Hi everyone, I'm feeling really depressed for the past few days. The Luna/UST debacle and watching the market continue to tank while DCAing is really getting to me. To clear my mind, I wrote this piece:

Lessons from a market crash

When the initial panic hits, it hits hard and fast. As soon as rates were rumored to rise, and especially when they actually did, the sell off was swift and massive. It continued down, with one dead cat bounce for a glimmer of hope, before it really crashed. In hindsight it looks so obvious, but the noise and headlines make it so hard to decipher what is actually happening. It’s funny how market action can actually add and remove hope and fear almost overnight. That dead cat was a rationalization that the rate fears were overblown, companies would still produce products at a high rate and people would be buying them. Even though this goes against all rational thinking.

As of writing this, most tech companies have been slammed anywhere from 50-90%. Most other traditional companies, like in the food, industrial or energy sectors, have not taken a big hit at all, which is really scary, because I can’t imagine the bloodbath that will ensue for growth companies if we enter a deep recession. I’m sure a lot of companies that look ok right now will be bankrupt within a few years.

The biggest thing I’ve learned from all this, is if I’m not prepared to sell off individual stocks when I think the bubble is peaking, I have no business owning them individually in the first place. I should be using index funds, and DCAing into individual stocks in a bear market, and taking profit on those as they run up. I let the fears of inflation keep me in positions that have now tanked at least 50%.

I also learned that even if I think I treat crypto as fake money, as soon as it’s wiped out, my feelings immediately change. The pit in my stomach is massive, watching 30k evaporate over night, even though I only put in a few thousand originally. There is nothing wrong with taking profits. I repeat – there is nothing wrong with taking profits.

I was severely humbled by believing in a project that ended up being a ponzi, even if it was a top 10 crypto. I managed to convince myself over the past year that I understood way more than I actually did, and as a result, I couldn’t listen to anyone who wouldn’t confirm what I already thought. It’s ok to let go and listen to others – follow the OG’s and stay humble. Unless I’m writing the smart contracts myself, I don’t know anything.

Even thought this all hurts, I try to stay positive. I’m thankful I’m learning these lessons now at 27, and not 10 years from now with a family and a mortgage. I will also (maybe) have the opportunity to build wealth with a true bear market, which I have never experienced. This is the time to keep my head down, DCA into index funds and really well run companies that are essential to every day life. Keep the ratio of index funds high. At least 50%. When the market turns around, and euphoria sets in, take profits. It will sting watching valuations continue higher, watching missed opportunities for 2-3x gains, but it’s the smart move. It’s ok to hold cash, even if the inflation is high. Even if I have to do it for a couple years, it’s ok.

Like taxes, building wealth isn’t about how much you make, it’s about how much you keep.

Above all else, be kind, and be wary of those who aren’t.