When I was a kid investing in stocks…I feared October.
I feared it because of Black Monday, October 19, 1987. The market crashed 22 percent …in one day.
I remember exactly where I was sitting and what I was doing that day. I was working my first job after college in the wire room of a small Toronto brokerage firm. I lost that job pretty quickly.
Back to school I went.
The data does show that…
October has historically heralded the end of more bear markets than the beginning. The fact that it is viewed negatively may actually make it one of the better buying opportunities for contrarians. Slides in 1987, 1990, 2001, and 2002 turned around in October and began long-term rallies. In particular, Black Monday 1987 was one of the great buying opportunities of the last 50 years.
The crypto markets are like the stock markets in many ways, but the optimism – dare I say the crypto $VIX – has a different flavor. I have joked over the years that the $VIX in Italy is always 4 (low, because they just don’t really care). The crypto markets are the opposite of Italy (I have never seen people care more about what they own and are doing), but the flavor of fear and greed is just different.
For example, the term ‘Uptober’ is right up there with ‘HODL’ and ‘Diamond Handz’.
The crypto markets are just proving to be different.
I think the difference has a lot to do with the age of the average participants, experience in and around markets and just general attitude.
When I make a seed investment I am a HODLer and in many ways ‘diamond hands’ (because I can’t sell). I think knowing I have to hold and therefore not as interested in the day to day price or value of my investment, makes me generally more optimistic in my outlook.
My thinking for a while has been that crypto is just ‘public venture capital’ and so the best investors of this era will have to rethink and in many cases rewire themselves for the evolution.
Thinking about the next ten years I went back 10 years on my blog to read what I was thinking in 2011. Sure enough, there is a post I wrote titled ‘The Next Ten years‘. I was incredibly optimistic about investing in startups. I linked to a very prophetic piece by William Quigley who wrote:
Going forward, those who participate in building new companies and providing the start-up capital to fuel the growth of those businesses, will be handsomely rewarded like never before.
Going forward, I would say the same with a new twist about those investing in building communities alongside will be handsomely rewarded as well.