bloodied. If you agreed with my weekend comments and took action, you could still preserve a lot of profits today. Just saw @Jacques bro CRCL cut losses at 100 and exited, which suddenly got me thinking.

Last year, CRCL dropped from 180 to 110, then rebounded from 110 to 160. Bro’s cost was 130, so he could still make a decent profit. I repeatedly advised him to reduce his position and exit when he had profits. Never thought CRCL would drop to 50 and he’s still heavily invested.

Not sure if today’s chat with him prompted him to cut losses, though I didn’t advise him to do so at this price. I’m sharing my thoughts for everyone’s reference:

Don’t fall into the fallacy of composition where ‘I must be right.’ Sometimes, stopping losses is more important than locking in profits. Learn to reconcile with yourself.

For leading stocks, like the Magnificent Seven, you don’t need to study fundamentals or other messy stuff. Just buy in batches when they drop more than 20%, buy more as they fall, and hold stubbornly even if you’re trapped. This is the collective result of countless smart people and top institutions voting with their money. Even if you don’t believe in yourself, believe in the choices of smart money.

Small-cap stocks are all about sentiment. Unclear expectations lead to wild price swings—either you make a killing or get killed. Play small-caps with a speculative mindset. Only after securing enough profits and having a safety cushion to weather volatility should you talk about value investing. Before that, stubbornly holding is just pushing yourself step by step into the abyss.

Second, investing requires stepping out of your own account and objectively observing changes in the external environment. Adjust your strategy promptly instead of stubbornly denying external changes, like an ostrich burying its head in the sand.

BTC has halved from its October peak of 125k to today’s 63k, yet many still refuse to believe in crypto’s four-year cycle theory. But what’s the use of disbelief? The cycle is already happening in real-time. Escaping reality won’t let you escape its consequences.

Personal opinion, not investment advice.

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