Don't listen to my investment advice! - Observations from a passive investor

The best investment lesson I learnt was when I lost $7200 on Savvis Communication back in 2000. The company I worked for at that time IPO'd a line of business and offered employees a chance to buy the stock at the IPO price of $24. There was great optimism in the market at that time. Everyone was raking it in.? Then burst the Dotcom bubble. The stock went from $24 to $0 in a few months. I was relatively lucky - it was money that I could afford to lose. Some other employees had taken big loans to buy the stock, buying into the IPO price hype.? This was however, not as bad as Enron where the rapid decline of the Enron Corporation devastated its employees' retirement plan, which was heavy with company stock, who were prohibited from changing their investments as the stock plunged - Employees lost 2.1 B in retirement savings. Close to 100% of their savings were wiped out.

If you don't study the financials of a company and subsequently don't understand how companies are valued, you are gambling, even when you are investing in the stock of the company that you work in. Consider not? buying into the hype.?

A couple of years back a? colleague had opened an investment account which her daughter was using to pick investments. This she mentioned was reaping good returns at that time. She has stopped saying that recently. ? A friend? was crowing over how much money he had made investing in Cathie Wood's ARKK. This has dropped more than 50 per cent since the start of the year, and more than 70 per cent since their all-time high in 2021 with a souring sentiment over speculative assets.?

Everyone is an investment genius when markets are going up. If your investment philosophy is based on short term or daily returns and anecdotes from friends and colleagues it may not be sustainable long term especially through market corrections. You will likely not hear the counter anecdotes on how much money they have lost - their ego will get in the way of sharing this.

Three big crashes have happened in the last 25 years

• The 2000? Dot Com bubble - Nasdaq lost 77% and took 15 years to recover. S&P 500 lost 25% but recovered? and reached new heights in 2007.
• The 2008: The Subprime Mortgage Crisis - S&P 500 loss: 57% and took 17 months to recover.
• The 2020: The COVID-19 Crash? where the Market lost 34% but recovered quickly.

and a big 4th one is in the making. In modern times there has never been another 25 year period with so many ups and downs.?

We have not learnt the lessons from the past and find new ways to speculate - from the Dotcom bubble to the real estate boom to crypto mania to NFT frenzy, it has never been easier for investors to invest so cheaply and conveniently. And it is getting worse. Apps like Robinhood allow fractional trading, have a clean UX for the gullible and know it all younger investors, don't charge commissions and make it easier to buy speculative assets. While misinformation has been? rampant in the markets in the past, easy access to it in online forums puts it beyond QAnon level.? While the cost of trading is at historic lows, the cost of losses unfortunately are not and consumers bear the brunt. Trading is becoming more about luck and less about skill for a lot of people.?

NFT's have been? all the rage recently. Sina Estavi, chief executive of a Malaysia-based blockchain company, paid $2.9M? for Jack Dorsey's first tweet NFT “just setting up my twttr",? in March 2021. At the time of his purchase, Estavi tweeted: “This is not just a tweet! I think years later people will realize the true value of this tweet, like the Mona Lisa painting".? Investors have poured billions into NFT related funds, and more crypto buyers are spinning up funds to back NFT platforms, projects and the non-fungible tokens themselves. www.curated.fund is backed by big players and? plans to invest in “blue-chip NFTs" like "Bored Apes".

Estavi is a true Oracle you might say, partly since he works at Bridge Oracle. WSJ however says that his Jack Dorsey NFT is now worth less than $14000 (link). An acquaintance who proudly listed himself as an NFT investor on LinkedIn does not have it there anymore.

Warren Buffett's Berkshire Hathaway has beaten the broader market so far in this down year. Berkshire's strategy has been all about investing for the long haul, making rational decisions and never pegging it to the short term. In his own words, the growth of Cryptocurrencies seems to be pegged on the next guy paying you more than what the last guy got.

He may be on to something. In the down market the price volatility of Crypto has been insane with drops greater than 50% for the most popular currencies. Bitcoin returns equal that of Sh*tcoin.? Additionally, the environmental impact of "creating" the coins, the computational power usage, regulatory risks and lack of transparency is insane.

People get into enough trouble with investments? they think they know something about. Unfortunately they seem to have no trouble investing into areas whose allure is magical, sometimes too good to be true.