Value Investment Strategy

"Value investing involves picking up an 80-20 mix of large & small cap cryptos at a price that makes them undervalued by the market"

Strategy
Value Investing
Investment Frequency
One Time
Risk
Low
Investment Horizon
Long Term
Expected Volatility
-15% to +100% YOY

Capital Allocation

80% money is allocated to large caps and 20% to growing industries to form a long term portfolio. Coin is only bought when it is undervalued and 50% is sold on big rallies and then bought back again on dips to increase holdings

Value Investing

The basic concept behind value investing is simple: If you know the true value of something, you can save a lot of money when you buy it on sale. Most people when they need to buy a new TV, would wait for a Christmas sale and then buy at a discount, getting the same TV with the same screen size and picture quality for a price they would have paid otherwise. Why can't we do that when buying assets like cryptocurrencies? Well, there are 2 problems

  1. Finding intrinsic value of the cryptocurrency is hard
  2. To buy the asset when the prices dip, the investor has to monitor the markets 24x7, 365 days a week

Value investing is based on the idea of buying cryptos that are trading for less than their intrinsic value. It is an active strategy that involves determining an intrinsic value and then buying whenever the asset is available at a discount to the intrinsic value.

How it works?

Botsfolio tackles these problems in the following ways

  1. It uses various models to calculate the intrinsic value of an asset. For example one popular model for Bitcoin is stock to flow model.
  2. We use bots to monitor the prices and buy whenever prices dip.

Using Botsfolio value investment fund, investors can buy large cap cryptos at an attractive price which should increase long term growth prospects. Botsfolio only invests in cryptos with large market capitalization to prevent being venerable to any kind of market manipulation that plagues small cap cryptocurrencies.

But there's more to it. Now imagine that suddenly with an upcoming sports season there comes a growing craze for 4K TVs and everyone around you wants the TV you bought and since production remains the same, they are willing to pay a premium to buy over their next door neighbor. Why not sell your TV and buy back at a time when the prices come down? That is also something our bots are designed to handle for you. Crypto markets are prone to market hysterias when prices go over the top and every asset seems to be trading at multiple of their intrinsic value. That's when our bots will sell part of your crypto portfolio and wait for prices to come back so they can buy more and increase your holdings over time.

Investment Horizon

Since this strategy takes a lot of time to accumulate cryptocurrencies when market dips, the investor would get good returns if investments are held for a period of a few years. Typically crypto markets go through boom and bust cycles like every other asset every 3-4 years with smaller cycles going through every year.

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