First of all, it should be explained that the rate of return and the absolute amount of return of value investment are much higher than those of random speculation. First of all, from the market value rankings, except for xrp and ada, which are historical relics, each of the top ten projects by market value represents a wave of wealth opportunities. From the surface, each target has a very solid reason for rising, even doge. As we all know, the temple is small and the demons are strong, and the pond is shallow and there are many turtles. If you want to make a lot of money in a garbage plate of hundreds of millions or billions, it is tantamount to seeking the skin of a tiger. So from the original intention of making a lot of money, you must invest/trade in a target that is destined to have a future. This is the true meaning of value investment. This is also the reason why I am indifferent to the target on the An increase list that rises by 50% within a day.

The correct approach to value investing:

The first rule of value investing in the crypto market: Sell even the best stocks:

More than 90% of the funds for altcoins in the crypto market are speculative funds, and most of them are retail investors. The main way to realize value is to pull the market, which causes irrational unilateral fluctuations in a short period of time: a 5-10 times increase in a single month. The first thing to do under the huge increase is to lock in the profits regardless of the future of the target. The goal of stopping profit should not be to sell at the highest price, but to sell at the end of the main increase. By the same token, after a huge increase, no matter what long-term benefits such as dividends, destruction, and new listings are launched by the project party, they should be sold immediately. Such long-term benefits are often difficult to cover short-term downward losses, which is a typical case of "fellow villagers don't leave".

The second value investment:

If it is not in the underestimation cycle of externalities, or the target fluctuates, stop loss in time:

Many value coins are bound to plummet in a bear market, but the reasons for the plunge should be distinguished. If it is just because the overall market is dragged down, you can add positions and hedge at a low point to reduce book losses. If the price of the coin falls due to increased selling pressure on the product itself/changes in fundamentals, you should sell immediately to stop losses.

Value investment target buying options:

Let me share my humble opinion: value investing is the realization of the cognitive differences between the main force and retail investors. The main force builds a position at a low price, and then uses its financial and traffic advantages to raise the price of the currency, and retail investors take over. This is the entire buying and selling process of value investing.

Based on this principle, we can draw three points to choose the target of value investment:

1. Choose potential stars in the big track of rigid demand: The top 20 currencies by market value are basically public chains and platform coins. Only by benchmarking against elephants can you harvest horses, but by benchmarking against horses, you may only harvest a donkey. Pay attention to industry investment research materials and observe which tracks may grow elephants. Now it seems that there are only five major categories: public chains/L2/derivatives exchanges/games/NFT infrastructure. In principle, you can ignore them before there are major successful cases of innovation.

2. Involvement of capital and celebrity founders: Capital and celebrity founders provide the two most important factors for the success of the crypto market: capital and traffic. Capital is the hard chips for high prices, and traffic is the lowest-cost way to drive the world. After seeing the crazy rise of Dogecoin, you will definitely not doubt this statement.

3. The chips have not been distributed on a large scale at high prices. If they have been distributed, it is best not to be retail investors’ belief. If the price of the currency falls, but retail investors still have firm faith, then it must be a tragedy. This sentence is definitely the blood and tears of value investors in the currency circle. Let’s take a look at the example of EOS. The effect is better when the K-line and the quotation are taken together.

When buying value coins, ask yourself a question: if the value coins that retail investors are buying crazily do not rise, then who is selling? If the bottom chips are all in the hands of retail investors, then who will pull the market?

Standard value investment traps: dot, fil, atom eos, please avoid them. Common characteristics: large-scale distribution, retail investors’ belief, chaotic K-line, and ultimately failure to achieve great things.

Here is a reference idea for value investing: In the third quarter of 2021 to the first quarter of 2022, look for large-scale projects with strong demand that have received large investments and were directly killed by the downward market. The development progress and early selling pressure can be fully digested in the bear market. Buy them in 2023-24 based on the development progress. I believe that there will be amazing performance when the bull market comes.