[00:01] hello followers of the four year journey this is bob lucas here on june the 15th to 2021 two and a half years since the original video and here we stand today just shy of 40 000 and around 10 times higher than where we were during the first video that is really exciting for me very encouraging that we are sitting on a 10x gain and that's the the half glass full kind of view of this bull market
[00:31] we're 10x up we're at 40 000 two years ago if you had told me would be at 40 000. that was the expectation but um just realizing that position today is exciting and it's a great place to be um i don't look at it from a 50 decline we had a pretty surprising to some extent 50 decline more recently but we also had a you know 40 50 decline with the march capitulation we had this uptrend here that blew
[01:02] everyone away in terms of its strength and its relentless move here a six x move over just four or five months we had something very similar to begin the four year cycle if you recall very few people were on board on this so early coming out of a bear market people were still really in shock from the 12 month 85 percent decline bear market so the point is that really and some of this is hindsight of course but when you look at the way this four
[01:32] year cycle has behaved it has been difficult for most people to get on board and to stay positioned and to be sitting today in a 10x profitable position because of the extreme volatility volatility that we've seen on both sides and the sort of outlier moves relative to the prior cycles if you look at the last four year cycle it really was a nice consistent and even even the size of these bars here just tell us that we didn't have as much of the volatility
[02:03] we had plenty of 30 declines of course but we had a mostly methodical process all the way up to a blow off top and you know a lot of us were kind of just looking at that as a model and maybe to some extent sort of fixating too much on how this cycle should unfold based on the prior cycle and the lesson of course is that every market is different every cycle is different they do rhyme of course but within each cycle they have the freedom to behave how they choose but right now
[02:34] you know i think a lot of people are panicking they've um they're looking at this down 50 percent and they're worried it's going to go further and it's going to keep going down or they're worried that the four-year cycle is possibly topped and those are legitimate but i think most of those are coming from a position fear and not from a more rational view on where this bull market stands most or a lot of people ended up you know not getting the right position early on or selling at the wrong times and then
[03:05] buying back when everybody started putting on their laser eyes and talking about uh super cycles people started adding more and adding more and i saw plenty of people talk about borrowing money at the 50 60 000 level and once you lever up at the wrong time and the wrong position then when a 50 decline comes you're just not ready to be able to uh to handle a move like that because of just how painful that position becomes to you for
[03:35] getting in at the wrong time now where do i personally stand on this four-year cycle i think we're just being shaken out again i think a lot of people um you know with now the involvement of larger players institutional players a lot more government focus and regulatory which means a lot more news cycles a lot more attention in general we're seeing the volatility the volatility is here to stay in my opinion and when i look at this chart and i keep saying go back to the monthly go back to the quarterly
[04:05] yeah there's a massive bar there yes it's not common for bitcoin in a bull market to decline by 50 but here we are sitting at the 10-month rising moving average and we're still in my opinion early enough in this four-year cycle just past the two-year peak where i don't see the 60 000 high as a peak for this four year cycle yes it got frothy yes sentiment was uh fairly fairly extreme at one point but
[04:37] was it a blow off top was this rounded sort of top here a blow off top just 3x from the prior 2017 high i highly doubt that i do highly doubt and if you look at the price bull market for example it took around 27 weeks to break out new all-time highs it took around 21 or 22 this time around it happened sooner we got ahead of ourselves sooner just like we got ahead of ourselves early in the four-year cycle and we had to sort of come back and consolidate and flip the pendulum
[05:09] back down i think the pendulum again swung too far too quickly and now we have to consolidate those gains we also had a situation where we had larger institutional players come into the market at the 10 000 range 15 and 20 000 range and unlike you and i who have a smaller position of course relative and who see this more from a longer-term view who see this from a life-changing monetary system institutions don't see
[05:40] it the way you do there are exceptions of course institutions they want to make their money and when they get into something that within a quarter or two quarters ends up being 5 x up on their portfolio what they're going to do is they're going to liquidate they're going to sell that position because they've more than met their you know their goals their they want to realize that profit they want to be able to put that onto their brochures and advertise to their wealth clients
[06:11] that their returns and and their funds have far outpaced anything else that's out there so they want to be able to showcase that so we just had a situation where we've seen massive distribution after a massive period of accumulation massive distribution and it's just going to take some time from here i believe we're going to take some time to re-accumulate with re-accumulation will be needed and um once that reaccumulation phase ends which may not be until the summer
[06:43] the early fall i think we'll see a resumption of this primary bulk trend and i think the four year cycle top is still ahead that four year cycle top may be even further into the four year cycle and may not be as i've originally thought more towards the end of the year that of course is based on the prior two cycles that really topped almost right at the three year point i think this cycle now based on the way it's behaving here and and the expectation i have that some more accumulation will be needed there's no reason why this cycle
[07:15] may not go until april or so before coming to a peak now some people say well what about going down to 20 000 or maybe the bear market peaked again i'll reiterate i do not think the bear market has peaked but sorry had the bull market has peaked and that a bear market started i do not believe that but do i say can i say that in absolute terms no i cannot i never can i never have um because markets can surprise and we just never know in the end
[07:47] now is there a situation where 20 000 can be hit yes there is and i give it maybe a 10 to 20 possibility at this point that we still have one more of what i call 60 day cycles ahead of us or two more that is a decline down to the initial breakout point of the peak of the 2017 high so that is something that we need to be prepared for i'm gonna i put together a little clip of some uh prior videos that i've shared where i
[08:19] talk about expectations in general and what the market um you know what mike could do at any given time and how we don't want to be in this sort of absolute mindset that really can wreck an investor so just listen to this little clip and i'll come back advantage of this opportunity now does it have to work out this way it doesn't right we could be looking at a double top with twenty thousand and then the next four-year cycle low coming back down to three thousand
[08:50] that's a possibility i don't want you to think that the cycle has to play out in this way i'm only telling you how i believe it's in a play out based on a longer time frame 16-year asset cycle and the fact that i believe we're still firmly in a secular bull market for bitcoin and under that scenario this is what i believe is the most likely outcome to play out and that's why we still have to be aware of the alternative possibilities we have to be aware that we could indeed
[09:23] be looking at sort of eight years of sideways chop right where it gets to twenty thousand kind of does something like this it's possible and then the next eight years you get the point right it's more of a sideways chop that is a possibility which is why i keep saying when you invest today you're getting in near the bottom of a four year cycle and that you're investing with money that you can afford
[09:53] not necessarily to lose nobody can afford to lose anything and nobody wants but you're not betting everything on this right you're not going to cause catastrophic harm to you and your family but putting in way too much at this point because there's no point there's no need if we're going for a you know 30x move from this point or 100x move it from you don't need to be more than let's just say 10 of your you know of you of your wealth
[10:23] allocated to this and that's even high you just don't need to okay because we're looking at such massive gains not only that if you're putting in too much capital at this point if you're if you're looking at the potential here and thinking about owning private islands and a suite of fast cars what's going to happen is you're not going to be able to ride the big capitulations or the big shakeouts that the market's going to give and there will be shakeouts and i'm talking about 20 and 30 corrections in bitcoin
[10:54] over this period at some point if not one at least one but if not one at least maybe two or three and if you're taking in the mindset that i'm going to put everything in right here then you're not going to be able to hold those gains you're going to basically uh give it back you're going to sell out at some point and then you're going to then you're gonna be in an undesirable position that you're not gonna have you're not gonna be focused on the plan and the four-year cycle and you won't have the full position that you need okay right i mean when you're looking
[11:24] for the long term you have to be content with the market in the short term and it's gyrations and it's ebb and flow we don't know where it's going to go like we didn't know on the way up you know i thought and you look at my previous videos right i did talk about a couple times the possibility that that bitcoin could just go straight up right but that wasn't my primary expectation my expectation was get your position here and i think it gets caught at some resistance around the 6400 area
[11:55] and i thought it would chop around this area in the summer and not until maybe august start to begin to break out of this 6500 area and begin its way up over the next six months from there towards a 20 000 area it did this much sooner than i expected so what i'm outlining right now on the on the flip side of this is that it may do something that i'm not expecting we need to be prepared for that and the reason for that is if we are not prepared for a sharp down
[12:26] decline at this point we are susceptible to dumping all of our position on a massive decline based on the fear that it's all over or um there's some some elliott wave uh type uh analysis out there that's saying bitcoin is gonna go back below 3000 or something silly like that or that um the u.s government's gonna basically ban bitcoin and and it's all over any one of those narratives now look
[12:56] we're in this for the long haul there are many threats there are many narratives out there that can be bearish and they will come along and that will drive price down low on the short term and we need to be prepared for all those we can't take only the good we can't take only the rallies and then choose to you know turn a blind eye to the possibility of declines they will come and when they come the mindset needs to be that this is just part of the process this is part of investing this is part of investing in a very
[13:26] volatile and essentially new technology and asset class and there will be massive swings like there was an 85 decline in a bear market even in the bull market you can get 40 even 45 declines from the top right at any given point but the reality is that this is a highly speculative market it's driven by its pure speculation and for that reason we're going to see and we'll continue to see in the future these
[13:56] massive moves to the upside and downside so what's the point then the point is that as a hodler and somebody looking at the investment from a three to four year time frame these intermediate cycles that you know that rally by up to 100 and decline by 30 and 40 percent are really part of the journey and until we embrace and accept the fact that we're going to get these massive swings at certain
[14:26] times now these are probably as big as you're going to see of course but they are still well within you know a couple of standard deviations of expectation so we need to be just accepting of this fact and again focus on the longer term perspective and the longer term goal which is a cycle that is an uptrend a cycle that over the four years is more likely to rally and move in an
[14:57] uptrend fashion for three to four of those years with the exception that we're going to see these massive counter trend moves or even corrections and bear markets within a larger four-year cycle and if we're not prepared for those types of moves then essentially what happens is we move from that firm hollow mindset and we allow the more recent and intermediate price action to influence our decision making so our decision making and our intentions are on the longer time
[15:28] frame and the longer goal but we we end up sort of panicking to a large extent on on the more intermediate time frame losing sight of really what the goal is about i've also said in numerous videos perhaps maybe in every single video that nobody ultimately knows where price is heading for bitcoin or for any asset class if it was that easy and if we knew in definitive terms and absolute terms
[16:00] then it wouldn't be a question we would just know but we don't know we don't have a crystal ball and we plan for these events and we plan for these events by having the right mind mindset and the right allocation knowing full well that along the way up we're going to see 30 declines and again i'd like to say this but a thirty percent decline at the hundred thousand dollar level is a thirty thousand dollar decline we may get a situation in the future
[16:31] where we hit a hundred thousand we decline to seventy 000 we get everybody puked their leverage positions and then we make a run to 200 as an example that's going to be a possibility we're going to have to be hyper aware of that it's not going to be easy i can guarantee you when you're sitting on 100 dollar bitcoin it's not easy to hold that in the face of a decline like that but these are the types of challenges you need to set yourself up for it's not okay to just dream about how much money you're gonna make you have to
[17:02] dream about how you're gonna handle scenarios and situations in the future because they're gonna come they've already coming they've been hitting us recently we got hit with one here how many of you puked this capitulation in in march with coronavirus how many people thought it was all over okay they happen okay we a lot of people miss this big move up here as well all this happens it's going to happen again in the future we need to be prepared for them
[17:32] and with for whatever reason bitcoin topping out early like 60 70 80 000 and reversing into a bear market for two years and maybe getting out back down towards 20 000 or 25 000 right that is a possibility that i don't see occurring but it's always a possibility and if that were to happen and you still make some money that's fine that's just what the market that's what the market gives you that's what you take
[18:02] so hopefully from that clip you'll appreciate that nobody knows where the markets are going and if i've given you that impression over the last two and a half years then that clip that series of clips hopefully will remind you that nobody including myself knows exactly where this is going do we have strong conviction that bitcoin is heading much higher i do and i think a lot of people do and for good reason as well and there are plenty of reasons from a fundamental from a macro standpoint from an adoption standpoint on why bitcoin is going to succeed and
[18:34] why bitcoin is going to be worth a lot more than the one trillion market cap that it managed to hit recently and why it could be worth 10 times at this amount in the in the not too far not too distant future but nothing is for certain in investing nothing ever is for certain in any asset class in investing and we have to be reasonable in our expectations so the way we manage that is through our allocation to this sector by getting in very early and by having predetermined
[19:06] places where you're taking some of the table to reduce that stress of having too much of an open profit and to manage the overall risk that you face from a portfolio standpoint we manage that through our allocation to to to bitcoin or to this sector and i know many of the younger folks kind of scoffed at my idea of putting in only ten percent early on um to this and everyone's like you have to go all in and you have to go all in well you know some of you managed to go all in and have held all the way through and
[19:36] kudos to you but you're probably able to do that because you're younger you don't have as much to risk and there's more that you want to gain out of that so if bitcoin didn't succeed for whatever reason you'd probably be in a very similar position for other people who have possibly a higher net worth or have been investing for a decade or two decades who have you know who have earned their capital you just can't go out and uh and risk everything because you will have so much stress when it comes to managing that position that 50 declines
[20:08] will end up resulting in capitulation or selling at the wrong time or buying at the wrong time and averaging all the way up so the better strategy has been of course to get in as early as possible on this on this market and a smaller position early on that's held is going to outperform a much larger position that keeps getting added to as the market gets higher i've put together another clip from the prior videos that talks about allocation and risk a little clearer so i won't
[20:38] rehash all that let me play you another clip simply we want a position in bitcoin to take advantage of the four-year cycle opportunity to be able to walk away with it um significantly financially free right but we don't want to approach it with a sense that we're going to get filthy rich if you start thinking filthy rich you're actually probably going to end up
[21:08] not making any money to be honest with you and potentially even losing money and that's because it's just difficult to be significantly over leverage or over position to one opportunity and safely and and easily ride you know the ebb and flow nature of a speculative and volatile asset like bitcoin it's best to have a reasonable position a reasonably sized position that you will be able to sleep comfortably at
[21:38] night not waking up at four in the morning to check the price of bitcoin or when bitcoin has a really bad week for example that you are emotionally distressed by it purely because uh of the you know the amount of leverage and the size the position that you have is uh is just far too proportionally big for your overall wealth situation in your current lifestyle so for me personally the number the allocation that i want is
[22:10] a maximum of 10 percent of kind of liquid assets that so so for me you know i still want to own businesses and i still want to own a real estate i definitely own stocks and i definitely want to own gold i definitely want to own other assets and other income producing assets and this for me is just one component of my overall investing and
[22:41] wealth strategy okay so having an allocation of more than 10 in my opinion even though the opportunity is so great is uh i wouldn't call it reckless but it's unnecessary and certainly if it goes beyond 20 i would call that reckless 50x there's no sense there's no point in doing that even with a 10 percent allocation if we can realize the goal of this journey then we're
[23:11] talking about being you know 300 400 up overall on your disposable wealth and income so that's that's the perspective i think we need to take into this when looking at such a enormous possibility that lies ahead take a more sustainable allocation to this that allows you to see this as one component of an overall strategy and but at the same time right what's going to be very important is that we have to
[23:41] realize if it realize that reward if it gets up that high so you don't want to be like almost everybody else doesn't have a strategy they're going to get in here they're going to they're going to call themselves a hodler right and they're going to buy but they're going to get out at 7 000 and they're going to get a 9 000 or 12 000 or 18. if you're going to do this right reduce your allocation to a very manageable size so we can get to the point where if bitcoin hits fifty and sixty thousand
[24:11] and a hundred thousand and a hundred and fifty thousand that we have the exposure when nobody else or very few are going to be able to have that exposure so that's the trade-off and that's the reason why we want a manageable allocation because we want to be able to when prices at that point we want to be able to say huh yeah this is what we this is what we're planning for this was the at least the goal it wasn't the prediction it was just the goal and we're here now and we have a plan and we're going to execute to that plan
[24:41] all the way to the end and i've talked about many many times about position sizing and position sizing some people think that in a longer investment thesis that position sizing doesn't matter but that's not true position sizing is absolutely critical on all time frames and all investment so another reason why i keep in every single video emphasizing that your position needs to be structured where you can sleep at night and you're
[25:11] not allowing 30 and 40 declines in the market to significantly throw you off your overall thesis and your overall strategy and that's what's happening to many of you right now i know it is because i i know from the questions and the emails and the dms i'm receiving that people are not all of you many of you are firm and strong but many are capitulating and they're selling always at the wrong time so if your time frame is three years out and you're allowing yourself to be
[25:41] influenced by action over a two or three month period then you're essentially going against your thesis you're going against your process and you're allowing short-term price to dictate uh how you trade this the other question i've been getting a lot of is did i sell am i selling what am i doing with my bitcoin and the answer is simply i'm not selling a single coin at this point i didn't get to bitcoin um to get shaken out by a move like this certainly not after
[26:12] a 40 decline didn't get shaken out didn't come close to thinking of getting out after a 55 decline over seven months certainly not going to get shaken out of position right here the reason for me the reason for getting in early in a four-year cycle here is precisely to have a strong hand in a market in the belief that this for me is an investment and not a trade i trade all the time bitcoin on the short time frames with the goal of increasing my bitcoin
[26:42] but from a huddle and from a four-year journey standpoint this is an investment it's an investment i believe in and for that reason i'm holding on to my bitcoin because in this timing and the question is being patient unfortunately too many people who have bought into bitcoin see only the one side of that equation they see only the upside potential and they are motivated by greed and not through logical thinking
[27:14] just like any other investment or allocation of capital that i put to work for me it's an investment and investments and every investment comes with risk every investment comes with possibility and potential and it's with that in mind that i allocate my capital for me there really is no place for feelings and emotion when it comes to an investment when an investment becomes too emotional for you it means that you have
[27:46] invested far too much or you've risked far too much or your expectations are really not grounded in the sense that you understand and appreciate the risks and you understand the potential or you're pretty much looking at is the potential and what that potential might mean to you from terms of a life-changing event and you become blinded to that uh to that outcome or that possible outcome to the point where it all becomes extremely emotional or stressful for you so when
[28:17] we encounter moments like this as we're seeing here or for example this move here you pretty much don't know how to handle a situation like that because again you're emotionally too invested so i'm just going to warn you here when you approach an investment from a position of greed you end up basically with a position that only allows for one direction or one outcome and i feel that many of you not necessarily followers who have been on board from this from the beginning
[28:48] but many folks who get into this type of space lack the investment discipline and don't appreciate that an investment has risk and as a result they find themselves today in a situation where they will be unwinding or have already unwinded their position for yet another loss here's another risk here i mean i i've been training 25 years i've seen many bull markets um i i made a lot of money on some bull markets i lost it all and gave it back
[29:20] i made money and lost money on bear markets as well so i think i've learnt a few things about bull markets and bear markets and i think the number one rule here is that you never lose your position and too many people fall victim to this they they're in on the plan they see the long-term potential but they get cute and they think they can extract even more gains out of a bull market by getting out at certain times and trying to get back in at a lower
[29:50] price and let me tell you a bull market can be unforgiving to people who try and time the shorter time frames within the bull market if you try and time a pullback you may find that the market gets away from you and you will then not want to buy back in because you're going to you're going to have a higher price because of that and the market's going to continue and it's going to continue and you're going to be locked out of the market and eventually it will pull back
[30:20] and most likely it'll pull back right when you buy because that's going to be the peak pain point for you and what will happen then the market will reverse on you it will give you that 30 decline and again you'll be stuck with a higher price point and a bigger position and again emotionally it's going to be something that is going to really scar you in some ways and affect and impact how you um how you huddle through the rest of this strategy
[30:52] the goal of this is to have a position that is not so extreme that is not so large that is not a position that keeps you up all night and makes you you know dream about this and check prices at two o'clock in the morning and six o'clock in the morning when you wake up um a precise a position that yes is obviously meaningful and life-changing and impactful but at the same time it's gonna be something you can handle you need to be able to handle the gains the open profit that you have
[31:23] so you can get to the point where you can realize that gain and have a life-changing event as i said before if you need to take a little off a table on the way up i took a little bit off at 28 000. people some people said ah you know you're silly it's going so much higher yeah i know it's going so much higher that's the whole point the whole point is that i want to take some off the table cover my initial investment so i don't feel as if i need to sell at the wrong
[31:53] time in the future it's a planned event so planned events as part of the strategy to getting towards 250 or 300 000 are perfectly fine because they are on your terms every time you make an investment decision on your own terms you're winning anytime you make an investment decision that wasn't planned that was in response to action market action at the time isn't is is an event or is an action
[32:24] that is most likely not going to benefit you that is not on your terms and in your strategy fitting your plan and looking back most of the times that that happens um it doesn't serve you well so the key here is with the right size relative to your wealth and with the right frame of mind with the right expectations and with confidence in this bull market and this four year cycle you're able to withstand
[32:56] um and expect the volatility when it comes and to see that as just part of the journey up towards the end goal that's always been out there the volatility is not new for bitcoin and what happens is you end up looking at your portfolio from a from my peak standpoint from a drawdown and then you start to get afraid of losing that open profit because it's too big to handle i've talked a lot about that and too big a position ends up meaning
[33:27] that you sell at the wrong times and you buy back more again at a different time and where you start off with a very good price point on an average over time by responding to this extreme volatility in the market you end up raising that average price significantly and then what happens in the energy to maximize your gains by having a reasonable allocation early and then sort of hunkering down being accepting of volatility and
[33:57] embracing that to a large extent and also in many chances many opportunities taking advantage of that volatility we can see and ride our way through just like having the right allocation will get you through any scenario such as one that comes back down and tests the 20 000 breakout not my expectation but again a possibility that is something that having a reasonable allocation and the right mindset will allow you to get through but look
[34:28] the way i see it now simply is that right now we are sitting on an initial investment of a hundred thousand in the model portfolio so this is just a guide and everyone uses a ratio this just just outlines how 100 000 invested at that time would have performed without any making any real um any real changes to the portfolio except for a couple of initial buys and a buy at the marsh 2020 capitulation and a planned sell in december 28 000.
[35:00] that 100 000 is worth 1.17 million dollars with hopefully uh less stress and less headache and less management so look look at the positives yes the market's down 50 but it was down 50 percent or more in december of 2020 it was down 60 or so percent in uh i think it was what september 2019 so it's done this before that's been the
[35:30] character of this four year cycle again we don't know if this market has topped it could have topped again always a possibility but with the right allocation and the right mindset we can weather that we can get through that and we can see how we want to approach a situation like that in the worst case scenario down the road but right now focus on the fact that i do not believe that this four year cycle has topped that we may need to consolidate some more we may need to see some lower prices but overall i believe that this bull market up trend
[36:02] will continue they will resume it just a matter of when not if and for that reason having a reasonable allocation to this market will give you the exposure that you need and will end up being a life-changing event as a result thanks again for being here i hope you've enjoyed this video all the best and take care