I was recently reading about the Railway Mania of the mid-1800s in Great Britain and was struck by the similarities between that time period and the expansion of cryptocurrencies, and more broadly blockchain technology, over the past 5 years.

During that time, thousands of tracks were laid as entrepreneurs tried to take advantage of an entirely new technology that promised to change the world. And while it did in fact change the world – there were big winners and big losers along the way…

Nearly a decade before the tech bubble popped in the early 2000s, technology companies started to explode onto the scene.

If you had invested $10,000 in the Nasdaq in 1991, you would have had $20,000 just 3 years later.  

It was around 1994, that famous wall street investors began calling tech stocks a bubble. As we now know, this was very premature. The bull market would rage on for 6 more years and your $10,000 investment would have eventually turned into over $120,000 by 2000.

“A genius is the man who can do the average thing when everyone else around him is losing his mind.”—Napoleon

Investing sounds easy in theory.

(1) design a portfolio based on goals and risk tolerance

(2) set guidelines for when and how changes should be made

(3) then get out of its way  

As anyone who has been investing for some time will tell you, it is anything but easy.

Let’s pretend we have two retirees, Jim and Marty McFly. They both look the same financially. They are retiring in the year 2000 with $1,000,000, all invested in the S&P 500, and plan to begin withdrawing $40,000/year. The only difference is that Marty McFly has the ability to travel to 2020 and go do retirement in reverse…

It sounds great in theory.

Step 1 - Find the next Amazon while it’s still a small and unknown company.

Step 2 - Hold it forever.

Step 3 - Make a bazillion dollars and retire on my own private island.

Let's go ahead and say I did the impossible and got Step 1 right. I say impossible because even Jeff Bezos wasn't sure it would become what it did.