Bitcoin Races Into The Dakar Rally?

What we can learn about investing from the Dakar Rally.

The Dakar Rally started over the weekend. It is a two week desert race (cars, trucks, motorcycles and so on) that used to take place in Africa but was moved to South America about ten years ago. Long time readers might recall how much I enjoy this sort of thing, and I usually try to create a blog post from something that occurs in the race. More recently my interest has expanded into trophy truck racing going to and taking many pictures at the Mint 400 in Las Vegas and I am trying to work out a trip to the Parker 425 coming up in February.

The picture accompanying this post is from a short track trophy truck race from down near Phoenix last spring, that is Bryce Menzies who is a very successful racer in short track and the longer desert races like the Mint 400. Here's a closer view of the trophy truck he drives from the Mint 400 inspection day;

This year, Menzies took a run at the Dakar, going down and competing for the first time and unfortunately it ended on the second day (it's a two week race). To give an idea of how popular he is, the first day of race coverage this year on NBCSN opened, talking about Menzies first time participating.

They don't really run trophy trucks in the Dakar the equivalent class (they call it the car class but it is pickups, SUVs and buggies) in recent years has been dominated Mini's (not what you see on the road), VW Touaregs used to also do well when VW had a presence in the race and lately the vehicles have started to look more buggy-like moving forward this year where a lot of them look like this;

The picture is from Tim Coronel's Instagram feed, he is one of the drivers, he gave me a follow so I followed him back and the pictures he posts are awesome.

This gets us back to Menzies who driving a Mini (again, they look nothing like what you see on the street), so different from his trophy truck, took fourth place on Stage 1 but crashed out on day two. He tried something new and it didn't go well the first time. Ok, I am sure he learned a lot and I bet he will be back. I think there is a parallel to investing.

A long time ago, someone shared the adage with me that the worst thing you can do is make money on your first options trade. It's obviously not the worst thing literally but it makes a point that success on your first attempt at something (from here let's just focus on investing as I have no idea if this pertains to desert racing) can lead to complacency or being overconfident that it was more skill than luck.

An example playing out right now is Bitcoin and the other cryptocurrencies. I disclosed a few weeks ago a very short term trade on the Grayscale Bitcoin Trust (GBTC). My hope was to hold it for a while but it moved so quickly I sold, left a lot on the table to be sure but all the while remembering the adage about option trades.

With something that has gone straight up for a long time, obviously just about anyone in it has made money and while that is great it wouldn't be a stretch to think that some of the folks involved are mistaking a bull market (or hysterical mania) as they're truly understanding this brand new thing to speculate/invest in.

When someone becomes overconfident they start to invest a little more and maybe it keeps going up and they put in even more and if/when the party ends there will be regret and despair. There's no shame in being lucky and making a killing but if you turned some piece of money, even if you put in more than was prudent, into a life changing amount, take some off the table and let it change your life.

Jared Dillian from the Daily Dirtnap had a recent post at Marketwatch where he very astutely noted that when you hear that $10,000 put into Bitcoin in 2010 would now be a bazillion dollars now, it is a silly comment as just about anyone would have been likely to sell when it doubled if not sooner but if some how you turned $10,000 or $20,000 into a $1 million and you have mortgage you could pay off or your kids' college you could cover, or both, get that money off the Bitcoin table. I would tell you to take more off the table, not necessarily all, but in case that falls deaf at least let it actually change your life (repeated for emphasis).

Back to the Dakar, one of these years I've got to get down there to take pictures. The action is neat but the vehicles are like sculptures to me, just so interesting to look at and one of the great things about most racing series is that they are accessible in such a way that you can get close and take some (hopefully) good pictures.

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