,
22 tweets,
4 min read
Read on Twitter
New thread: last week I wrote about what blockchains could do over 10 years...Let's talk about now.
In 2017 many people have made life changing fortunes in cryptocurrencies.
Perhaps that's you. If so, congrats! You saw it very early, you made a non-consensus investment, and you were right.
It's still early. In 10 years, to the moon! But take a breather and give it some thought.
I've talked to some who have >80% of their net worth in one or more blockchain networks
Take a breather: if a rich auntie airdropped your net worth in cash, would you put the same % of it into blockchains as you have now?
Take a second breath and consider, if your blockchain portfolio went down by 80% for over a year, can you sleep soundly?
Be honest-search your feelings-it’s easy to delude yourself. Get a 2nd opinion on yourself. Look up loss aversion and the endowment effect.
If your answer to either Q above is no, do a simple spreadsheet like this and rebalance. pick your % 
A large drawdown (over 50% of net worth) has happened to me twice in my career.
Each time after a single investment went up by hundreds of times. Each time I was depressed for a year. And I had material diversification.
But my “loss aversion co-efficient” was different that I thought it would be.
I woke up in the middle of the night at 3am. Every night for over a year. Replaying the chance to sell more over and over again.
Visualizing the account statement at the at the all time highs. Every night.
Feeling like an idiot and feeling like I’d let my wife down.
I don't like market timing - I think it's impossible - no one can reliably call anything in the short term.
But if you are sitting on massive gains that are most of your net worth, consider rebalancing (not into the next ICO but into cash)
If you believe in the long term, take what you need off the table for your future mental health so you can HODL the rest. And pay taxes!
and @fredwilson have blogged about crashes. read those posts. avc.com/2017/09/divers… and feld.com/archives/2017/…
Educate yourself about what could go wrong - play the devil’s advocate.
Know the other side. read @Bitfinexed, @prestonjbyrne, and what lots of people won’t apparently tell you. ofnumbers.com/2017/09/21/eig…
But more important, know yourself and examine your potential emotions if things go south for a while before resuming upward. #end
