The Undeniable Lesson – Cryptocurrency

Just a year ago, Bitcoin peaked at US$20,000.

As of 13th December 2018 however, the same coin is only worth US$3,363 – more than 80% lower since its heyday, with those who did not manage to cash out in time suffering massive losses.

Similarly, other popular cryptocurrencies like Ethereum also suffered crashes, wiping out almost US$700 billion in total from the global cryptocurrency markets for the past year.

While this outcome may seem like it could’ve been pre-meditated, what with billionaire investor Warren Buffett quoted calling Bitcoin “rat poison”,

a big group of people around the world still chose to follow the herd to invest in the cryptocurrency without knowing what it is or even knowing how to deal with a cryptocurrency wallet.

In fact, this is not the first time the world has been hyped to invest in the latest fad without actually knowing what it’s about.

Win or Lose – It’s Right Under Our Noses

What most retail investors don’t realise is that the best things to invest in are usually right under their noses.

One of the more obvious examples are consumer products.

When we pop open a can of Coke while watching the Bitcoin price movement on the computer screen, we really should be wondering about the can of Coke in our hand rather than the Bitcoin we see on the screen.

And as consumer products involve things we see and use on a daily basis, it takes almost no effort to identify them because they are practically all around us.

More importantly, some of these companies have also been known to give out consistent dividends over the years i.e passive income to their shareholders.

*Below are 5 images taken from WealthPark’s StarChart feature, showing the respective companies’ strength from 5 different aspects; 6 points being very strong, 0 point being very weak.  

1. Cortina Holdings Limited (SGX)

2. Padini Holdings Berhad (KLSE)

3. Vitasoy International Holdings Limited (SEHK)

4. Ryohin Keikaku Co. Ltd (TSE)

5. Kimberly-Clark Corporation (NYSE)

Unlike these businesses, few who invested in Bitcoins actually understands that the coin is merely a set of numbers without any value-generating business behind them. Or as Phillip Fisher would put it, “The stock market is filled with individuals who know the price of everything, but the value of nothing.”

And until we learn to understand the value of something instead of just looking at its price, we are still running the risk of investing in something that could potentially cause us to lose our bottom dollar.

Disclaimer: All facts and opinions presented are for educational purposes only. This is not a recommendation to buy or to sell. The author(s) involved in the writing of this piece do(es) not have current vested interest of the company. Please consult a competent professional for expert financial or other assistance or legal advice.

About Yen Hung Chua 12 Articles
I became an advocate of money management and value investing at the age of 27 for a simple reason. Money management, investing and MOST IMPORTANTLY, emotional stability – was never something that was taught in school. We end up a bunch of workers who are taught to only work for money but not the other way around, and to treat investing like a game of chance. And it was time to change that. Being with WealthPark, not only do I have the opportunity the spread the money-consciousness further and wider, but the platform on its own, is also wickedly useful for anyone who wants to invest in stocks.