The MSB Blog: Markets Cycles
Updated: Jan 10
Disclaimer: This blog is not meant to act as a substitute for professional advice. It is the opinions and point of view of the author and all readers are encouraged to seek professional advice before making any investments, implementing tax strategies or making any business decisions.
2022 is starting out a bit choppy. The stock market and bitcoin has taken a downturn, Covid is running rampant again and everything is a bit uncertain. I have learned over the years that turmoil and market crashes provide the best opportunities to make money. I am talking longterm investments, not quick cash. I have found that the best returns come over time and that applies to stock, bitcoin, real estate and breeding snakes! When times are great and money is flowing easy, people get spoiled and start to develop unrealistic expectations. When you're killing it and making that easy money its only human to start feeling yourself. You start to think, damn I'm top dog up in this bitch! I'm a genius! But in reality any bonehead can make money when stocks are doubling every month and snakes are selling like never before. We start to get lax and assume that sales will continue at the current pace indefinitely. We have been in a 11 year bull market run as far as stock, real estate and yes snakes go. It is safe to assume that things will have to slow down eventually. If you are not psychologically and financially prepared for a slow down, it could cause you to quit or fail. So prepare yourself for the inevitable market cycle... and remember that these down turns are opportunities to acquire assets on sale! Crashes should get you excited, not depressed! It is these moves that help create longterm wealth. Don't follow the crowd and invest only when everything is going great... buying high and then panicking and selling when everything crashes. Do the opposite, buy low and sell high. As Warren Buffet likes to say, be cautious when the majority is being greedy and greedy when everyone is being cautious! It's these contrarian investors that do very well over the long haul!
We all are coming off two very strong years of snake sales. It is critical that we invest a good portion of those proceeds wisely if we plan to grow our wealth over time. Towards the end of the season I made a few key snake acquisitions adding a few new genes I did not have or needed more of like, Black Head, Red Head, Mahogany and few others. The key to success in the Ball Python game is to always produce cool, hard to make combos. Once established as a boutique breeder and the cash is rolling in... take advantage of those market cycles. When the stock market crashed after Covid was discovered in 2020 it was a great time to max out retirement and add funds to your stock portfolio accounts. FedEx dropped to the mid 90s, today its at $263/share, Uber dropped to $15, today its $41.50. These are just two examples and these stocks are well below their recent highs. There are a lot of very cheap stock right now. If you can max out your 2021 retirement accounts you could reduce your taxes and take advantage of some stock that are selling well below their recent highs. Even Bitcoin and few other cryptos are selling well below their recent highs. I invested heavily in Real Estate in 2021 so now I'm planning on directing some cash into stock and crypto. I'm thinking I will add some Bitcoin, Roblox, Nvidia, Square, Trade Desk and Tilray. These are assets I plan to hold for at least 5-10 years.
So remember guys... Assets over Liabilities as my guys at Earn Your Leisure like to say! And buying assets during crashes and market corrections is always better than investing at the top of the market!
Happy New Year!