Source: Daoshuo Blockchain

In addition to fixed investment and steady holding of BTC, ETH or other copycats, will they also use part of their positions to sell high and buy low? Or should all positions be sold in batches when the bull market is believed to be booming?

After seeing this reader’s message, I remembered the experience of a very successful senior investor Li Lu that I read some time ago.

Before introducing Li Lu, let me first reply to this reader’s question.

I regard fixed investment and steady holding and selling high and buying low as two operations: one is medium and long-term, and the other is short-term.

As far as my own practice is concerned, basically since I entered the crypto ecosystem, all the varieties I have invested in have not been partly fixed investment and partly sold high and bought low.

I hold it all the time for most of my operations.

So my investment methods are medium and long-term (steady holding), not short-term (sell high, buy low).

As for the varieties I hold, if I find that there are problems with the team or the project itself, I will not hesitate to throw them all away.

If I thought the price was too outrageous I would throw it all away.

There is another situation: I am not sure how the project will develop, but I do not find any serious problems with the project, so I will reduce my position.

In the past, I did not have any strong philosophical support when doing this operation. Perhaps this motivation just came from the experience of failure in short-term operations.

But when I saw a self-narration by Li Lu a while ago, I found a resonance with my way of operating.

We all know the two old gentlemen Buffett and Munger. Li Lu can be regarded as Mr. Munger’s long-term partner and friend. Many of his own insights and experiences in investment have been deeply influenced by Munger. If you read more news or books about Mr. Munger, you will definitely see Li Lu’s name.

Li Lu’s self-report mentioned his experience in short-term operations.

There was a time when Li Lu believed that the long-term holding operation method was too inefficient. One band after another and price difference slipped away under his nose, but he remained indifferent.

Failure to seize these opportunities not only wastes opportunities but also greatly reduces the efficiency of the use of funds.

So Li Lu began to let go and try a more flexible operation method: part of the funds were retained and continued to be operated according to his familiar long-term holding method; the other part of the funds focused on short-term operations, and also used Various financial instruments (long, short, etc.), in short, try to make the use of this part of short-term funds as efficient as possible.

This kind of operation that does not affect each other and gets the best of both worlds looks great.

After some time, Li Lu conducted a thorough inventory of his operations during this period, and he discovered the following problems:

- These short-term operations did make money. After getting the money, the income is not bad;

- But because of timeIt was inevitable that some of his energy would be diverted to short-term operations, causing him to miss several good projects that he was originally very optimistic about but did not continue to study and track in depth due to lack of time;

-Those that he could have bought earlier The benefits that can be brought to him from good projects in the future are far greater than the benefits that he can get from doing short-term;

-His attention and depth of thinking are not as good as before doing short-term.

To sum up, he felt that this short-term experience resulted in more losses than gains.

Since then, he has completely abandoned short-term operations and focused on the long-term holding methods he recognized.

The same is true for his requirements for investors in his fund: If you don't recognize his long-term investment method, don't invest in him.

I deeply agree with Li Lu's feelings, but my results are not as good as those of my predecessors - in fact they are very bad.

My experience of swinging, selling high and buying low, is unbearable. Although I enjoyed the fruits of victory from time to time in the process, in the end, the total income was disastrous.

So later on, I was completely insulated from short-term operations. I would rather spend the time and energy on these operations to read various materials, read various reports, and have a deeper understanding of the projects I am interested in.