Finding the fat pitches
My goals for the second half of 2023
Following last week's post where I reviewed my performance in the first half of the year, I will now write down some goals for H2 to hold myself publicly accountable.
This way, I can ensure that I don't spend the next six months getting distracted by irrelevant things, such as which influencer promotes a casino with slot machines instead of a casino with pictures stored on centralised servers masquerading as NFTs.
So anyway, if you are one of the four non-immediate family members who read this, please help me by sending abuse my way if you see me being lazy or skipping any of the targets mentioned below.
Portfolio Allocation Focus:
Do less to achieve more.
It feels weird to set a goal of doing less, but I believe it will benefit me the most. In non-up-only times, over-trading personally hinders rather than helps me.
I must remember that I am not a savant and cannot predict the future. I have no clue if a meteor will hit tomorrow and the price of Eth will plummet by 95%.
Even if it does, I'll be dead, so why worry?
My general thesis is that prices will go up. Crypto is not dead. America has not killed it. Gary Gensler is weakening. The bankers are coming for our coins.
The greatest risk, therefore, is being underexposed to the industry I write a weekly blog about and spend more time online talking to random strangers than with any member of my family.
My descendants would be ashamed of me if I spent nearly a decade in crypto during the greatest financial revolutionary opportunity in human history and squandered it by going to stables because some mid-tier American political bureaucrat said something mean about my digital tokens.
My main focus for the next six months is to ensure that the majority of my portfolio is positioned for UP without taking on additional platform, key, or leverage-related risks.
In my mind, all I need to do is maintain this base-level portfolio until the average IQ drops 75%, take advantage of the free money on the floor, and reduce my exposure when the crypto hype reaches the same level as AI hype today.
Current allocation:
Roughly 45% long-term BTC
Roughly 45% long-term ETH
10% active ETH/SOL/PEPE/STABLES used for day-to-day trading. Profits from this allocation will be converted to real money to extend the time before I need to get a normal person job again.
As new focus projects launch a portion of my long term holdings & the active 10% of my portfolio will rotate into wherever presents the greatest risk adjusted upside.
Project Focus Areas:
I have two projects that are super high conviction that will be launching in the coming months:
I love these projects because they are both contrarian in their own ways, and if my thesis is proven correct, their total addressable market and possible use cases will be significantly larger than almost every other area in crypto.
I have written an in-depth thesis on why both of these projects are great, and as time passes, my conviction in them only strengthens. (links above)
My main ambition here is to capitalise on as many opportunities as possible in these ecosystems upon launch and ensure that when the time comes, I size my bets correctly to match my conviction levels.
Stanley Druckenmiller talks about waiting for fat pitches.
If these projects launch at the right price, they are my fat pitches.
Researching Promising Areas:
While the wider world believes crypto is dead, I genuinely believe that new avenues will emerge that will onboard millions of new users.
To take advantage of the quiet period, the next six months presents a great opportunity to strengthen my knowledge, and develop at least some semblance of a thesis that will guide my investment strategy as we move into more positive environments.
Some of the initial areas I'm looking into are as follows:
The intersection of AI/Crypto (identity products, zk, and compute)
EigenLayer, LSTs, re-staking platforms, and their wider implications for the space
Crypto gaming & NFT development: Now that proper infrastructure is being built around this field, I expect novel use cases to appear soon
Crypto gambling sites: Observe their development, with a particular focus on decentralised prediction markets
Determine how projects will incentivise users as sybils become more prevalent and prepare for this new world
There are too many other niche areas here to list, but essentially the measure of success is ensuring I’m up to date on any major trends and to have considered the potential outcomes to an extent where I can profit regardless of the direction Crypto chooses to go in.
Basically, don’t become an (insert micro category here) maxi. Have a breadth of knowledge across the space and be nimble enough to jump into whatever narratives attract the hot ball of money.
I've seen many excellent traders' portfolios get destroyed because they were unable to pivot from NFTs, DeFi, or Alt L1s when the winds of change were blowing.
Day-to-Day Trading Goals:
My trading goals are very simple, and I believe they need improvement in three main areas:
Ensure that every trade has a completed probability matrix before execution.
Allocate less time to reading Twitter and more time to reading technical documents, blog posts, and listening to long-form content to discover genuinely novel projects that are three months or more away.
Avoid trading out of boredom and stop trying to force opportunities that don't exist. Be patient and seize the free money on the floor a few times a year.
Life Focus Areas:
The most important goal for the next six months is to prioritise both physical and mental health.
There's no point in sitting at a computer screen for 16 hours a day when the opportunities don't justify the physical and mental toll.
I perform better when I am in a positive and healthy frame of mind, so my number one priority is exercise and health.
Long cardio sessions are perfect for thinking through difficult and complex topics and relieving stress. Regardless of what happened the previous day, I have never returned from a 2+ hour run in a bad mood.
My ambition is to tailor my workouts so that when the time comes to get my head down and focus on Crypto all hours of the day and night I have the mental and physical fortitude to maximise every possible opportunity.
Current fitness regime:
Gym-based strength sessions: 4 times per week
Cardio-based running sessions: 3 times per week
Goals by 31/12/2023:
25% increase in major lifts
15% reduction in 5k time
15% reduction in half marathon time
5 kg increase in body weight without increasing body fat percentage
This Blog:
I’m not going to set any numbers based targets for this blog.
First and foremost it's a tool to help myself learn, grow, develop and think through what I’m actually doing in this ridiculous space.
If people happen to read it and find it interesting then that's a great bonus, but I’d never class myself as a writer.
I’m still committed to publishing something once per week and that will continue until the end of the year. I’ll try to add in a mix of analysis based articles, random life and philosophical thoughts and general observations on the Crypto space.
Even if no one ever reads it, I do get some level of satisfaction in looking back over the vast array of words I’ve written that never make it to Substack, and seeing the tangible words based output from a significant number of hours spent on something that doesn’t solely make my P&L go up or down.
In Summary:
My first observation is that if I set these kinds of objectives in any of my old corporate jobs, I would likely be sent straight to HR and probably given a stern warning because they don't meet the SMART criteria.
But since I no longer have to deal with that kind of stupid political pandering to leadership and jobsworths, I don't really care.
To be brutally honest, my main aim for the next six months is to stay up to date and engaged with crypto.
I've written about it many times before, but this space is literally the greatest wealth creation environment ever to have existed if you are in the right place at the right time and have a little bit of luck.
The reason many people fail is that they blow up by over-trading or leave the space when things get less interesting. Those who show good risk management, stay behind, and put in the hours, get called lucky years later when those with goldfish-like attention spans return.
I want to be one of those they call lucky in a few years' time.
Here's to a great rest of 2023.