The continuous evolution of risk-return cost-effectiveness in crypto holdings

Value investing also tends to be reluctant to sell,

It’s not that stock traders think prices will go higher,

It’s that the risk-reward ratio of the holdings is high, so they hesitate to sell.

The main risk of value investing is the loss of principal and accepting losses,

Therefore, before buying stocks, one needs to have a certain understanding of the margin of safety,

Then buy stocks with a high margin of safety,

If the company’s operations do not meet expectations,

Price risk is mitigated because the margin of safety provides enough buffer in advance,

Losses are not too large.

Receiving dividends during the holding period can reduce costs,

Which is equivalent to lowering the risk of the principal,

This is very good.

It’s correct for value investors to take dividends,

But they also need to pay attention to the long-term sustainability of the company’s dividends and financial health.

The main reason for selling stocks in value investing is to maintain risk replacement in low-risk areas,

If you have the ability to buy near 50% of the price,

You should sell near par value,

This way, over three or four years, you can achieve a double return through arbitrage; the risk replacement in low-risk areas is the main reason,

We haven’t yet discussed the use of double returns in medium-risk areas above par value; the risk replacement in low-risk areas is the main reason,

And then retreat from the medium-risk zone above par value.

For example, seasoned value investors do not apply take-profit or stop-loss strategies,

Because stock prices are an external judgment factor,

If combined with internal value outlook judgments,

Stock prices may have risen significantly,

But the internal value outlook has improved even more during the holding period,

Then it’s appropriate to gradually accumulate shares; conversely,

If stock prices fall significantly,

And the internal value outlook worsens,

A decisive loss acceptance is also necessary.

Thus,

Value investing does not necessarily mean buying when prices fall,

And selling when prices rise.

Of course,

Buying more when prices fall significantly,

Generally, the long-term internal value outlook remains roughly the same,

So buying downward becomes increasingly cost-effective.

When stock prices rise significantly,

It’s often wise to sell part of the holdings first,

Reducing costs and boosting psychological confidence.

Value judgment is an independent thinking quality process,

High-quality independent thinking,

Leads to high strength,

Lower probability of luck,

Patience to wait for good opportunities before acting,

Buying good stocks and patiently waiting for price recovery to gradually execute risk replacement arbitrage.

In summary,

Long-term value investing is about capital allocation to excellent risk-reward assets in low-risk areas,

Based on the investor’s own independent thinking,

Based on the evolution of the investor’s own safety margin considerations.

**$ARK **$LSK **$VANRY **