FYI: Let’s say there was an asset that you thought had the potential to do really well. Not 50% better than the market, but fifty times better than the market. How would you go about putting this in your portfolio?
If you think there’s something out there that has unlimited upside, theoretically you would put all of your money and all of the money that you could borrow into it. But in the real world margin debt cannot be forgiven, and the relationship between risk and reward is not just academic. You should only invest what you’re willing to lose.
So how much exactly should you be willing to lose?
With the help of the ridiculously talented Nick Maggiulli, I attempt to answer this question. We’re going to use Bitcoin as an example, which began its meteoric ascent in 2017.
Regards,
Ted
https://theirrelevantinvestor.com/2019/06/25/unlimited-upside/
