Ryan: All right. Hey, everybody. This is Ryan Coisson. I’ve got a special guest with us today. His name is Teeka Tiwari. And Teeka has been doing some amazing things in the cryptocurrency market.
But before we do that, I just want to say welcome, Teeka. Thank you so much for taking a few moments of your time to do this little interview-type situation we’ve got here with us.
Teeka: Oh it’s a pleasure to be here, Ryan. Thank you for the invite.
Ryan: You’re very, very welcome. I want to talk a little bit about your history because it’s very interesting to me, as someone who’s been in the finance space for quite a while now. I know you worked with Lehman Brothers. You were a vice president of Shearson Lehman. You had your own hedge fund, I believe, as well.
Teeka: That’s right.
Ryan: You’ve been an editor for a few different types of companies, like Jump Point Trader, I believe, Mega Trends Investing. And now, you’re working as … I believe it’s a co-editor at Palm Beach Research Group.
Teeka: Mm-hmm (affirmative).
Ryan: You’ve kind of been in a lot of different areas. So can you tell me a little bit, why cryptocurrency? When did that even trigger for you that this whole new industry is unfolding? “I want to make a shift and start setting my roots and foundation in it”?
Teeka: So what happened was I am a dyed in the wool, old-fashioned stock guy, right? I grew up on Wall Street at the age of 18, in the 1980s, which was an amazing time to be on Wall Street.
I always wanted to trade stocks. From the age of 12, I knew I would work on Wall Street. I grew up in London. And I made that happen.
When Bitcoin came about, and cryptocurrencies came about, I came from it from a very traditional standpoint. Well like Jamie Diamond, right?
Teeka: This is a fraud, this is a Ponzi scheme, how can this have value? And so I completely ignored Bitcoin, and I watched it go from pennies to $1,200, and then it crashed. And then what happened, was Ryan, you know, I’ve seen many frauds throughout my three decades working on Wall Street-
Teeka: But frauds and small frauds. And there’s one thing that a fraud always does: it always goes to zero. But Bitcoin didn’t. Bitcoin still had a multi-billion dollar net worth, even after crashing, even after all the bad news came out. The massive hack.
And that woke something up for me. And I said, “You know what? There are a sufficient amount of people that believe that there is value here. And so I can’t ignore that. I’ve got to go dig deeper.” And so I started traveling all around the world.
I started going to Bitcoin events; I started to talking to people that were smarter than me in this space. And what I realized is that Blockchain technology and the implementation of Blockchain technology by the Bitcoin network was transformational.
We now had a way to transact value among one another, without having a trusted intermediary. And that, Ryan, is, I can’t overstate how massive that is! The implications of that, of being able to have data that we don’t need to have it independently verified, it’s cryptographically verified.
That concept can ripple out throughout the entire greater economy. And when that penny dropped, I knew I had to commit all my professional resources into becoming an expert in this space. And that’s exactly what I did.
Ryan: And do you think, I mean you mentioned something there about not having to get a third-party, or intermediary to validate something. Do you feel that part of the reason that this isn’t getting as much mass adoption is that a lot of folks might not even fully understand validation process [inaudible 00:04:11].
Because as a business owner myself, I sometimes know what a headache it might be to send even just say a wire transfer from the United States. We were just talking about how I’m leaving to go to China, to China.
And heaven forbid it’s over $10,000, and then all of a sudden there’s other people getting notified about it, like the IRS and things like that. Do you think that the average folks don’t maybe know about these processes, so they don’t maybe see what you’re saying as this breakthrough, they don’t see it in their everyday life? Or what do you think about that?
Teeka: I think that’s true. I think probably the biggest hurdle to mass adoption, which some smart people are working on right now, is that it’s kind of a pain in the neck to buy Bitcoin. It’s not as easy as firing up a web browser and going to e-trade.com and pressing a buy button and buying it, right? You’ve got to go to an exchange, you’ve got to upload your identity documents, then you’ve got to wait to get verified, and then finally, you can go buy some Bitcoin.
Oh, and hold on, if you want to buy anything other than Bitcoin, you’ve then got to go to another exchange, work through the whole process, transfer your Bitcoin, and then start buying cryptocurrencies.
So, a lot of people find that too inconvenient, and that’s why the people that are literally making the most amount of money right now in cryptocurrencies are the early adopters: people that are willing to put in maybe the 20 minutes needed to go through a process which just takes five minutes if you want to set up a brokerage account.
And so this is a common objection I get that people will tell me. “Oh Teeka, we love your ideas, but gosh, setting up a crypto account is so difficult.” What I tell them is I say, “Look, when it’s easy as going to your Fidelity account, Bitcoin will be $20,000 a coin,” right?
The entire cryptocurrency market will be 10x bigger. So you’re actually really getting paid an enormous amount of money to go through maybe, you know, 20 minutes of a pain in the neck. And so just to take that thought one step further, Fidelity Investments, which is one of the largest managers of retail money in the world, they manage over $2 trillion, they are huge fans of Bitcoin and Bitcoin, and they actually have a quote of Bitcoin in their online trading software.
So you can’t buy Bitcoin yet through their trading platform, but it is just a question of time, Ryan, before you’ll be able to buy cryptocurrencies directly through your trading software. And can you imagine what will happen to this whole marketplace when buying Bitcoin or any cryptocurrency is as easy as firing up your e-trade, or fidelity tradings platform.
Ryan: I mean it would be absolutely amazing, you know. Right now you mentioned the process that people go through, and one thing I want to bring to light too that you didn’t mention, but I know a lot of folks who struggle with this too, is oh, and by the way, you can only buy $1,000 a week. Or you can only buy $500 a week.
And you’re trying to get upgraded to all these different things, and it’s funny, it’s almost like you’re trying to make a sale, but you’re doing everything you possibly can do to make it as difficult for someone.
Teeka: As difficult as possible, right, like Coinbase. It’d take me forever before I could start buying in size on Coinbase. They’re like, well, we’ll let you buy $500 a week, Teeka. I mean, it’s … if you remember the early days of the Internet, when we were getting on the Internet, we were doing it with 56k modems, right?
I mean it would take 20 minutes to load a page. It was just so slow. Even when AOL came on board, and you’d call AOL, and you’d be on hold for 90 minutes. I mean, we’re in the early days of that technology, but just like during that period of time, for the folks that had the vision to see where the future was going, and then bought in on some of these young companies, they made an absolute fortune. And that’s really the opportunity here I see right now in cryptocurrency.
Ryan: Mm-hmm (affirmative). And let’s take a step back for a second, because I’m always curious to talk to people who are, especially someone like yourself, who’s dedicated the last, you know, the better part of the last few years to really go both feet in on this.
How do you describe cryptocurrency to like an average person?
Teeka: That’s a great question. So I would say that there are two types of coins that you need to be aware of, right? One is a cryptocurrency, and one is a utility coin. They’re two totally different things, but they’re both called cryptocurrencies.
A cryptocurrency is a cryptographic token that is trying to be an alternative to money. So Bitcoin would be a cryptocurrency. And so what gives it value is that it is, there’s only going to be a limited amount. There’ll never be more than 21 million Bitcoin.
But what really provides Bitcoin value is the fact of how robust the network is. There are billions of dollars worth of computers, validating the transactions on the Bitcoin network.
And so if you look at that Bitcoin network, people constantly try to hack it. But because of the nature of the network, today it’s been unhackable. And really, with current technology, the Bitcoin network is so big right now, you can’t co-opt it, you can’t take it over.
And so that is really, really valuable. And so when people put, you’ve got people who have literally own billions of dollars worth of Bitcoin. And they’re making that bet because they’re saying, “We don’t trust paper money, you can print an unlimited amount of it. It’s really not secure, and the government can take it away from you.”
Ryan: [crosstalk 00:10:15]-
Teeka: Whereas with Bitcoin, right [crosstalk 00:10:16], go ahead.
Ryan: Yeah, do you find that there are certain types of people are more apt to believe that? You know, for example, folks in Argentina, where their currency is going through rollercoasters all the time.
Ryan: Or people that were in Cypress, or just people who have suffered through either hyperinflation, or there’s a high demand for, in Argentina for example, high demand for a black market of U.S. dollars.
Ryan: Are those countries that could potentially be a catalyst for more adoption, because they already don’t believe in their own currency?
Teeka: Yeah, and I think we’ve already seen that. If you look at the growth in Bitcoin, it’s 12xed over the last year, and look at the turmoil we’ve seen in places like Brazil and other parts of South America, China, in terms of they’re devaluing the currency.
So yes, and this is a thing that a lot of American or Western investors have a tough time getting their head around. They’re like, “Well I don’t need Bitcoin, I have cash.” Well yeah, you’re right, you’ve got a stable currency, right? You don’t need Bitcoin.
But there are billions of people in the world that don’t have stable currencies. Look at the folks in Africa, right? Their currencies are … They’re not worth the paper they’re printed on.
Teeka: And so there’s this whole burgeoning global demand for cryptocurrencies. So anyway, that’s one coin, cryptocurrencies, and there’s a whole ‘nother coin called utility coins. And utility coins are basically used, let’s say Ethereum, which a lot of people know about Ethereum. Ethereum is essentially a global computer that you can write computer programs for and run computer programs on a globally decentralized computer program.
And you buy time on that computer, global computer system, with a currency called Ether. So we consider something like Ether a utility token, because you’re essentially buying programming power. So I wouldn’t really consider Ether a cryptocurrency, I would call them a utility coin.
Ryan: Okay. And there are other ones out there, to give people an idea, like a very simple one that I would imagine you’d called a utility token, is like FileCoin.
Ryan: Where the idea is that basically you’re hosting files through a peer-based network, and there’s kind of this same type of network effect that you have with Bitcoin, where it’s like unstoppable kind of thing, because it’s on so many different areas and.
I don’t know the ins and outs of it, but as an example for someone who might just be very basic in their understanding of this, there are so many different types of utilities that are available. And so, you obviously run a portfolio of sorts, and educate folks on opportunities of what’s going on within the cryptocurrency market from cryptocurrencies versus utility coins and stuff like that.
And you kind of mentioned having this boots on the ground experience. Now, since we’re looking at the bulk of these are probably utility based, correct?
Teeka: Mm-hmm (affirmative). Most of the coins that I recommend and look at are utility-based. We have a few cryptocurrencies, but I think the real opportunity lies in the utility coin space.
Ryan: And so with that being said, you noticed that the market’s getting bigger and bigger and bigger. There’s all of these ICOs that were happening, those slowed down a little bit with some changes to a few things that was going on, but people are going to come out of the woodwork and start to create utility coins-
Teeka: Correct, yeah.
Ryan: And people need to understand that not all utility coins are created equal.
Teeka: That’s right.
Ryan: So you have the benefit of dedicating your profession to this, so you can go out there and do the recon, you can meet the founders, you can inspect the code, etc. But for an average person, there’s now what, over 1,000 different types of coins available, almost 1,200 I think.
How do they differentiate between what’s real and what might just be a total utter scam? And obviously, they want to focus on the former. How do they do that?
Teeka: That’s a great question. I will say that 95% of ICOs are either fraudulent or just bad ideas.
Teeka: Right? There’s nothing worse than someone that’s young, earnest, with a terrible idea, that somebody gives $40 million to. Right?
Ryan: Yeah, totally.
Teeka: So yeah, so I don’t really participate in many ICOs, and I recommend you probably side step that market, unless you’ve got a special relationship, and you can get in on the pre-ICO, and then blow it out when it trades.
So where we’ve had a lot of success is waiting for the ICO, and then waiting for the crash. ‘Cause generally it’ll crash 80% or so. And that’s when we really start looking at the idea in more detail. So here are some quick and dirty things that you should look at, right?
So, one is, are they solving a problem that needs to be solved? One of the big drawbacks with very smart, technical people, is that they like to solve problems that nobody cares about solving. Right?
So is it a problem worth solving, okay? And then the other piece I look at is I look at the team. Does the team have experience of executing in a successful manner in another area of their life? And it doesn’t even have to be directly related to cryptocurrency, it doesn’t have to be even directly related to software, right?
So, but I want to see a track record of success in something, right? If it’s four guys in a room that are just out of college, unless they’ve got some really good advisors behind them, I’m probably not going to give them any money.
Ryan: And so, let’s go back to the problem, the solution.
Ryan: I think that in marketing in general, my world of business, we constantly look for problems and how we can solve them. Now, are the problems things that people are trying to solve a part of the Blockchain typically? Or would you say it’s better if they’re solving kind of a mass problem?
Something like FileCoin, or something else that would be more mass appeal? Or is it a mix of both?
Teeka: Well I’m basically looking for solutions that, so I’ll give you an example. There’s a coin that we bought at around $3, and it’s been as high as $30, and it’s trading at $15 right now. And the reason that we bought it is because they found a way to make documents tamper-proof, and it’s 99% cheaper than current technology, right?
So that’s … yeah, it’s a no-brainer, right?
Teeka: And then on top of that, the guy that started it has a track record of creating computer programs that entire states run their entire operations on, right? So you’ve got okay, the smart guy has built huge computer programs, great team, solving a massive problem that is going to cut huge costs.
Teeka: I mean, it doesn’t get any simpler than that in terms of deciding who to put money behind. And a lot of this is common sense, and a lot of folks will try to make things more complicated than it is. And I have a really simple rule, Ryan.
If I don’t understand something, I put up my hand, and I say, “I didn’t understand what you just said.”
Ryan: Mm-hmm (affirmative).
Teeka: And you’ve got to be willing to be humble like that, and not think that you know everything. And then if the person that you’re talking to can’t dumb it down enough where you understand it, then it’s probably not a good idea.
Ryan: Right, right. It’s going to be simple to understand. And do you feel that you have years of experience evaluating companies and looking at much, much bigger companies. Because I mean again, the marketcap with cryptocurrencies what, $170 billion or something like that?
Teeka: Yeah, it’s tiny, yeah.
Ryan: So you’ve looked at companies that are big companies, you’ve evaluated much bigger marketcap type situations. Do you feel that that experience has helped you? Or are we in such, kind of the infancy, that as you mentioned, it is almost just common sense.
You just have to kind of look at it and think rationally about what’s going on, and pull the emotion out?
Teeka: You have to pull the emotion out, and there are no traditional metrics that you can look at. So, all the things that I learned about how to value a company, I can’t use here.
Teeka: What I can use that I learned from working on Wall Street across three decades, is how to read people. I’ve met tens of thousands of people throughout my career. I’ve met insiders; I’ve met fund managers, I’ve met stock promoters, I’ve met all these different types of characters along the way.
So you get a good read on who’s real, and who’s just, you know, full of it, and is just shilling. So I think that’s probably one of my super powers, if you will. And if you’ve got a good BS detector, you should listen to it.
Teeka: You should absolutely listen to it. If I’m sitting down and I’m talking with somebody, and they’ve got all the bonifides, but you know, there’s just; it’s not sitting well with me, there’s something about them that’s not sitting well with me. If I question their integrity even this much, it’s not worth it.
There are so many other deals out there to look at.
Ryan: Yeah, there’s too much opportunity.
Ryan: And speaking of opportunity, you know, you kind of mentioned at the beginning, Bitcoin and Ethereum, most people have heard of these two, particularly Bitcoin, because it seems like it’s in the news all the time, something or the other.
But how does somebody kind of start to make the decision, okay, I want to get in, I’ve got a couple thousand dollars of what I’m willing to put into Bitcoin right now, or some type of cryptocurrency. Have they missed the boat on Bitcoin?
Bitcoin is trading almost upwards of $6,000 recently; it’s come up from say $3,000 not too long ago, it’s quite volatile. Do they kind of wait for a pullback, or do they just say, “Okay, I’m going to buy some Ethereum, I’m going to buy some Bitcoin, see you in ten years.” You know?
Teeka: Yeah that’s a great question. So one of the things that I always talk about with position sizing, which is what we’re talking about, is that I believe that the moves ahead of us are going to be so massive, and that we are still getting in so early, that you don’t need to put in an enormous amount of money.
You can literally use tiny stakes, and transform them into life-changing amounts of money. So I think the first step is, get clear on, if I lost all this money tomorrow, if I put it in Bitcoin, I want to make sure that it’s not going to have me begging my parents for hamburger money, and sleeping on their couch.
So once you’ve got that piece done, then if you’re looking to get into Bitcoin, I would suggest what you could do is maybe buy a half a position now, and Bitcoin is very volatile. And then on the first 50% pullback that you see in Bitcoin, buy the second half.
And that way you’re not going to get the perfect price, but you’re going to get a good price. And then just leave it alone. And to your question, is it too late to buy Bitcoin? Absolutely not. I think Bitcoin will hit $15,000 next year, and I expect Bitcoin will have a trillion dollar market cap.
Right now it has about just under a $100 billion market cap, so it’s a 10x from here. So you put $1,000 in, you turn it into $10,000.
I mean, I’ll take that all day long.
Ryan: A little bit easier in cryptocurrency than picking up Apple stock.
Ryan: And you talked about this volatility. I don’t remember who it was, but I heard someone mention lately that the volatility of Bitcoin compared to a dollar is about ten to one. Meaning that Bitcoin is about ten times more volatile.
And they believe that as it becomes less and less volatile, it’s going to be easier to actually rely on as a currency.
Ryan: Now, we’re in an age where news, whether you call it FUD, fear, uncertainty, doubt, really drives the prices of these cryptocurrencies up and down it seems like.
Teeka: Mm-hmm (affirmative).
Ryan: Even more, to an extent, than the stock market. Because there are bigger gains and bigger drops. Do you feel that the marketcap has to go up to help control that volatility? So that there’s, it’s spread out wider?
Do you feel that the news has to turn positive? What do you feel is going to help decrease that volatility, which in turn will lead to more widely accepted use of an actual currency?
It’s kind of like the chicken egg thing almost, but there’s got to be some point where it transitions.
Teeka: This is an excellent insight, and it’s a fantastic question. And it shows that you really do understand the space asking that question. So generally the life cycle of new ideas is that it’s the speculators and the early adopters that first come into it, before it goes into mass adoption, and then becomes what we would consider real technology, right?
Teeka: Like, Amazon would be a prime example of that. It went from pennies to a hundred and change, and then back to like, five bucks, and now it’s got over a half a trillion market cap.
Teeka: So what you’ll see is a similar situation with Bitcoin. Now we also saw Bitcoin go from pennies to $1,200, back down to $200. So it had its massive, utter destructive crash. It’s now in its phrase of going into its mainstream phase.
Now, in order for it to be a currency, you’re right, the volatility has to diminish greatly. And it can’t diminish greatly until it gets really above a trillion market cap.
Teeka: So the question is, what takes it to a trillion market cap if it can’t be used as a currency? And it will be speculation that gets it there.
Teeka: And so, as institutional money starts coming into the marketplace, which is what I anticipate will happen in 2018, and I’ll tell you why I believe that in a moment, that speculation will be self-reinforcing, and it will take Bitcoin to the point where volatility will come way, way, way down, and all of a sudden, it’s now something you can use legitimately to pay wages and buy things and really use as a currency.
Because right now, it’s really not a very good currency. It’s more of a speculative vehicle that is also a storehouse of value.
Ryan: Mm-hmm (affirmative). And so when you look at, you kind of talked about position sizing and entering in and looking for, I believe you mentioned a 50% pullback. You know, typical stock investors might look at, okay if a stock pulls back, or the market pulls back 10%, it’s a correction.
If it’s 20%, 30%, we’re entering maybe bear market territory, you know, buyer beware. In cryptocurrency, I remember not too long ago, Ethereum, I feel like it went from $300 to ten cents or something in a day.
Teeka: That’s right.
Ryan: But then, next thing you know, it was back towards $400, and then it’s pulled back. So the volatility ranges are quite different. Do you kind of think that, ’cause what I’m trying to get at here is, there are people who try and time the market. They try and time the stock market, they try and time the cryptocurrency market.
And what I’m trying to figure out is, are you more just put something in, if there’s a pullback, put some more in.
Ryan: If it pulls back even further, look at your position sizes. If it makes sense, maybe buy again. But don’t get too caught up in the plus green balance in your account, or the minus red balance, you know? Because-
Teeka: Yep, 100%.
Teeka: Yep, 100. That is the way to go, because we could have one announcement tomorrow, and Bitcoin’s $25,000, and then you would have missed it, right?
Ryan: Mm-hmm (affirmative).
Teeka: So get in, get your feet wet. Get started with something that’s not going to crush you if you’re down 50 or 60%.
Teeka: Don’t go put $200,000 in, and you’re down 60% tomorrow, and you’re ready to jump off a building. Don’t do that, that’s just not smart. Be rational, get your feet wet with this technology. Know that you’re not going to get a perfect print, right?
Put your ego aside, throw it out the room, it’s got no business here. And then again, break it down. You will see a 50% pullback in Bitcoin at some point. Now we might go to $15,000 first, before that next 50% pullback.
But you will see one. So put your half position on, wait for the first 50% pullback, put your other position on, and strap in for the ride, ’cause it’s going to be awesome.
Ryan: It’ll be a little bumpy, but it’s going to awesome.
Ryan: And that leads me to emotion. I trade options myself, as well, and for me, stock trading and specifically option trading, fits my personality profile. I’m very unemotional; I’m disciplined, I look for the best, and then enter the better. I’m very strategic about it.
But the average person as we know, is reactive, when it comes to investing, they want to buy Amazon when it’s now trading over $1,000, and they want to sell it when it’s at $800, and buy it back when it’s at $1,200.
You know, that’s just the nature of the beast, and that’s been part of the challenge. And I look at the same challenge with cryptocurrency, except I see it on a more extreme level, because it has an even bigger FOMO mentality.
Where people have this fear of missing out, they think, I could have bought Bitcoin at pennies, and if I would have bought $100, I’d have $70 million or whatever, you see these articles all the time.
And for me even I would think back, I logged into one of my accounts and was going through the history and seeing like, “Oh, I sold 10 Bitcoin at $250 a piece. That was probably not very good.” And I had done that multiple times in these much lower numbers.
But back then these were profits, right? These were real profits. And who knew that it’d be $5,000, $6,000, $20,000, whatever. So there is even some of this internal FOMO of like, what’s the next one? Oh, I’ve got to find it.
And that causes people to try and get the bat out and swing for the fence and put money that they can’t afford to lose, or that they think this will happen.
And outside of position sizing, how do you advise the folks that you educate about cryptocurrencies to protect themselves from this FOMO, emotional spiral that can happen?
Teeka: Yeah, so again, a lot of the time, every other week I put out a video, and I talk a lot about rationality, being rational. That we are our greatest enemy.
On our journey to creating wealth, it’s not the government or somebody else or our parents who are holding us back, right? It’s all up in here. Because money doesn’t care what color you are, it doesn’t matter what school you went to; it doesn’t care if you read well, or if you are good looking, or if you are ugly. Right?
It just doesn’t care. So we bring all of our own drama to a creation of wealth. So some of the things that I do to help us protect ourselves from that is diversification, to be humble enough to say, “Look, I could recommend an idea that could go to zero.”
And so we need to be diversified, and the other thing that we do is we use something called uniform position sizing. So we put the same amount of money into each position, and the beauty about that is that we don’t over own a loser, and we don’t under own a winner.
So I’ll give you a prime example. I recommended a very, very small cryptocurrency earlier this year at 13 cents. And I said, “Look, if you’re a small player, probably put $200 to $400, maybe $500 max in it. And if you’re a bigger player, you can put $1000 into it.”
And so that particular coin went to as high as $50. So people that put $300, $500, turned into $150 to $250 thousand dollars.
Ryan: Yeah, yeah.
Teeka: Right? So, I’m not going to say that every single idea I look at does that. There are some ideas that haven’t worked out. But when you have a portfolio of ideas, and you use uniform position sizing, a few things happen.
One, you’re going to get lucky, right? You’re going to have a couple of trades that are just amazing. Two, you don’t care about the volatility, because you don’t have that much money up at stake. Even if you have ten ideas with $500 each in, $5,000, for most people, they lose $5,000, if everything went to zero, yeah, it’s gonna suck.
It’s not pleasant. But it’s not going to put you in the poorhouse, right? You’re not going to be sitting outside of Grand Central Station with your hat in your hand begging for burger money. It’s just, so and you’ve got to figure out what that number is for you, right?
And then just be rational, let time do the heavy lifting. Because of the beauty here Ryan, you know I get passionate about this, you’ve got to forgive me, but the beauty here is we’re so early.
Ryan: Mm-hmm (affirmative).
Teeka: We’re so early, that we don’t have to be that bright, right? We have to be bright enough to have a core portfolio of great names, to have rational position sizing, and then be bright enough to do nothing but wait.
Ryan: Yeah, and where do you think we are in it? I’m from Chicago, so say Michael Jordan, we’re back in the ’90s, we’re playing the Utah jazz, you know. Are we, Jordan, just hit that first dunk, or are we partway through the halftime? Where do you think we are in the game for [crosstalk 00:33:18]?
Teeka: I would say that we are in the first half of the first quarter.
Ryan: So very, very early.
Teeka: We are very, very, very early. Yeah, very, very, very early. There’s a lot more in front of us.
Ryan: And so, I have to agree with you when you talked about the uniform position sizing, because I think that’s a game changer. Because oftentimes, you see people, they bet big on one idea, and then they put a little bit of money in something else, and the little bit of money takes off, and the big idea goes down, and then they’re like, “Ah.”
It creates, even more, emotion because they didn’t put the same amount into the same thing. And I’ve found that when I trade stock options, I always buy right around the same amount. Now, obviously, when I’m buying contracts for stuff, I have to kind of do it as close as possible, but I’m buying $20,000 at a time, and one goes up 100%, the other one drops 15, I’m golden.
But if I’m moving it around, that’s when you start to get in trouble. So I highly, highly recommend that people take that advice. And you mentioned, you know you had one you recommended at about 13 cents, and it climbed up quite a bit. And I’ve actually, I own this particular coin myself.
How do people, you know, and to give a tiny bit of backstory, when you buy a coin, you’re buying it on an exchange, maybe you’re using Coinbase or Bittrex or whatever. You buy the coin, then normally you store it a wallet, or you use a paper wallet, it could be a wallet that’s on your computer, it could be one that’s a Trezor wallet or something like that that’s offline.
And a coin goes up from say, 13 cents to a buck. Well, I don’t know exactly if you recommend people, hey, take some of that money off the table, so now you’re playing with House money.
But if you do, part of the challenge I feel like with cryptocurrencies is I’m not logging into e-trade, clicking a couple of buttons and saying, “Sell.” I’ve got to get back online, maybe use a VPN for security, or go offline for my paper wallet, do all these different things to get back on to then sell.
Which seems like a lot of work, but at the end of the day it’s not that much work, but I know human nature’s gonna make people not going to want to go through those few extra steps, because they’re few extra steps. Which could cause them then to be more committed to a position.
Do you find that’s a problem just to say, “Hey, I’ve got $200 here, I’m going to let this bad boy run.” Or do you really encourage people, “All right, you’re now up 200%, 400%. Pull 100% back.”
Teeka: That’s a great question. What we do with the short-term trades, we’ll take profits. For instance, I just recommended something a couple of weeks ago, up 200% and we’re out. On my longer term, more investments, what we’ll do, I call it scooping the crane.
So every now and again, we’ll maybe take 10% off.
Teeka: So we’ve done that, there’s a privacy coin which we made a lot of money on, I think 12, 1,500%. And along the way, we’ve just taken a little bit off. 10% here, 10% there. We just recently took off another 40%.
So that’s generally the way that I handle that. Because I do like to, I do think you should take a little taste along the way, because it makes you feel good, right?
Teeka: And you’ve recouped your initial investment, and then we still have a piece ready for the continuation of the move.
Ryan: Mm-hmm (affirmative). And I’ll go back to again trading stock options, because I have routines, and I’m sure you do as well, to kind of analyze what’s going on, look at my returns. I do a weekly debrief on positions I looked at entering, but maybe I didn’t.
And just kind of reviewing, constantly trying to learn and evolve my system and strategies.
Teeka: Mm-hmm (affirmative).
Ryan: Do you look at what you’re doing in a similar light? And have you kind of found early on, or even now, you’ve thought, man, I made a big mistake, I thought, I met this founder, or I went to this event, and I saw this opportunity, and something didn’t sit right. I wanted to act on it, but I didn’t for some reason.
And do you look at this kind of things as big mistakes, or have you experienced anything like that?
Teeka: If I met somebody and there was something either in the process or on the person that didn’t meet my criteria, and I didn’t buy it, and it went up, I never feel bad about that.
Teeka: Because you’ve got to stay true to your process.
Ryan: Mm-hmm (affirmative).
Teeka: Otherwise you can fall prey to the shiny syndrome, right?
Ryan: Mm-hmm (affirmative), yeah.
Teeka: Just, oh let’s do this, oh let’s do that, let’s do this, let’s do that. I know how I make money in cryptocurrencies and it works.
Ryan: Mm-hmm (affirmative).
Teeka: And so I stick to my methodology. Now, if I have an idea that doesn’t work out, and I look at that idea, and I say, “Okay, was there a problem in my process?”
Ryan: Mm-hmm (affirmative).
Teeka: Right? And so if there is a problem in my process, or if I was subject to FOMO which has certainly happened, then I say, “Okay, you got sucked in by FOMO, that’s a rookie mistake, learn from it.”
So I would say, if I look at where I have, a couple of losers that I’ve had, I would say I was probably a victim of FOMO, rather than it being a bad project.
Teeka: Right? A good project bought at the wrong price, is still a bad trade.
Ryan: Yeah. So it just comes back to, again, controlling emotion. And in anything to do with money, emotion is usually the biggest culprit.
Teeka: Yeah, we call it riding the fear curve, right?
Teeka: So you want to buy when there’s a lot of fear, and you want to sell, or take some profit, at least, when there’s a lot of greed. Easy to say or to do, right? Or to do. So what we’ve actually done, and this is through my own hard-learned lessons, is we’ve created a series of tools that will tip us off when fear is really high.
Teeka: And that’s when we’ll take advantage of trades. So three, four weeks ago, China was banning ICOs, and there was enormous fear in the market. And our indicators were going crazy, like, buy, buy, buy, buy, buy! And so we actually put out a recommendation on a Chinese project that was just getting hammered, that was down to $8.
We bought it, and then when the world didn’t come to an end, and then we started climbing the greed curve, it was $32 a week later.
Teeka: So that’s putting the fear/greed curve to work. Now, again, I will tell you it’s difficult to do. You’re bucking a million years of evolution, of going against the herd, going against the trend. Of doing things that you think will result in your financial death.
Right? But so I’ve trained myself to, if the idea of putting on the trade absolutely terrifies me if my insides feel like they’re going into liquid, and I feel like I’m going to vomit by buying it, you’ve got to buy it!
Ryan: Mm-hmm (affirmative).
Teeka: You’ve got to buy it. If buying something, oh I’m so confident, this is the, you know, if it’s an easy decision to buy, I generally will wait. Because it usually means I’m pretty high up on the green curve.
Ryan: Yeah. And let’s talk about buying for a second because there are different takes on this. So there are folks that believe that typically you need Bitcoin to buy some of these other altcoins. You can sometimes use on some places, buy some of them without Bitcoin, with dollars or something.
Ryan: But how does somebody prepare themselves to take advantage of these fear-based opportunities? Because obviously with this pullback, if I would have had, say I had $10,000 sitting there ready to go into the market, but I had it stored in Bitcoin, I would have experienced it being pulled back as well, still opportunity, but I’m losing some of my value.
If I had it in dollars, I’m not taking advantage of any, maybe appreciation. Do you recommend people do one thing versus the other?
Teeka: See, this again, this is tricky right now, because there’s a lag between where you buy your Bitcoin and actually get it available.
Teeka: You’ve kind of got to have just Bitcoin sitting there, ready to opportunistically trade. Now Coinbase has said that they’re going to offer instant purchases.
Teeka: So you can buy your Bitcoin immediately and have it available immediately. I don’t know when that’s rolling out, or what limits they’re going to put on that. But I think that’s a great step in the right direction because that’s a situation where I can see something opportunistically, I can convert my fiat into Bitcoin and then buy it.
But that’s an excellent point because I struggle with that myself. I’m like, well okay, so my Bitcoin’s down, I want to buy this other thing, but I really don’t want to get rid of my Bitcoin, ’cause my Bitcoin’s cheap.
Teeka: But then if I buy Bitcoin, I’ve got to wait a week for it to clear. So then the math I have to do is I have to say, “Okay, over the next two to four weeks, which one do I think is going to move up more?”
Teeka: And then I say, “Okay, do I think this will outpace the move in Bitcoin?” If I think that’s yes, then I’ll buy it.
Ryan: And here’s what I’ve been doing, just to kind of share with folks. This is another strategy, and it depends on your availability of funds, and how much you’re dealing with position sizing. But what I’ve been doing is I do position sizing as you mentioned, so say I wanted to buy $1,000 of some coin.
Teeka: Mm-hmm (affirmative).
Ryan: If I’ve got to trade the Bitcoin to do that, what I’ll do is I will purchase another $1,000 of Bitcoin and have that come into my account. It won’t show up for another seven days or so, but at least I’m getting it at the same price, and I’m kind of swapping the two out.
It’s not perfect by any means, but I just struggle like yourself to say, “All right, I want to sell some of this Bitcoin to buy this,” and then knowing that in a few days, that Bitcoin’s going to go up or whatever it is, and you’re taking a bit of a gamble to do that, so.
Teeka: Yeah, I do the same thing. You know, I have a core Bitcoin holding, and then I’ll have extra Bitcoin for trading. And if I’ve used up all my extra Bitcoin that I have for trading, and I’ve got to go into the core Bitcoin, I always replace the core Bitcoin.
Ryan: Oh okay, yeah.
Teeka: Yeah. So to keep my core position always at this certain level that I want it to be at.
Ryan: Wonderful, wonderful. Well again, I appreciate the time. Before we start to wrap up here, I wanted to ask you, is there any final advice, thoughts, over the last several years of what you’ve learned that you would encourage, just kind of your normal, average folks who might not be early adopters yet, to understand about Bitcoin, Blockchain, cryptocurrency, in general?
Teeka: Yeah, I would say, get started. Even if it’s $100, $200. Last year, I bought my daughter for her birthday, $400 worth of Bitcoin. And it’s worth $6,000 today.
Teeka: Right? I mean, just get started, just get your feet wet. Go to Google, read some articles, go on Bitcoin.com. Just understand this, and I would say if you’re sitting there and you’re listening to this, and you’re saying, “Oh, I’ll do it later.” Or, “Ah, this sounds interesting, but I think it’s kind of BS.” You’ve got to ask yourself, what if you’re wrong?
Teeka: What if you are wrong? What if this is another Internet? What if this is bigger than the Internet? You had the opportunity to participate in it, and you didn’t. Right? What if this is Apple computer at $5? What if this is Microsoft at $10, pre all the splits?
And somebody sat down with you and said, “Listen, this company’s going to change the world, it’s going to be one of the most profitable companies in the world.” And you’re like, “Eh, Nah, we’ll see what happens.”
Ryan: Right. And like you’re talking about, you have much higher upside. And if you use what you’re talking about with position sizing, doing it uniform, you have very little downside.
Ryan: So at the end of the day, I mean if it is Apple at $5, or Microsoft or whatever, and you’re putting in a total of $5,000, of a couple of thousand dollars, I mean that could be literally life-changing money.
Teeka: Life changing.
Ryan: And it doesn’t even take ten years. I mean, think about where we could be in ten years, and I look at it, you kind of said, “What if this is another Internet?” And it reminded me of my thoughts on this. And I think that this type of movement is actually larger than the Internet, because we’re more progressively advanced, and I think it’s going to be a larger disruptor.
Because not only does it disrupt technology, it disrupts currencies, it disrupts so many different types of things, that I think it could be a total game changer for our whole humanity, you know? There’s so much opportunity for different things that it can do.
I mean, very simple things like you mentioned with making documents no longer tamper-proof, and all the way to changing currencies. So do you feel that way? I mean, do you kind of get that sense that the disruption is that big?
Teeka: I do. I have to be cautious, Ryan, about being branded a zealot, and I have to be … You know, I have to exercise a measure of restraint. But I’ve lived through an incredible period of time, right? From the 1970s to the present.
I’ve seen things happen that I never thought would happen. And as I pull the camera back, and I see the progression of this technology, I’m with you. It will touch every single facet of our life. The cryptocurrency market will become one of the world’s largest asset classes; it will rival the equity market, which is over $60 trillion big right now, versus the current $200 billion.
It’s impossible to overstate how big a discovery Blockchain technology is.
Teeka: And but it will unfold over time, and there will be panics, and there will be fraud, and there will be government crackdowns, and there will be all this fear, uncertainty, and doubt throughout this process. Just like we saw with the Internet, just like we saw with the rollout even of electricity, of automobiles, of the railroads.
There were all kinds of crazy things going along the way, trying to impede progress. But the bottom line is, if you got in early on any of those major trends, and were just smart enough to do nothing but just hold, you made a goddamn killing.
Ryan: And I think that’s a key thing, just realizing the power of standing your ground. Act like Warren Buffet, you know? Don’t sell. Just hang on for the long term. And it’s amazing what could start to happen.
And like you said, in there, there’s going to be so much of this disruption. And to me that leads me to believe that there could be a new front-runner, there could be a different Bitcoin, or there could be some other cryptocurrency that hasn’t even been thought of yet-
Teeka: Hasn’t even been created yet, yeah.
Ryan: That is the golden ticket, you know? So paying attention, educating yourself now. And that leads me to, first I just want to be so grateful for your time, hopefully, everyone’s enjoyed all this information and insight, but your journey’s just getting stared.
And I’m no expert, I’ve taken the time to educate myself and read a lot about it, watch a lot of it. And I’m starting to look at attending events too because again, I see where this is going.
But the next step is you can just click on the link below to learn more about what Teeka is doing, and how you can learn from him, follow some of his suggestions, get his insights into what’s happening within the cryptocurrency space.
And I highly recommend you do it, simply because I’ve followed several of his suggestions, and I know the results that I’ve experienced for myself, and I see what other people are getting as well.
But more importantly, in this world of cryptocurrency, you have to decide who you can trust. And I fully believe that you can trust Teeka and his team. Not simply because I know him incredibly well, because I don’t, but because I see how he prepares research, and I see that he’s doing the right things.
Like, he’s flying somewhere, meeting the company, talking to them. He’s attending conferences, he’s knee deep, to waist deep, to head deep in this stuff. He’s not just like a scratching the surface type guy. And that’s what you want. That is what you want, and most importantly I see my history, my roots of all the way since 2003 when I first learned to trade stock options, I always looked at it from, how can I protect myself?
If someone says, trading options are incredibly risky; they might say the same thing for cryptocurrency. But there are ways to mitigate your risk; there are ways to protect yourself.
We talked about some of them today. You know, diversity, uniform position sizing, protecting by only investing a certain amount. All of these things are again the tip of the iceberg of what you could be learning from Teeka and his team.
So again, check out the link below, check out his information, I highly recommend you invest in his products, they’re incredibly inexpensive for what value you’re getting, and we’ll see you on the other side.