“When others are greedy, I am fearful; when others are fearful, I am greedy” comes from investment master Warren Buffett and is the essence of value investing. In the highly volatile and emotionally charged world of Web3, this is an extremely important survival rule.
1. “When others are greedy, I am fearful” — Staying clear-headed amidst the frenzy
What does it look like when 'others are greedy'?
1. FOMO sentiment is rampant: The market is in a bull phase, asset prices are skyrocketing, and various tokens are multiplying by several times or even dozens of times. Social media is filled with 'get rich quick myths', and people around are discussing how much money they've made.
2. Overly optimistic narratives: every project is hyped to the sky, with grand narratives like 'the next Bitcoin', 'Ethereum killer', 'disrupting traditional finance' emerging endlessly, while the project's fundamentals (such as technological progress, actual users, product availability) are overlooked.
3. Irrational bubbles: market value is severely decoupled from actual value. Some worthless meme coins or vaporware can also be driven to sky-high prices. The market's average price-to-earnings ratio (in Web3, measures like FDV/TVL) is ridiculously high.
Why do you need 'fear' at this moment?
1. Risk of being a bag holder: when everyone rushes into the market, prices are usually at their peak or close to it. Your 'buy' behavior is likely providing liquidity for early investors and whales (those holding a large number of tokens), becoming a 'bag holder'. The assets you buy at a high price will face huge losses once the market turns.
2. Mean reversion is an iron law: there are no assets in the financial market that only rise and never fall. After a crazy surge, a sharp pullback is inevitable. Your 'fear' is a respect for market laws, a clear awareness of risks.
3. Look for selling opportunities: at this point, 'fear' also means you should consider taking profits. Lock in some profits, or gradually reduce your position to secure gains. Don't be greedy and try to capture the last penny.
In specific applications of Web3:
1. When a project is shouted out by all KOLs, and the community is in a frenzy, while its token economic model is full of inflation risks, you should feel fear.
2. When gas fees are absurdly high, and everyone is rushing to mint NFTs or participate in IDOs, it is often a signal of market overheating.
II. 'When others fear, I am greedy' — finding opportunities in despair
What does it look like when 'others fear'?
1. The market crashes, panic spreads: the market is in deep bearish territory, with asset prices plummeting by 80%, 90%, or even more from their peaks. Social media is filled with statements like 'Bitcoin will go to zero' and 'Web3 is a scam'.
2. FUD is rampant: Fear, Uncertainty, Doubt are everywhere. Bad news is amplified, and any positive news is ignored.
3. Liquidity exhaustion: trading volume has plummeted, and the market is lifeless. Many projects have stopped development, the community is silent, and investors are cutting losses and leaving.
Why do you need 'greed' at this moment?
1. Cheap chips: the prices of quality assets have been driven down to the floor price. The cost of buying at this time is far lower than during the frenzy of a bull market. You are buying future potential assets at a 'discounted' price.
2. Shedding the superficial, the strong remain strong: a bear market is the 'touchstone' for projects. Those without substantial progress, purely speculative projects will die, while truly technical, team-oriented, and community-driven good projects will survive and stand out in the next cycle. Your 'greed' is the recognition and betting on these quality assets.
3. Risks are fully released: when the worst-case scenario has already been priced in by the market, the downward space is relatively limited, while the upward space is opened.
In specific applications of Web3:
1. When projects like River Pets crash due to the team stopping development and the market is in extreme fear, you need to analyze: is this fear permanent (like a team running away), or temporary (like market panic leading to misjudgment)? For the former, stay away; for the latter, there may be opportunities. But River Pets belongs to the former category, its core value has been destroyed, and greed should be avoided.
2. In a bear market, continuously pay attention to projects that are still actively building, with ongoing code updates and core community members remaining active. Accumulate positions in batches when the market is ignored.
Important reminder:
'When others fear, I am greedy' does not equal blindly bottom-fishing. Its premise is:
1. In-depth investigation and research: you must be able to distinguish whether a project is 'temporarily misjudged' or 'essentially dead'. River Pets falls into the latter category.
2. Strict risk management: never go all-in, use funds you can completely afford to lose, and accumulate positions in batches.
3. Extreme patience: it takes time to transition from a bear market to a bull market, possibly 1-3 years or even longer; you need enough patience to wait for value to return.
