Price is what you pay; value is what you get.

I love the quote above as it really does frame what I am after as an investor.  I'm sure I'm not alone in saying I absolutely hate overpaying for something.  Once the realization sets in, the pain tends to linger....  If you feel the same way, below are updates to previously introduced tools that I've used for many years on a variety of assets to help avoid dumb mistakes.  Why guess if you don't have to?

But first, a couple of thoughts on investment styles/philosophy.   Momentum and trend following both work well across a variety of asset types but focusing on them alone can get quite scary at times as reversals can be quite abrupt.   Empirically, history suggests that value compliments momentum particularly well, which can lead to a much more pleasant ride when combined.  When thinking about diversification, most people think only about asset diversification.  Yet, history suggest that diversifying by risk premia may actually be more effective, leading me to introduce value-oriented tools.

There are many ways to look at value but as mentioned above, in prior posts i introduced a quantitative tool that I call StratVal.   This is an oscillator type of analysis that compares an asset's risk adjusted performance relative to its own history.   I adjust for risk so that i can compare apples to apples when looking across asset types.   Below I am pasting an updated view of StratVal applied to both BTC and ETH.  Compared to previous posts, I've converted them to daily data and am now looking at the same time period. 

In the second chart below, I'm updating the daily drawdown comparison of both BTC and ETH.   Over the relevant time period, you can see that ETH has always had a harder sell-off than BTC, except for this most recent drawdown.   If that trend is to continue, it looks like there may be more downside to ETH relative to BTC, or, that BTC may outperform on the bounce.

This is not investment advice so please do your own research.   All raw data can be downloaded free of charge at https://www.cryptodatadownload.com/data/bitfinex/

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