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It finally happened.

My friend John sold his dogecoin position.

His three-year rollercoaster ride ended not with a bang, but with a reflective text message...

"Maybe I should've sold instead of taking a screenshot."

John isn't your typical investor. He's not one to pour over market data or strategize every move with a financial advisor. But when he saw a few anonymous traders hyping up dogecoin on Reddit in early 2021, he couldn't resist jumping in on the potential moonshot.

John bought a few thousand dollars of dogecoin while it was still trading for less than a penny and watched it skyrocket. Then he bought more at around $0.13. At one point, his little gamble had turned into a small six-figure fortune. I begged him to sell when it hit $0.70 per coin.

But John didn't sell. He wanted to wait for the long-term capital gains rate... and didn't I know that dogecoin was going "to the moon?" Then, as these things often do, dogecoin plummeted. When he finally sold, it had bottomed out around $0.10.

Still, John was lucky. He bought in so early that he still walked away with a small gain. But that huge six-figure sum he once had in his sights? Gone.

Unfortunately, John's story is far from unique. I've lost count of how many people I've met who've claimed they struck it rich in the digital gold rush. They'd tell me, with a mix of pride and excitement, how much money they'd made in crypto. But when I asked where they sold, they'd sheepishly admit they hadn't. "My position's actually down right now," was a frequent follow up.

It's a classic tale — on paper, they were rich. In reality? Not so much.

And it wasn't just crypto. We all saw it happen with meme stocks, too. GameStop, AMC — names that became legend almost overnight. Investors held on, convinced they were part of a revolution. But when the hype died down, many were left with little more than stories of what could have been.

So, how can you avoid this kind of hubris? How do you make sure you're a pig getting fat, and not a hog waiting to be slaughtered?

The Importance of Having a Plan

Let's get one thing straight: When you make an investment, it's not just about the numbers on the screen. It's about having a plan. A real, concrete, "this is what I'm doing and why" kind of plan.

Because without a plan, you're flying blind. And in the chaotic, often unpredictable world of investing, that's a recipe for disaster.

John's dogecoin trade is a perfect example. He got in early, which was smart. But after that? His plan, if you could even call it that, was nonexistent. Sure, he was riding high, watching his initial $10,000 turn into a small fortune. But he didn't have a clear strategy for what came next.

Was he holding out for a specific price? A certain date? A sign from the crypto gods?

Nope.

He was just holding. And hoping. And maybe, deep down, convincing himself that the ride would never end.

But it always does. Eventually, every investment reaches its peak, and if you don't have a plan for what to do when it gets there, you're at the mercy of the market.

And the market? It doesn't care about your dreams of riches. It doesn't care about how much time you've spent researching, or how many sleepless nights you've had watching the charts. The market moves on its own terms.

This is why a plan is so crucial. A plan keeps you grounded. It gives you a roadmap, a way to navigate the ups and downs without getting swept up in the emotions of the moment.

So, what does a good investment plan look like?

It starts with setting clear goals. What are you trying to achieve with this investment? Are you looking for short-term gains, or are you in it for the long haul? Are you trying to fund a specific goal, like buying a house or retiring early?

Once you've got your goals in place, it's time to set some rules. Rules about when you'll buy, and just as importantly, when you'll sell. These rules should be based on data, on careful analysis — not on gut feelings or the latest market hype.

For example, you might decide that you'll sell if your investment reaches a certain price. Or maybe you'll sell if the company's fundamentals change or start to weaken. Or if a specific technical indicator gives you the signal.

Whatever your rules are, they need to be clear, and you need to stick to them.

Yes, this means you'll sometimes sell "too early." You'll watch the price climb even higher after you've cashed out, and it'll sting. But remember: Profits aren't real until they're in your account. And taking a profit, even a smaller one, is always better than watching your gains evaporate because you were too greedy to pull the trigger.

John's mistake?

He had no plan. He had no exit strategy. He was just riding the wave, convinced it would keep going up "to the moon," until it didn't.

So, the next time you make an investment, ask yourself: What's my plan? What are my goals? And most importantly, what's my exit strategy?

Because if you don't have a plan, you're not investing. You're gambling.

Avoiding the Trap of Hubris

Hubris. It's a word that gets thrown around a lot, but in the world of investing, it's a silent killer. It sneaks up on you, often disguised as confidence or optimism, and before you know it, you're making decisions based on ego rather than logic.

It's the voice in your head that says, "I'm different. I'm smarter. I'll know when to get out."

But here's the truth: You're not different. No one is. The market has a way of humbling even the most experienced investors. Even Warren Buffett — largely agreed to be one of the best investors alive — has a losing position from time to time. If you invest long enough, it's bound to happen.

The problem is when you start thinking you're immune to the market and its whims.

So how do you keep hubris in check?

1. Stay Humble. No matter how much success you've had, always remember that the market doesn't owe you anything. Every gain is a gift, not a guarantee. Approach each investment with humility, and you'll be less likely to fall into the trap of overconfidence.

2. Stick to Your Plan.This goes back to having a solid plan in place. When you've set clear goals and rules for your investments, it's easier to avoid the temptation to let your ego take over. You're not making decisions based on emotion; you're following a strategy.

3. Learn from Your Mistakes.Everyone makes mistakes in investing. The key is to learn from them. If you've let hubris get the best of you in the past, take a hard look at what went wrong and why. Then use that knowledge to make better decisions in the future.

4. Surround Yourself with Trusted Advisors.Sometimes, the best way to keep your ego in check is to get a second opinion. Whether it's a financial advisor, a trusted friend, or a community of fellow investors, having someone else to bounce ideas off can provide valuable perspective and help you avoid costly mistakes.

A Final Thought on Hubris, Humility, and Taking Screenshots

Investing isn't just about picking the right stocks or timing the market perfectly. It's about understanding your own psychology, knowing when to hold on, and, perhaps more importantly, knowing when to let go.

John's story is a reminder of what can happen when you let hubris take the wheel. But it's also a lesson in the power of humility, of having a plan, and of staying grounded even when the market seems to be on your side.

So, the next time you're tempted to take a screenshot of your soaring portfolio, remember, it's not about the numbers on the screen. It's about the decisions you make when those numbers start to change.

Have a plan. Stay humble. And don't let hubris be the reason you end up with a screenshot instead of a profit.