Youtuber and blogger Alex Voigt’s “non-diversification investment argument” has sparked a heated debate since his post on January 7th. He believes that Bill Gates followed the advice of stock god Warren Buffett by giving up the majority of his Microsoft shares and diversifying his investments. However, this has resulted in a significant depreciation of Bill Gates’ assets in the future.
Most of the comments under his tweet criticized his viewpoint, and Ethereum founder Vitalik also retweeted the article, stating that this is terrible advice.
(
Regarding the debate on Buffett’s diversification investment, what financial advice did Vitalik provide?
)
Advertisement – Continue reading below
However, some members of the cryptocurrency community believe that this blogger’s investment philosophy is completely applicable to the cryptocurrency field.
Table of Contents
Toggle
Autism Capital: Must bear risks, diversification does not make money
Nick Drakon: Gambling without risk control
Autism Capital: Must bear risks, diversification does not make money
Autism Capital’s tweet claims that so-called risk management and diversification cannot make big money, especially when the amount of funds is relatively low. Even if you make 2 or 5 times the profit, it cannot change your life.
Therefore, investors tend to take higher risks in their operations, such as holding Bitcoin early on, participating in Ethereum ICOs, and so on. He said:
When you go bankrupt, it is wrong to diversify your investments. You must bear risks, whether it is participating in new public chains or using leverage, until you have substantial funds. Those who give advice on diversification have also gone through this. Although scammers always take advantage of this speculative psychology, we can only be more vigilant when making high-risk investments. If you truly want to enter this game, you cannot diversify your investments.
Nick Drakon: Gambling without risk control
Nick Drakon, the host of the Defi Sparks Podcast, retweeted Autism Capital’s tweet and rejected the above viewpoint.
He said that during his career as a professional poker player, people around him were always looking for ways to get rich quick. However, this idea of making big gains with little investment is completely wrong. He believes that it is a path to a lifetime of misery, a marketing myth created by brokers, exchanges, and gambling companies.
If you engage in high-risk trading and use high leverage, the most likely outcome is that you will repeatedly deplete your small amount of capital. Diversification and risk control are key measures to ensure your survival in a highly volatile market. If you don’t have an investment process that can withstand the test of time, you are just gambling.
Vitalik
Diversification investment
Diversification investment
Bill Gates
Further reading
Bill Gates AMA | Views on Web3 and Metaverse, explaining why he became the largest landowner in the United States
Bill Gates comments on the current economy and Bored Ape: Rapid economic changes in a lifetime, monkey pictures won’t improve the world