Yo so what's the big deal with being over-diversified?

You should not build your investment strategy based on 2 posts on biz. Balancing a portfolio is a risk/reward trade-off that you should research and consider properly. It depends on how large % of your total net worth is in crypto, how much you are willing to risk.

I agree that it is a bad idea to just shotgun into random shitcoins and combine that with a HODL meme, that way you will be poor when 50% of those coins go to 0, but holding several high quality coins is not bad. It is riskier than the stock market but can give you way better returns, even if it is not 1000x in a year.

Personally I have some core holdings that I plan to hold throughout 2018. I then have some extra capital that I put into more speculative coins, at most 2-3 at a time. These I keep up to date with news and prices and trade more often. If I would take a break from crypto I would sell these for fiat, ETH or BTC and just keep my core holdings. DYOR kid.

You're overthinking it OP. Go all in on Link and wait a year

you guys would probably shite your pants if you saw everything i've gotten into haha. my MASSIVE portfolio of shitcoins haha! But hey, I'm learning by doing/as I go. And strange things happen so maybe my hairbrained approach will work out with some dumb luck. Breaking all the "rules" but whats the worst that could happen- i lose my initial investment entirely. and I had to be prepared to do that before i invested. i'll be pissed if it happens though. but it will be ok. but still lambo dreamin sigh.

There's nothing wrong with it, Veeky Forums is just actually retarded and everyone thinks they know what coin to go ALL IN

Tell me op. How many coins do you have

And thank you everyone for the replies and advice and comments. it's much appreciated :)
and for the record, i do DMOR. It may not be the right research from the right sources, but I do try and make somewhat educated choices with all this.

This dude is just messing with you, how easy can you be? No surprise you retards fall for insider LARPs.

34 different coins (or parts of coins / small amounts of them)

It's because if you only have 500-2000 or so dollars in the game and you've spread it between 50 coins you won't make any real money even if one moons. 100 dollars in each coin so if it moons 10x you only make $1000, aka nothing.

Pick one or two good coins and put everything in that and hope they moon. Instead of being a retarded basically portfolio larping faggot

which dude is messing with me? i don't even know what larp means you larp.

fair point on the first part and that is my worry. but i guess it's too late now! but i'd be stoked making a 1000 or 2. This is just a hobby i find interesting.

However if anyone wants to chime in with some positive notes of encouragement / false hope, please do!

You didn't describe the flaw with diversifying, you described the flaw with investing via dartboard without doing research. Like no shit putting your money into random shit and just hoping it moons is a bad idea.

I wouldn't say I'm putting money into random shit. I may be putting it into shit I'm getting shilled on and is actually shit- but obviously from my shit research I'm putting money into it because I don't think it's shit. I may be naive/misdirected/poorly informed/being foolish- but I'm certainly not a fool.

Question for you guys... I'm curious how much your portfolios are currently up/down percentage wise?

>larping a lark

>lurking under a tarp?

Everyone itt is retarded
3 reasons:
1) you aren't really diversifying your risk just investing in the crypto market as a single entity.
2) you can not feasibly follow every project.
3) You can eventually end up investing in suboptimal coins

Now lets break down diversifying.
If there are two investments with the same risk threshold but one has a higher EV you should invest soley in the latter to maximize payout.
HOWEVER humans are risk averse and EV doesnt equal Expected utility. For example, if two coins are $100, one has a with a $100 chance of staying there, its a better investment than say, one that is $50 with a 50% of doubling and a 50% of hitting zero. While the adrenaline rush of the gamble makes the latter appealing to bad investors the former is a better investment. Because losing all your money hurts more than doubling all your money, even though the expected payout is the same. Now you can move Expected utility closer to expected value with risk pooling. This is essentially how insurance works. If we ran the second option through a computer 10000x times we would likely close to the same return as the first option. This is where diversification comes into investing. Its like in poker when they ask to run the river again in cash games. If two probability functions are independent of each other, you are removing risk. So for example if you can find two investments that are completely uncorrelated with the same E(v) and E(u) your expected return is the same, but your risk is now lower. So for example, if I say hey if I flip a coin you 2.1x your money in heads, lose all of it on tails, you should only do it if we can flip it insane amounts of times and take an aggegate. The expected payoff is the same, but your chances of losing your money lower. Anyone who tells you not to take to many flips is a gambler not an investor. However all crypto has a high correlation so you should diversify beyond just multiple coins.

All in is a crypto meme. No serious investor would ever suggest going all in on anything. Diversification is about balancing risk. Invest in coins you believe have long term value. Only put a small amount 10/15% on moonshots. Don't let Veeky Forums fool you, some people get lucky and hit it big with the all in method, the majority will loose long term.

>If there are two investments with the same risk threshold but one has a higher EV you should invest soley in the latter to maximize payout.
Err should mention I meant to maximize EV, and that your aim is to maximize utility not value. You can take a lower EV option with identical risk structures but low to no correlation to better risk pool and thus maximize expected utility.
.

Thanks for the detailed info. Will do more research into some of the things you mentioned :)
So it sounds like you're not totally anti my strategy and don't think I'm completely retarded for being all over the place?!

Yeah I see all in as being too risky and what could take me out of the game completely. Which is exactly why I went the opposite route. Which may ultimately burn me, but at least keeps me in the game longer. I like playing.

I recommend looking into Modern Portfolio theory. I really don't know enough to know if you are "overdiversified" But crypto doesnt have insane fees associated with overdiversification at least. Just understand too the high correlation between different cryptos magnifies differences in values, making some purchases leas justifiable. For example if the expected value between an idk agricultural stock and a coin at the same risk is significantly different diversifying into both would have a higher utility than say two coins with the same risk but different expected values, because the risks of the two coins have high correlations. What causes Shitcoin X to go down might likely also bring down shitcoin Y, making the lower potential payoff harder to justify as an investment. Whereas an agricultural stock probably won't be influenced by crypto at all and vice versa. Likewise with dependent peobabilities. If coin X depends on coin Y, coin Y needs an insane potential payoff difference to make it more justified, and moving some of X into Y isnt helping diversify. But its not necessarily bad to hold both either depending on risk targets.

Try to find a balance, over-diversification will also hurt your gains but not in the same sense as all-ins completely wiping you out. Moreso that you will be missing potential profits. Try to find 5-8 coins and stick with them for a while. Rebalancing after coins have a run can also net you nice additional gains. You could also try trading between your stack but start with a smaller portion of your stack and have a clear strategy before you make your trades. My best advice for trading would be to learn to take small losses, don't let them grow to be big losses which end up being heavy bags.

>have $500 evenly distributed with 5 coins
>1 coin moons 30%
>you get $30 instead of $150
It's safer, but if you are in this to make money, you don't want to play it safe. If you spread yourself thin on a bunch of shitcoins you will more than likely end up breaking even at best.

Here's my portfolio right now (some of the coins were early 'mistakes' and not currently stoked on but whatever). The graph is in general on upward trend though. Today not a good day- but overall the trend hasn't been terrible. Winging it and attempting to figure things out as I go.

biz is like finding an amazing textbook lying on the ground but a lot of the pages have dogshit on them

Good advice. I'd also like to add that consideration should be taken to where your coins are from. We've seen recently how negative media can affect price (Korea/China), so make sure coins are spread across a range of countries.

Will look into it, thanks. So you suggest diversifying beyond crypto and into other investment arenas to minimize that correlated risk? Or are you talking about this as strategic diversification within the crypto sphere?

That's good advice as well, thank you. I haven't been taking any small gains when I might like to just to avoid having to deal with tax accountability stuff which would make it more trouble than it's worth. And it's little quantities of things so don't think my bags could ever get very heavy either way but I suppose I should be thinking about dumping certain things that I don't dig so much anymore and have been at a loss. But i guess I'm hoping that they will go back up at some point!

Yeah that's a concern. Of course I want to make money! But I guess as this is more so a learning experience, then breaking even isn't a bad deal for getting a broader outlook on the climate and way things work and then maybe will know how to be risky in the right way at the right time.

If you are investing among too many relatively equal coins and that makes you "break even" or lose money.
You aren't investing you are gambling. Not that I am one to judge, i treat crypto as a gamble half the time anyway.
Both? Depends on what risk you are trying to take but yes. I also just meant that diversifying in crypto can sometimes be harder to justify because of the high correlation and the real world scenario that no two investments have the same expected values. For example if there are two cryptos. They share all the same risks and price movements, but one has potential to moon slightly more you would logically go all in on that, because correlation equals 1 meaning you avoid no risk going on the other one. Whereas most securities dont have anywhere near this risk, so even if a stock is a worse investment because the risk correlation is low you can justify buying it. I mean correlation is mever 1 or 0. Just understand its harder crypto has insane correlation.
You can use that as a parameter in trying to figure out correlation sure. Maybe volume over country of origin(or both) but good advice.

Lol tru dat. This seems to be a non dog shit thread though! Feel I've received some genuine pointers here and been given some insightful/valid things to be thinking about. Which is cool and why i lurk here as a larpy lurk (still don't know what those terms mean and refuse to google it because ummmm do i really care?!?!!).
:)

Having 30+ coins is fine as long as you're still picking good coins and not just diversifying into coins just because "what if" it moons. I've made some serious gains over the last 7 months with 30-40 coins keeping them equality distributed. So when some moon I take some profit and buy others in a dip. You end up buying low, selling high. I make sure every coin I invest in meet the following criteria:

1. I look at the market cap competitors, how much I think the niche is going to grow, the future supply growth of the coin to get a good idea of the growth potential. If its less than 10x I don't buy, period. Even if its a killer coin and idea if I don't see it 10xing I don't buy
2. I ask myself if the price would drop 50% after buying it, would I want to buy more, if not I know I'm letting the price influence how I value the coin and I don't invest. This way I never feel conflicted about following my rule to buy dips and sell peaks
3. I make sure I can recite from memory what the coin does, its competitors, it current size and stage of development, its advisors / team member. If I can't remember this I need to do more research.

Once you can guarantee you are holding only good coins, having 30+ good coins is better than having 4-5 because coins tend to blow up due to news or other hype scenarios that you can't predict. Having lots of coins means you can take advantage of this more often and redistribute profits into other good coins before they blow up as well. Although having 4-5 good coins is much, much better than having 30+ coins you just randomly bought. But having 30+ random coins is better than buying 4-5 shitcoins at ATHs too.

Cool, thx. I guess what you're talking about / doing is ultimately what I am attempting to do. I could definitely be putting more thought into which coins I'm going after, but due to my lack of technical expertise within the realm, feel I'm better off betting on people who know what they're doing and understand the tech and then just following suit. Which i realize is equally a gamble because even legit people have different opinions and then there's the whole bullshit crowd I'm probably caught up with as well. But I definitely could be better about knowing the coins competitors and all that stuff so that's a really good point that I pretty much haven't been considering.

One question I do have re: taking small gains though... If I bought something "early", even if I could take a gain on it- would I want to give up that position on it? Especially because in my instance, the position is key and very relevant to making my measly profits. Does that make sense?

Not sure what you are asking? When to take profits? It depends.
It depends on risks you are comfortable with, as obviously the longer you hold after a moon the more risk, and as it becomes a larger percentage of your portfolio, you might want to redistribute. But I mean despite Veeky Forums shitposts its never bad to take profits. Maybe you just want some money for something and you sell, or your crypto investment is way to big for the risk of that market. All make sense. As for like numbers, personally I just reassess value and price after fluctuations to decide. For example I have a rule (not a mathmaticaply verified one or one Im advocating for or against, and broke once myself) that I wont buy a fucking testnet coin with over a $1bil market cap. So say I buy in at $300mil, it moons to $1bil while still on tesnet nothing has changed, I value it at say $500mil. I sell. But if it moons to $1bil because mainet was early everyone is using it then maybe hodl since I could value it at >$1bil.

Imo its better to take profits when you can for two reason. Its much more common for coins to catch 5x+ hype pumps, but extremely uncommon for you to ever pick the one coin that becomes "the next eth" and delivers lottery level returns. The other reason is that coins almost always have some pull back after a big run up.

Depending on how knowledgeable you are about the market you could try to sell the peak, or you can reverse dollar cost average out of a position if the coin is ramping up, which will give you a good average return. But don't over trade, if you don't know when to make moves, think of a set period of time that you rebalance your portfolio, like every week, month, etc.

These strategies are all ways to increase your returns without actually having to know more than the average trader.

You really have to take this on a case by case basis as there is no hard and fast rules. If you see more short-term potential in another one of your holding s(e.g. big announcements/updates) coming up soon it can be beneficial to trade into that, ride the bullrun then trade back to original position.

You definitely need to reevaluate every so often as well, to realise the future value of a coin. Say hypothetically you buy in at 100m mcap and it runs up to 2b. Is there room for it to grow any further? Does the coin lack technology and is it running on pure hype? as mentioned here Is there more potential in some of your other holdings or a new coin? The most important thing is that you always invest in coins you truly believe in. Constantly chasing pumps on random shitcoins is essentially gambling; but when you invest some time into researching and understanding your investments, it becomes a lot more calculated and your bags are gonna feel a lot less heavy.

Ok gotcha. Yeah, think I just had an epiphany from your comments. My original thought on selling to take some profit and then buying back in later if it was a coin I still wanted to have more of was all wrong. I was stupidly thinking I'd be losing my original position on it - but if I was taking the gains, then essentially it wouldn't be losing the position, it would just be profiting on the difference. Right? Not sure if I'm explaining it correctly, but i'm pretty sure that I know understand that my original outlook doesn't make sense- I'd simply be taking that portion of the profit early, as opposed to waiting to take the whole gain when it peaked.

I never understood this either. If they are all quality coins that will go up why not buy them all? If one of them 100x moons then you just hit the lottery.

Dynamic Portfolio Reallocation.
You should have memories of your portfolios and should be able to shapeshift between them at ease as circumstances dictate.
Its shit like this that will stabilize crypto ..automation kicks in.

Correct. If you want to swing trade you can set and forget a buy order. If it never gets filled you still made profit. Enough time in a bear market you will learn to appreciate that.

I just feel that with my lack of understanding on this whole process, day trading would not be wise. I'm trying to get that "next ethereum" and so holding a bunch of shit and not doing anything and hoping one thing becomes that. My day trade gains with what I'm working with would probably be piddly. For example, my XLM is currently up 120%. But since I only have a few that is equivalent to a cost of $11.71 and current value of $25.67. It's not worth the trouble to cash that out is it? Or are you guys saying I should be cashing out even at those levels of profit and then building bigger positions on fewer coins with those profits. I'm just so small scale but perhaps the way to grow bigger scale?

Jesus christ are you gay or just a complete goober?

In the few months that I've been trading I've just been making it a habit to throw at least a small amount of money at coins I think are good.

I know it makes it harder for me to quickly move money around if needed, but I like that I can get a broad level of feed back on how bad/good my tastes are.

TNB and VIBE were bad choices. Very optimistic about SKY though.

Ha. Neither. Well depending on your definition of a goober...

This is not a rate thread.

Yeah that's kinda what I'm doing as well. Learning as I go and hopefully getting smarter along the way.

You're right. Please don't turn it in to one.

rate thread? like not rotten tomatoes certified fresh enough for ya?

Yeah, you're a fucking goober. Also- don't pay taxes. The union is a lie.

How would I profit on something I haven't bought? (if buy order never gets filled, I have nothing to do with it)

thank you for the insight ya gobstopper

Swing trade implies you sell some to buy more after a dip. For example if you sell some XMR you made profit. If you set a buy order for lower and it doesnt fill you still made profits selling the initial pump.

Dont diversify... i did and ended up only 2xing my money. If i had been smarter and for example went all in to nxt then it was 1.4k sats i would have almost 10xed my money in a month... diverisity only works then you have a lot of money.

Gotcha- thanks. BUT....if i set a buy order for lower to get back in and it doesn't fill and only goes up from there, then I've potentially missed out on having a coin that moons and I've lost out on all that potentially big profit to take my small profit, yes?

>Its shit like this that will stabilize crypto
Big if true. Here some light further reading

moallemi.com/ciamac/papers/linear-2012.pdf

stop overthinking and just buy link

Ok yeah this is probably my biggest fear. Not sure if I'm nixing any real profit potential by having such small amounts of things. I'll only make money if something really takes off. But i was hoping like that market cap experiment btwn Jan '17 and '18 might have something to it....and if I planned to just sit on things for a year that it might possibly make sense/could get a more decent profit way down the road, if a couple of the coins are still relevant and doing well. But yeah i'd need them to do REALLY well...

Yeah. But thats happening with some coin you have heard of anyway. Cant win em all. Dont get me wrong if you think its going to moon massively with no dips going forward you dont HAVE to sell. But profits are profits. Missed profits are something everyone has.

Haha. I got some. Like 58 of em. I can retire off that some day the way many of these biz peeps been talking, no? ;)

Yeah i get you. Good point. Thanks.
And would you still suggest that way of thinking in my particular case: being totally over diversified with tiny amounts all over the place? Or with my novice goober "strategy" would it make the most sense to just hold my goober arsenal and maybe i'll have some lotto luck and something that moons massively to make it all worth it? Or even in my case I should be thinking about taking profits on the way? So basically the amounts don't matter and I should be thinking the same way if I'm a million dollar portfolio trader or a thousand dollar one... ?

Amounts matter pertaining to risk. If you are worth billions you can be splashy with hundreds of thousands. If you are homeless play it safe with $100. If you can wake up tomorrow and be indifferent to losing everything than yeah take huge risks.

Well thanks guys for helpin a gal out. Appreciate the comments and advice. You’ve given me some good points to think about here :)

Oh and this is Op, btw...just posting from phone so different id now. Anyways thx all & goodnight.

hhehaaheh you sound like you came from over there

don't you know this is here

muh club

OP, if you want broad exposure to crypto, look into C20, or TaaS. Look for projects similar to those as your 50% stack.

yes there is a flaw in your thinking, you're asking for advice on Veeky Forums post normie invasion so all you will get is manipulation, shills and other idiot normies talking out of their ass

open bobs

this is the normiest post I have ever seen in my life, christ

Well I’m a normie so that makes sense!

I meant
god damnit