Just Take A Breath

It's not getting a lot of attention but Bitcoin has taken quite a hit over the last few months. 

I threw Strategy (MSTR) on the chart too which is of course a leveraged proxy for Bitcoin. Over the weekend I saw that Jim Cramer was Tweeting about Bitcoin and that Michael Saylor should do something and then I saw this get retweeted during the day on Wednesday.

If you look at his feed, there are a lot posts about Bitcoin and several about Strategy. Gemini gave this answer,

It's difficult to know whether the emotion in the tweet really captures Jim's sentiment or if this is his TV persona expressing itself. If the tweet doesn't capture Jim's actual state of mind, there are HODLers who are as worried as how I take his Tweets. There are other people sitting on relatively large positions of the software stocks that got hit yesterday or broader tech that is getting hit today.

We spend a lot of time here talking about position sizing, having the right mix of assets and managing sequence of return risk if relevant. 

However difficult the task of enduring through stock market cycles and various events that come along, it will be orders of magnitude more difficult when every event whips up your emotion. 

Bitcoin is, was and always will be a speculative asset with a legitimately asymmetric return opportunity. It could go to the moon or it could crap out. Anyone who is sweating their Bitcoin position has too much. Their dread is then magnified when they read Tweets like Jim's or see new price targets to the downside from the extrapolators.

If you think Bitcoin is a scam, then the huge decline doesn't sway you the other way. True believers still truly believe and skeptics willing to bet on the asymmetry may have had their confidence shaken but in reality, the only thing that has changed is the price. Anyone whose position is stressing them out, ok sell some, maybe it will be a good decision or maybe it will be a bad decision, no idea, that is what it means to bet on asymmetry. I'm using the word bet on purpose. I would grain of salt the idea that it is truly an investment...for the most part. A diversified portfolio might allocate to, "invest" in, asymmetry so with sort of top down framing, maybe it is an investment. But from the bottom up, it's a bet.

Qualcom (QCOM) is getting hit after hours on its earnings report. The stock has been meandering for the last five years not making much progress and YTD it is down 13%. It earned $2.78 for the quarter reported versus $2.83 for the same quarter last year and it appears they are vulnerable to the shortage in memory chips.

The average analyst estimate for QCOM's 2026 earnings is $11.96/share and for 2027 the estimate is $12.25/share. I have no disclosures to make here but before the afterhours hit, it was trading at 12 times earnings and it's revenue is $45 billion. While I have no idea what the stock price will do, it is quite clear the company isn't going out of business anytime soon.. 

This isn't about Qualcom. If you own individual stocks, you own them for some reason, there was something that caused you to buy. A simple drop in price, especially when the sector that the stock is in is going through something, like parts of tech now, or when the entire stock market is going through something, probably has nothing to do with whatever your reasoning was for buying the stock so don't get worked up. Succumbing to emotion on a regular basis makes for a stressful existence and will hamper returns significantly. 

Just take a breath. 

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