I’ll confess, this week I slipped. I checked my brokerage app on Monday, Tuesday and Wednesday.
Strategy sold 32 $BTC ( ▲ 2.1% ) and the market panicked. Bitcoin is down 15% since the announcement.
Fascinated by the action, I’ve been pulling up the price of bitcoin multiple times a day. And on Wednesday, after doing so minutes after I woke up, I remembered why I no longer do that.
My adrenaline spiked, undoing 8 hours of peaceful sleep minutes after waking up.
The price of bitcoin changes nothing about my investment approach, nor has it impacted me. It’s noise.
For years after I started investing, in stocks, ETFs and other instruments, I religiously checked in multiple times a day, believing a proper investor remains informed.
That’s not investing. That’s gambling. Putting your money on black and spinning the wheel. Watching. Hoping. Following the white ball as if I could move it with a stare.
It’s been a week for bitcoin. I still sleep soundly.
A system you have to watch isn't a system
Today, my investments run on a system. Every week, I know what is coming in the door and what is going out and where.
I review this on a monthly basis. A bonus could be moved into an additional investment. An unexpected expense on my credit card might need to be covered.
Market movements barely register. I’ll observe the long term movements and decide if my thesis is still valid.
Do I believe bitcoin will grow by 20% or more per year over a period of 4 years? - YES.
That means the 15% draw-down based on noise does not affect my system in the slightest.
The three numbers
Every two weeks, I take fifteen minutes to check three numbers. Then I execute a few transfers and I’m done.
1. Cash on hand vs. monthly burn.
Does my remaining cash - after investments - cover the credit card bill for the month?
To be clear, I pay off my credit card in full every month and pay zero interest. Using a credit card is both a simple way to tally my monthly burn, as well as giving me 30 days of free credit.
2. Outstanding LOC balance.
Do I have additional (unplanned) money to pay down my Line of Credit faster?
Last week, I received an unexpected $450. That went straight into paying the line of credit down just a little faster.
The system relies on velocity of money. Every move I can make to pay down the line of credit faster means the next investment round happens faster.
3. Margin position health.
While the fundamentals of the system does not rely on margin, I carefully manage margin-based investments to accelerate the velocity.
These are the only ones that need monitoring. But they’re set-up conservatively. Bitcoin’s drawdown this week was no where near what would trigger a margin call, though at the next review, I might lower my margin to re-establish the safety margin to sleep at night.
Most weeks the action is "nothing." That's the goal.
The rest of the month, the market can do whatever the market does.
What I (generally) no longer do
I banned price alerts from my notifications. The cortisol spikes do more damage to my health than anything else.
My brokerage apps are relegated to screen 3 on my phones, in a folder. The multiple steps to open them gives me just enough time to reconsider on most days and simlpy move on.
I stopped reading or watching any financial news. Once the headline is published, the algorithms have traded. At best, I am playing catch-up. At worst, a poorly researched article will give me unfounded opinions. This is not a system.
As I confessed at the top of this newsletter, I still backslide. Significant market events trigger my curiosity. I caught myself.
More importantly, I trusted my system. Even with all the attention and volatility in the last days, nothing I read remotely changed how I manage my system.
The system lets me keep discipline, brush myself off and go about my day peacefully.
Try it for 3 weeks
Here’s my challenge:
This weekend, write down your key numbers. Use mine, or define your own.
Next Sunday, check-in on your numbers. Does anything change? Does something worry you?
The following week, do it one more time. Are you adjusting anything? Is it controlled? Did you check your portfolio during the week?
This small exercise will tell you if you have a system, if you trust that system.
If not, iterate.
My moves this week
Lines of Credit — paid down to less than $20k.
Portfolio — no moves.
Strategy check — all green!
I haven't replaced the paycheck yet but my morning routine is in my hands.
That's enough to sleep on for now.
Forward this to someone who opens their brokerage app before their eyes are fully open.
Disclaimer: All material is provided for educational purposes only and does not guarantee any financial results. This is not financial, legal, or tax advice. I am not a financial professional. Results vary and are dependent on individual effort, timing and circumstances. There is no solicitation to invest.