The truth of investing is always cruel and realistic. The vast majority of intelligent and top-notch investors spend their entire lives pursuing “excess returns,” only to find that they can’t outperform the S&P 500 index. This article is based on a piece written by “Taolao Xiaoli” and compiled, translated, and written by Deep Tide.
Recently, with the annual shareholder meeting of Berkshire Hathaway, controlled by the stock market god Warren Buffett, a picture has been circulating on social media: over the past 20 years, Warren Buffett’s investment performance is 554%, which is lower than the S&P 500’s 568%.
Is it better to invest in SP500 or Bitcoin?
The S&P 500 consists of the top 500 listed companies in the United States, accounting for about 80% of the total market value of the U.S. stock market, also known as “Beta.”
The truth of investing is always brutally cruel. The vast majority of intelligent and top-notch investment managers spend their entire lives pursuing Alpha (excess returns), only to find that they can’t outperform the market Beta. For most investors, it is better to start by passively investing in index funds and let the market make them wealthy.
Turning to the cryptocurrency market, how many assets have outperformed Bitcoin? How many diligent traders and top-level fund managers have ultimately achieved better performance than Bitcoin? As far as I know, there are very few.
The reason is simple. Like many others, they think that Bitcoin’s market value is too high and it is not an opportunity for ordinary people. Even if it doubles in value, it wouldn’t change much. They need to take risks for greater returns. So, they gamble most of their Bitcoin on various altcoins. Then, naturally, they lose their Bitcoin and end up with a handful of altcoins, becoming someone else’s liquidity for exit.
The same story happened with Solana. SOL is a big Beta with certainty in this cycle. However, like Bitcoin, its market value is too high and lacks the temptation of a 10x return. It is far less attractive than various meme coins. As a result, various investors couldn’t bear the loneliness and switched their cherished SOL for various meme coins, only to find that they couldn’t switch back to an equivalent amount of SOL.
One achieves success while many others suffer. Behind a hundredfold return is the mournful song of a group of small retail investors.
During a bull market frenzy, most people are overly optimistic, thinking that they are investment geniuses who can capture super Alpha within this cycle and achieve a class leap. When the tide recedes, they find that the person in the mirror is just an ordinary individual oscillating between arrogance and inferiority. For ordinary people, it is better not to easily give up the Beta in their hands.
Investing is the same, just like love.
Many women/men are dissatisfied with their current boyfriends/girlfriends, always thinking that they can find someone better, only to realize that what they once had may have been the best.
Just like in the novel “Charlotte’s Web,” Charlotte initially despised Wilbur and thought that Templeton was the perfect goddess. Did Charlotte really love Templeton? Not necessarily. It could have been an obsession with something she couldn’t have. When Charlotte is truly with Templeton, she realizes that Templeton is not as great as she imagined. She only loved an illusionary person.
In the end, the time-traveling Charlotte sees the truth and chooses to cherish the person in front of her. However, outside of movies, most people don’t have the opportunity to make a new choice. It’s just like a pile of junk altcoins in their hands that they can never exchange back for the Bitcoin they once had.
So, don’t lose that person who treats you well from the beginning, and don’t lose your Bitcoin.
Recognize yourself and learn to be content.
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