Investing Legend Shares His Strategy for Getting the Next Big Trade
Chamath Palihapitiya, the chairman of spaceflight company Virgin Galactic, who purchased one million Bitcoin (BTC) back in 2013, has finally shared with the public his investing strategy for figuring out when the next big trade will appear and how to catch it.
What Good Investors Focus On
Palihapitiya says that great investors focus on slugging percentage, which includes risk management and position sizing, instead of batting percentage that only has in view the returns and doesn’t consider the level of risk involved in attaining them.
He also says that smart investors find one big winner and then ride it hard.
“Investing 101: Don’t confuse slugging percentage with batting average. The former is being the cool kid in high school – you’re a rare thing, and everyone wants to know the secret. The latter is like going to the prom with your mom. Everyone talks about it, but not kindly,” the investing legend tweeted.
“[Savvy investors] know when to capitulate, buy up when to be ‘risk on,’ and ride the winners. They care more about owning a big piece of one winner vs. irrelevant pieces in many winners, “Palihapitiya explained.
Alternative Assets Exposure is Important
Palihapitiya made a large bet on Bitcoin in 2013 – at the time, the price of the primary crypto coin was only around $80. With the king cryptocurrency now drifting around and over $10,000, his investment is now worth more than $10 billion.
Investing 101: Don’t confuse slugging percentage with batting average.
The former is being the cool kid in high school – you’re a rare thing and everyone wants to know the secret.
The latter is like going to the prom with your mom. Everyone talks about it, but not kindly.
— Chamath Palihapitiya (@chamath) September 23, 2020
Palihapitiya also explained that because the traditional approach of investing in equities and bonds for retirement doesn’t work anymore, it is a rather great idea to enhance exposure to various alternative assets such as crypto, art, cars, and baseball cards.
The investing legend also said that the majority of people today have between 0 percent to 5 percent investments in various alternative assets, but this may change in case bonds keep returning to zero.
Andreas Townsend Author
I am a technical writer, author and blogger since 2005. An industry watcher that stays on top of the latest features, extremely passionate about finance news and everything related to crypto.